A public comment period is now open to review a set of core principles for a global environmental, social and governance ratings standard developed by the Global Initiative for Sustainability Ratings.
The GISR, a coalition formed in 2011 by Ceres and Tellus Institute, has modeled its rating system on the Global Reporting Initiative, which has become the global standard used by thousands of companies worldwide for corporate reporting on environmental, social and economic performance. A number of companies including AMD, ConAgra Foods, Deloitte, Intel, McDonald’s, P&G, Siemens and UPS are partners in the GISR.
GISR will not rate companies. Instead, it will accredit other sustainability ratings, rankings or indices to apply its standard for measuring excellence in sustainability performance, the organization says.
The GISR standard will be made up of three components: principles, issues and indicators. The 12 principles, which are the core attributes of the ratings framework, have been developed into a beta version and are open for public review through July 31.
GISR will then assess and integrate comments into a version 1.0 of principles, which are scheduled for release in the third quarter of 2013. GISR will then design and release a beta version of the principles accreditation program for public comment by the fourth quarter of 2013. Beta versions and drafts of the other two components, issues and indicators, will follow in 2014 and 2015.
The two founding organizations aim for the GISR system to be embedded in the listing requirements of stock markets, disclosure requirements of securities regulation, contractual relationships between asset owners and managers, and government procurement programs worth hundreds of billions of dollars.
There are currently more than 100 ratings, ranking and indices evaluating the performance of more than 10,000 companies worldwide, GISR says. These companies are using more than 2,000 indicators of corporate sustainability performance, which cause confusion and make it difficult for investors to accurately assess a company’s ESG policies and milestones, GISR says.