An analysis of the methodologies adopted by CSR rating agencies

Abstract

PurposeThis paper aims to analyse the similarities and differences in the methodologies adopted by corporate social responsibility (CSR) rating agencies.Design/methodology/approachThe authors gather secondary and primary evidences of practices from selected agencies on the methodologies and criteria they rely upon to assess a firm’s CSR performance.FindingsThe authors find not only evidence of similarities in the methodologies adopted by the CSR rating agencies (e.g. the use of environment, social and governance themes, exclusion criteria, adoption of positive criteria, client/“customised” input, quantification) but also several elements of differences, namely, in terms of the thresholds for exclusion, transparent vs confidential approach, industry-specific ratings and weights for each dimension. Drawing from Sandberg et al.’s (2009) conceptualisations, the authors tentatively argue that this mixed picture may reflect competing organisational pressures to adopt a differentiation approach at the strategic and practical levels whilst recognising, and incorporating, the “globalising” tendencies of the CSR business at the terminological levels.Social implicationsAlthough these data are based on a relatively small number of agencies, the findings and analysis convey some implications for users of CSR ratings and policymakers, particularly in light of the recent Paris 2016 Agreement on Climate Change and the increased emphasis on the monitoring of social, environmental and governance performance.Originality/valueThe authors contribute to the literature by highlighting how key intermediate rating organisations operationalise notions of CSR.