Deutsche calls for merged credit/ESG ratings as sustainability ratings project hits milestone

Global Initiative for Sustainability Ratings (GISR) releases inaugural Principles

Deutsche Bank has called for amalgamated credit and sustainability ratings as a project it is backing to harmonize environmental, social and governance (ESG) research reaches its first major milestone.

The Global Initiative for Sustainability Ratings (GISR) released its inaugural Principles – the first component of a three-part standard – at the end of last month.

The project, launched by Ceres and the Tellus Institute in 2011, has the backing not only of Deutsche but institutions such as Aviva, Bloomberg, BBVA, TIAACREF and UBS. Corporates including AMD, UPS, Disney, Bosch and Bayer sit on GISR’s technical working group.

“Our goal must be to ultimately achieve an amalgamation of credit and sustainability ratings in order to increase their transparency and informative value – in a manner analogous to the goal of integrated reporting,” said Deutsche’s Group Sustainability Officer Sabine Miltner in welcoming Version 1.0 of the principles.

The new principles, there are 12 of them, focus on process and content and will form a core that it’s hoped will be used for accrediting sustainability ratings worldwide.
They have been developed after three rounds of review with input from institutional investors, asset owners, sustainability (ESG) rating agencies, companies, NGOsand sustainability experts, said project coordinator Mark Tulay.

Tulay added that GISR is now in the early stages of developing the accreditation program. Once this process is established, GISR will invite ESG rating agencies to pursue accreditation. He said: “We are in active dialogue with numerous ESG ratings, research and index providers worldwide.”

“Building on two years of interactions with raters, GISR will soon announce a new platform and engagement opportunities for sustainability rating, research and index providers to engage substantively in both the standard development and accreditation processes,” Tulay told Responsible Investor.

He said an increase in interest and in participating organizations showed GISR’s progress during 2013 and potential in 2014. In the pipeline are announcements about new agreements with reporting standard setters.

Following on from the launch of the principles will be phase two (‘issues’) in the fourth quarter of this year. The third and final component will be ‘indicators’, due a year later. The project aims to harmonize what’s believed to be more than 100 separate ESG rating systems worldwide.

GISR has partnered with the World Bank’s IFC to present a webinar on January 23.