Comparing CSR Rankings Methodologies

Over the course of the past three months, I have put together a number of charts illustrating the decided lack of consensus between major CSR rankings such as the Corporate Knights Global 100, CRO's Best Corporate Citizens, Ethisphere's Most Ethical Companies, Newsweek's Green Rankings, and RiskMetrics Group's Global ES&G 100.  A number of you have commented that it would be helpful to see an analysis of differences in how the various ratings groups go about assessing companies.  Read on for a snapshot of differences in the methodologies applied by five rankings we've been discussing.

Below is a chart comparing the amount of weight assigned by each of these five major CSR rankings to six broad CSR categories.  In reading it, you should note that I had to make a number of assumptions.  Most simply, CRO does not divulge its 2010 ratings methodology (nor did they respond to my email inquiry!) so I used the weights it provided with its 2009 ranking.  Corporate Knights, Ethisphere, and RiskMetrics Group posed a bigger challenge insofar that they are not transparent about weightings.  For each of these, I made an assumption that each issue listed by a ranking group was weighted equally, subsequently bucketing the issues into the six broad categories I applied in the chart below.

Some of my findings were as follows:

* Not surprisingly, Newsweek's 2009 Green Rankings consisted of 100% environmental criteria.

* Ethisphere's ranking consisted of a wide range of issues which I loosely classified under governance.

* Corporate Knights, CRO, and RiskMetrics Group offered the widest and most diverse range of issues, which spread across at least four of the six categories.

In addition to including a comparison of weights, I also am including a table illustrating which issues I classified under each of the six categories.  Here's hoping that my analysis approach is more transparent than the CSR ranking methodologies I am analyzing for you!