Sustainability reporting tools: Examining the merits of sustainability rankings

Sustainability reporting tools (SRTs) are becoming increasingly prevalent as corporate social responsibility performance continues to be a key factor for establishing a firm's value and intangible assets such as reputation, legitimacy, and credibility. This study explores one particular SRT, corporate sustainability ranking lists. The methodologies of three ranking lists were examined to understand the similarities, differences, limitations, potential efficacy, and consistency in the way data are collected and evaluated. Our findings illustrate strong variances in the ranking methodologies, and in turn, the results such as the inclusion of controversial industries. We also observed inconsistencies in the way sustainability is understood and applied, bringing into question the merits of ranking lists as a meaningful SRT. As one of the few empirical studies on sustainability rankings, our paper contributes to SRT scholarship and practice.

Automated summary

This study examined the methodologies of corporate sustainability ranking lists and found strong variances in the ranking methodologies, as well as inconsistencies in the understanding and application of sustainability, raising doubts about the value of ranking lists as meaningful sustainability reporting tools (SRTs).