Eco rating
An eco-rating is created by rating agencies that examine and evaluate companies according to ecological criteria. Just like the traditional rating , the term eco-rating can refer to both the evaluation result and the evaluation process.
There is no credit check of the companies with regard to their current and future liquidity, as is the case with normal ratings, but a rating of the ecological creditworthiness . It reflects information about the overall sustainable responsibility of the company. The eco-rating assesses the ecological impact of products or services over their entire life cycle. All areas of the operational value chain, such as procurement, production, sales, logistics, controlling, personnel, organization and financing, are affected.
The aim of eco- rating is to express the ecological performance of companies through a highly aggregated rating. An eco rating is used to support investors and consumers in making decisions.
meaning
According to Frank Figge, the previously free good environment has become a scarce good due to the increasing pollution of the natural environment . Investors are increasingly convinced that only those companies that operate sustainably and ethically in the market will survive there for a long time and will exceed the market return. In recent years, studies have shown that ethical investments achieve a higher return than normal investments .
An eco-rating represents an increase in the general ecological transparency of companies for the interest groups. If stakeholders intend to make a contribution to ecological structural change, they need an independent, externally comparative assessment of the ecological performance of companies. Clients are mostly investors because they are interested in the company's long-term existence. That means they also bear the cost of the rating. It has been shown that sustainability is a concept for increasing the value of companies and has a positive effect on company value. More and more companies are taking their own guesswork in order to be able to show investors another selling point. In the long term, investors and companies as well as society and the environment benefit from sustainable investments.
Evaluation criteria
Ideally, an eco-rating is based on the individual information needs of the users of the rating. Which information is evaluated (aggregated) depends on the individual information needs. In practice, it is generally assumed that different rating users will need homogeneous information.
Positive criteria
If a company meets several positive criteria, it lands on a higher rank than a company with fewer positive criteria. The sustainability rating agency INrate sees ecological positive criteria in a low environmental impact in the life cycle, the inclusion of ecological criteria in investment decisions, an environmental management that pursues ecological product development and process optimization and works eco-efficiently. It does this by lowering energy consumption, recycling and reducing emissions into the air, soil and water.
Negative criteria or exclusion criteria
If companies meet certain exclusion criteria, these companies are rated negatively from the outset and are not recommended for sustainable investments. Exclusion criteria can arise due to controversial business areas or controversial business practices. According to the environmental rating agency oekom research AG (since March 2018 ISS oekom), the following business areas can be an exclusion criterion: abortion, alcohol, atomic energy, biocides, organochlorine mass products, embryo research, gambling, green genetic engineering, furs, pornography, armaments and tobacco. Oekom research sees controversial business practices in terms of labor law violations, child labor, controversial environmental behavior, controversial economic practices, human rights violations and animal experiments.
Frankfurt-Hohenheim Guide
To date, there is still no generally recognized catalog of criteria for the ethical evaluation of companies. The Frankfurt-Hohenheim Guide , which was created in 1997 in collaboration with economists, philosophers, ethicists and theologians, offers an approach to this . This guideline describes around 850 individual criteria on the basis of which business enterprises should be viewed critically. To develop the criteria, the group of authors used the so-called value tree analysis (according to Ortwin Renn); Values are defined as "concepts of what is desirable". The allegorical value tree has three main branches:
- Cultural compatibility
- is seen as a harmony between economic activity and the cultural development of society. Without removing the idea of competition, consideration and fairness should still apply.
- Social acceptability
- describes the working conditions, social standards and human rights. In order to avoid social dumping and human rights violations, global framework conditions are essential.
- Nature compatibility
- corresponds to the main criteria specifically for eco-ratings; it is subdivided into the areas of action: environmental institutions, information, technology, living beings, energy, substances, transport and emissions.
In the practice of research and rating agencies, a pragmatic selection of around 100 of the 850 individual criteria of the guide is made, on the basis of which companies are assessed ethically and ecologically.
Rating process
The client, an investor or their own company instructs the rating agency to create an eco-ranking for an investment. The rating process is usually multi-level. First, all publications of a company are analyzed. Further information is then obtained through questionnaires and third-party sources. If the company meets negative criteria, the process is terminated. In order to get the most accurate information possible, a constant dialogue between the environmental rating agency and the company is important. If the information is complete and understandable, the company is assigned rating grades. Oekom research AG rates companies from A + to D-, with A + being the highest rating level for an ecologically-oriented company.
Environmental investments
There are more and more opportunities to invest in sustainable products. In the past few years, several environmental indices have been created that are becoming increasingly important. An example that has existed since 1999 is the Dow Jones Sustainability Group Index (DJSI), which only includes companies that have been ranked according to ecological criteria.
Since many retail companies use the topic of "sustainability" in their advertising in order to get consumers in the mood, the rating agency oeko-research examined the environmental commitment in the retail sector in 2011. 130 of the world's largest companies in the industry were examined. However, 105 companies showed "so little commitment or transparency that they could not qualify for a detailed analysis." () In 25 companies, "comparatively" extensive measures were identified and eleven are classified as pioneers. On the A + to D- scale, the Swiss Coop was rated B + and Migros B-, followed by Marks & Spencer with B-. The German company Metro made it into the premium segment with C +.
Limits and weaknesses
Eco-ratings are based on the past and can only give limited information about future developments. Furthermore, the information from the companies is difficult to compare. Despite reporting standards, a lot of information is still collected in different ways, which can lead to distortions. Rating agencies often have a different understanding of how sustainability or sustainable business is rated. Depending on whether sustainability is a value in itself (= ethical-ecological understanding of sustainability) or whether the sustainability assessment is intended to underpin a forecast of the financial performance of rating objects (= economic sustainability approach), they arrive at different results.
Other forms of eco-rating
Eco-ratings are not only created for companies. Countries, industries, parties and even people can be rated under ecological principles. Ecological country ratings are collected, for example, by oekom research AG. Nuclear weapon possession, child labor, corruption, the death penalty and the use of nuclear energy are exclusion criteria. The positive ecological factors include high biodiversity , low air emissions and international agreements. A personal evaluation took place in the course of the federal elections in 2007 in Switzerland. There the candidates were evaluated by an environmental rating. It was carried out by the NGOs Greenpeace, Pro Natura, WWF, VCS and Energiestiftung SES and published on the Internet. The voting behavior of the members of parliament on environmental issues in the 47th legislative period was assessed.
literature
- F. Figge: Öko-Rating - Ecology-oriented evaluation of companies . Springer, 2000, ISBN 978-3-540-66867-1 .
- E. Günther: Ecology-oriented management. Environmental (world-oriented) thinking in business administration . Lucius & Lucius, 2008, ISBN 978-3-8282-0415-7 .
- R. Haßler, D. Reinhard: Environmental Rating: An Indicator of Corporate Environmental Performance . oekom research AG, Springer, 2000.
- F. Hellenthal: Environmental management according to the Öko-Audit-Ordinance Critical consideration and presentation of perspectives through the concept of ecological company evaluation . Tectum Verlag, Marburg 2001, ISBN 978-3-8288-8219-5 .
Individual evidence
- ↑ Figge, 2000, p. 7.
- ↑ Frankfurt-Hohenheim Guide.
- ↑ Sustainability management in companies, Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, p. 83.
- ↑ Günther, 2008, p. 165.
- ↑ Frankfurt-Hohenheim Guide ( Memento from February 12, 2011 in the Internet Archive )
- ↑ Hellenthal, 2001, p. 126.
- ↑ See Haßler, 2000, p. 20.
- ↑ Günther, 2008, p. 65
- ↑ a b Sustainability in Retail. In: Environment magazine . issue 7/8 2011, page 6.
- ↑ cf. Sustainability management in companies, Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, p. 85.
- ↑ "Rating of the Rating Agencies" in the Lexicon of Sustainability .