An Analysis of the Methodologies adopted by CSR Rating Agencies

Purpose: This paper analyses the similarities and differences in the methodologies adopted by CSR (corporate social responsibility) rating agencies. Design/methodology: We gather secondary and primary evidence of practices from selected agencies on the methodologies and criteria they rely upon to assess a firm's CSR performance. Findings: We find 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 emerge, 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, we 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. Implications: Although our data is based on a relatively small number of agencies, our findings and analysis convey some implications for users of CSR ratings and policy-makers; 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: We contribute to the literature by highlighting how key intermediate rating organisations operationalise notions of CSR.