Trucost Blog / 15 Mar 2011

Rate the Raters: Uncovering best practice

SustainAbility’s Rate the Raters report highlighted Trucost good practice in the areas of input verification, experience and capacity of research team, basis for rating and validation of results.

SustainAbility publishes an annual multi-phase research program ‘Rate the Raters’ to shed light on corporate sustainability ratings.

SustainAbility’s Rate the Raters: Uncovering Best Practices report, published in February 2011, highlighted Trucost good practice in the areas of:

Input verification

When Trucost receives ESG data on a specific company, it cross-references the data against its own expected (or modeled) data. If Trucost finds discrepancies between the reported data and expected data, it will enter into a dialogue with the company to resolve the issue.

Experience and capacity of research team

Trucost analysts have three to five years of experience working in or analyzing the industries they cover. Qualified accountants begin by segmenting each company’s sales according to the 464 business activities in Trucost’s model. This analysis drives the initial environmental profile which is used as the starting point for Trucost’s environmental economics experts.

Basis for rating

Trucost assigns economic costs to a company’s operational and supply chain environmental impacts based on the company’s specific business activities.

Validation of results

Trucost process includes an inherent check on company reported information in that Trucost calculates the average or expected impact for companies given their industries. Trucost also gives companies four weeks to review compiled data and provide feedback and additional information.

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