There are a number of ratings tools or indexes in the market which rate companies based on a variety of factors. As some have only emerged in recent years, there is little track record to analyse - you can’t compare results 10 years later to see if a company has lived up to its sustainability claims.

While some believe the ratings tools are an important part of a corporation’s accountability and a willingness to be compared to their peers, others downplay their importance as a ranking system that encourages a ‘tick-a-box’ approach to sustainability. 

Regardless of which view you take, these indexes have found a firm place amongst corporations keen to demonstrate their commitment to sustainability or social responsibility. However, those making decisions based on these ratings need to understand the subtle differences between them.

What is the AuSSI index?

According to SAM, who administer the AuSSI Index: “The Australian SAM Sustainability Index (AuSSI) tracks the performance of Australian companies that lead their industry in terms of corporate sustainability. Based on a thorough assessment of economic, environmental and social criteria, the AuSSI comprises the top sustainability-driven companies from each of 21 industry clusters covering the entire Australian economy.”

It’s important to note that the AuSSI index is based on sustainability, not ethical issues. So, while a fund such as Australian Ethical has a charter that avoids investments that unnecessarily “create, encourage or perpetuate militarism or engage in the manufacture of armaments”, AuSSI does not disallow including companies based in the fact they are involved in these activities.

AuSSI does not charge companies to be included in the index. It offers two funds which invests in companies based on the index. The AuSSI index was launched February 2005.

www.aussi.net.au

What is the RepuTex Index?

According to RepuTex: “The RepuTex Social Responsibility Index (SRI) measures the share market performance of a portfolio of public companies listed on the Australian Stock Exchange that demonstrate a required minimum level of socially responsible performance and management of social risk. The Index is calculated at the end of each trading day by Standard & Poor’s on both a share price and total return (accumulation) basis. 

“RepuTex Ratings measure the corporate social responsibility (CSR) performance and risk management of business organisations according to a standard rating scale which ranges from AAA (outstanding) to D (inadequate). The RepuTex social responsibility ratings used for the SRI Index are assigned according to RepuTex’s standard rating criteria based on a company’s performance and risk across four criteria categories –social impact, environmental impact, corporate governance and workplace practices.”

The RepuTex SRI Index was launched in August 2005.

www.reputex.com.au

What is the Corporate Responsibility Index?

The Corporate Responsibility Index (CRI) is an initiative of the St James Ethics Centre,The Sydney Morning Herald and The Age. It is based on an index used under licence fromBusiness in the Community in the United Kingdom.

According to the St James Ethics Centre: “The CRI is a strategic management tool to enhance the capacity of businesses to develop, measure and communicate best practice in the field of corporate social responsibility. It does this through benchmarking corporate social responsibility strategy and implementation process across the four key impact areas of community, workplace, marketplace and environment. 

“Australia’s top 250 companies and Business Council of Australia members are invited to participate in the Corporate Responsibility Index by completing an online survey.  Participation is free of charge.

“The Corporate Responsibility Index is a self-assessment process. While not being involved directly in the task of rating companies, St James Ethics Centre will act as the ‘trustee’ overseeing the integrity of the process.”

The companies’ self-assessment process is validated through pro bono work from Ernst & Young. The CRI was launched in February 2004.

www.corporate-responsibility.com.au