Reliable Sustainability Ratings: The Influence of Business Models on Information Intermediaries
Chapter in Routledge Handbook on Responsible Investing (Forthcoming)
28 Pages Posted: 20 Aug 2012 Last revised: 22 Oct 2014
Date Written: August 19, 2012
A new generation of corporate reporting - integrated reporting - is emerging that will help investors and other key stakeholders such as employees, customers, suppliers, and NGOs develop a deeper and more comprehensive appreciation of corporate performance than what is currently provided by GAAP financial reporting. The purpose of this paper is to examine the optimal design of information intermediaries that can increase the impact of sustainability information on corporate conduct. Specifically, we focus on two issues: who pays for the information and which performance metrics should be included in assessing the sustainability performance of a company.
Keywords: sustainability, ratings, corporate performance, rating agencies, conflicts of interest, integrated reporting, corporate social responsibility
JEL Classification: A13, I31, J24, J28, M00, M1, M14, M41, D82, D83, D84
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