Sustainability rating and moral fictionalism: opening the black box of nonfinancial agencies

Olivier Boiral, David Talbot, Marie-Christine Brotherton and Iñaki Heras-Saizarbitoria

Accounting, Auditing & Accountability Journal, 2021, vol. 34, issue 8, 1740-1768

Abstract: Purpose - The purpose of this paper is to explore the practices, challenges and ethical issues underlying the fabric and dissemination of corporate sustainability ratings. Design/methodology/approach - Based on 36 semi-structured interviews with sustainability rating practitioners, the study shows the trade-offs, ethical judgments and customizable aspects involved in rating practices, which cannot rely only on formal and predefined methods. Findings - In contrast with the official optimistic rhetoric about the rationality and rigor of sustainability rating methods, agencies face serious challenges in the measurement and comparison of performance in this area, particularly in terms of the aggregation of scattered and fuzzy indicators, commercial pressures and the availability, materiality and reliability of the information collected. Despite these concerns, sustainability ratings do appear to be useful in improving corporate responsiveness and increasing investor awareness of the complex and difficult-to-measure aspects of nonfinancial reports. Practical implications - Rating agencies should collaborate to set up common indicators that would be easier for firms to produce and should better separate their sustainability rating production activities from other services they offer to companies (e.g. consultancy). Originality/value - This study contributes to the literature on the measurement and promotion of corporate sustainability by analyzing rating practices through the lens of moral fictionalism, which here refers to the human tendency to build ethical judgments on fictional but convenient and useful representations.

Keywords: Corporate sustainability; Sustainability ratings; ESG; Ethical issues (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:aaajpp:aaaj-12-2019-4356

DOI: 10.1108/AAAJ-12-2019-4356

Access Statistics for this article

Accounting, Auditing & Accountability Journal is currently edited by Prof James Guthrie and Prof Lee Parker

More articles in Accounting, Auditing & Accountability Journal from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().