Measuring sustainability risks: A rational myth?

Olivier Boiral, David Talbot and Marie‐Christine Brotherton

Business Strategy and the Environment, 2020, vol. 29, issue 6, 2557-2571

Abstract: The objective of this paper is to investigate the rigorousness and reliability of sustainability rating agencies' evaluation of corporate sustainability risks. Using grounded theory, this study conducts a qualitative analysis of 32 semi‐structured interviews with practitioners involved in this activity and shows the trade‐offs and rational myths underlying this evaluation process. The image of rationality and rigorousness projected by sustainability risk measurements is mostly intended to address the increasing institutional pressures for reliable and comparable information, particularly from institutional investors and socially responsible investment decision makers. Nevertheless, risk analysts face serious challenges due to the lack of reliable information, the unpredictability of sustainability risks, the methodological issues related to the measurement process, and the complexity and context‐dependency of risk assessment. These challenges call into question the official and optimistic rhetoric of rating agencies. This study contributes to the literature on sustainability risks and rational myths in organizations. Managerial implications and avenues for future research are also discussed.

Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://doi.org/10.1002/bse.2520

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:bla:bstrat:v:29:y:2020:i:6:p:2557-2571

Ordering information: This journal article can be ordered from
http://onlinelibrary ... 1002/(ISSN)1099-0836

Access Statistics for this article

Business Strategy and the Environment is currently edited by Richard Welford

More articles in Business Strategy and the Environment from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().