score. But the reality is far messier and more complex. We found that building and maintaining a benchmark involves a series of tradeoffs. We also found that the benchmark grows the authority of the benchmark producer and gives them greater influence. Here are our key insights. The SI transparency rating changed over time as it navigated competing objectives: Firstly, it prioritised credibility. From the start, SI was transparent about its methodology and based its indicators on key industry-specific and general standards like Salmon Aquaculture Dialogue and the Global Reporting Initiative (GRI). Then, the method needed to be doable: over time, SI reduced the number of indicators to what could be realistically assessed. Lastly, SI tried to be useful to its audience: SI included detailed breakdowns in its reports to help companies learn from the results. It also created more categories (for example, by region) so more companies could be recognised as being “top” performers. Extending past the benchmark’s inner workings, as the benchmark becomes established it gives the producer extra authority in the industry. SI was invited into policy discussions and industry working groups—spaces where its influence extended beyond the ranking itself. For example, the founder was invited to engage with the EU’s Fisheries department – a forum that would be much less accessible without the insights and the authority of the benchmark. Lastly, benchmarks do not just use existing standards and norms, but they help spread them. SI took international reporting standards, such as the GRI, and adapted them to the salmon industry, making them more relevant to the companies being rated. In this process, SI underscored which parts of the standards that companies should pay attention to and reinforced the influence of these standards. THE FUTURE MANAGER If you work for a large enough organisation, it is almost certainly rated or ranked by someone. It could be a sustainability rating, a supply chain transparency index, or an employee satisfaction ranking. Indeed, some rankings become so influential they act like de facto regulators. For example, credit ratings from agencies like Moody’s or S&P can affect a company’s ability to raise funds, and failing to meet certain sustainability benchmarks can shut companies out of supply chains. But, generally, understanding how rankings are put together can help you engage with them strategically. Indeed, a ranking might be very helpful to you, whether as a tool to measure sustainability performance, to compare with peer companies, or to persuade company decision-makers to make changes. Many of today’s benchmarks aim to drive social or environmental change by pressuring not only companies, but also investors, policymakers, and the public. Done well, these rankings can: • Spotlight best practice and encourage companies to improve. • Give consumers and investors clear, comparable information. • Make invisible issues – like water pollution or labour rights – visible and urgent. But there is a catch: if companies focus too much on boosting their scores, they might treat the ranking as the goal, rather than the underlying sustainability improvements. That is why it is essential to scrutinise how these rankings are made – because those design choices shape the kind of change they create. THE BOTTOM LINE Rankings and ratings might look like objective numbers, but they are built by people making choices and negotiating trade-offs. These “rankings entrepreneurs” influence not only how companies are evaluated, but how entire industries define success. For future business leaders, the more you understand the machinery behind these lists, the better you can navigate – and shape – the systems that increasingly govern corporate behaviour. FIFTY FOUR DEGREES | 25 Dr Dasha Smirnow is a Lecturer in Accounting in the Department of Accounting and Finance. Dr Smirnow has worked with Professor Jan Bebbington, Director of the Pentland Centre for Sustainability in Business, on research focused on sustainability benchmarking processes, their strictures, and their effects. d.smirnow@lancaster.ac.uk Listen to Dasha discussing her work on the Transforming Tomorrow podcast: https://pod.fo/e/272bf1 trAnsfoRming toMorrow
RkJQdWJsaXNoZXIy NTI5NzM=