Beyond ESG Ratings

ESG ratings answer a narrower question than most people assume. They score what a company discloses: its policies, its filings, its stated commitments, checked against a framework and compared to peers. That is a real and useful measurement. It is not, and was never designed to be, a measurement of what the public believes about a company, or whether that belief is moving people to buy, switch, or walk away.

That gap matters more than it used to. Sustainability-driven consumer switching is projected to grow from $0.4-0.8 trillion in 2025 to $2.5-3.4 trillion by 2035, a sixfold increase in a decade (see The $3 Trillion Switch). A company can hold a strong ESG disclosure score and still lose share if the public does not believe or reward what it discloses. The reverse is also true: a company with modest formal disclosure can hold strong public trust if what it actually does lines up with what people expect. ESG scoring, built from filings and frameworks, cannot see either case. It was not built to.

What fills the gap is direct measurement of Social License to Operate (SLO): the ongoing, informal consent a company holds from the customers, employees, and public it depends on. Unlike a disclosure score, SLO is not self-reported. It is measured by asking people directly, tracked over time, and calibrated against what they actually do with their money, not just what they say they believe.

At GMS, that measurement is the Social Responsibility Score (SRS): a longitudinal, survey-based score built from real consumer responses, not filings or audits, tracked monthly with current benchmark data across the UK, USA, and Australia and methodology deployable across 64 markets. A separate annual, sector-level diagnostic layer, 13 named drivers spanning environmental, social, and governance themes, supplements SRS to show exactly where a brand’s performance and importance sit on each dimension. A four-point improvement in SRS aligns with approximately a one percent increase in annual revenue, the kind of direct commercial linkage a disclosure score cannot offer because it is not measuring the same thing.

None of this makes ESG ratings wrong. It makes them incomplete for a specific, increasingly consequential question: not “what does this company say about itself,” but “does the public believe it, and is that belief moving their spend.” Companies that treat strong ESG disclosure as evidence of strong public trust are measuring the wrong thing for that question, and often find out the gap exists only after switching behaviour has already moved.

The alternative is not a better disclosure framework. It is measuring the actual signal: direct, repeated consumer data, calibrated against real switching and revenue outcomes, read as thematic investment demand for evidence of Social License to Operate rather than as an ESG score with a different name.