CSRHub Blog

Can Business Trump Trump’s Anti-Climate Stance

[fa icon="calendar'] Nov 15, 2016 8:00:00 AM / by Carol Pierson Holding

Donald Trump’s election has sent the global climate community into a tailspin.

Windmill

It seems every climate change action supporter is making lists of the awful things he’s planning to do, so I’ll turn to the very succinct one I received in a Sunday morning email from Michael Brune, Executive Director of the Sierra Club:

End of Paris Climate deal. End of the EPA. End of the Clean Power Plan. More drilling. More coal. More pipelines. More lives destroyed. More wildlife bulldozed.

I’d add to Brune’s list of deplorable actions Trump’s choice to lead the EPA transition,  Myron Ebell, who Scientific American calls our “top climate skeptic.”

But we can’t forget what Neal Leary at Dickinson College’s Center for Sustainability Education reminds us in the Huffington Post the scariest fact of all: “Mr. Trump has asserted that climate change is a hoax.”

Leary refuses to give up: “I put my hope and efforts in action at state, local and institutional levels to keep and build momentum toward a clean, low-carbon U.S. energy system.”

Top on my list of Professor Leary’s institutional efforts would be American businesses, especially those that have turned away from fossil fuels and towards renewable energy for the most American of reasons — profit.

With the help of non-profit organizations such as the Carbon Disclosure Project, the Environmental Defense Fund, The Climate Group and the Center for Climate and Energy Solutions which set standards and rate companies’ environmental performance, our businesses are killing demand for coal by making energy efficiency a top priority and solar and wind the energy systems of choice. As eco-consultant Andrew Winston writes, “It’s flat out more profitable” to use renewables.

Another reason: renewable energy reduces a company’s risk.

How can renewable energy mitigate risk? The direct answer is that by installing their own solar power — either by building solar plants, as Google and other firms are doing, or via rooftop solar to supplement the energy they draw from the grid — these companies ensure access to power without the risk of price fluctuations endemic to fossil fuels.

But there are other reasons why renewable energy lowers risk. For one, investors are becoming increasingly concerned with business’ environmental practices as Corporate Social Responsibility (CSR) becomes common practice. Charles Schwab features Socially Responsible Investing (SRI) on its Mutual Funds web page, commenting that it is “emerging as a significant trend in the financial markets” and noting that SRI increased 28% between 2012 and 2014, when total SRI assets topped $4.3 trillion. More investors reduces a company’s cost of borrowing in tough times, when raising money can otherwise be expensive.

But the even greater risk of not participating in environmentally sound policies is the potential damage to the brand. CSRHub, the sponsor of this blog and the world’s largest CSR database, analyzed its CSR ratings against data on brand strength and finds significant correlation.

 

Sustainability increases Brand Strength

Download presentation slides:
How the Correlation between Sustainability and Brand Strength has Changed in the Last Few Years, More Proof that Sustainability Drives Operating Performance

In other words, what a company does for its community, including environmentally, affects the value of its brand. And that means customers are more loyal. And that translates into how much a company can charge for its products and its profitability.

Not everyone is a fan of CSR. But despite some bad actors using CSR to “green-wash” their reputations, the concept is embedded in American business and may provide a bulwark against climate deniers now coming to power. And who knows. If Trump does what he’s said he wants to do, eliminating the Affordable Care Act and drastically reducing social services, he might find himself in need of a boost to his reputation. And what could be more effective than saving the planet.

 

Photo courtesy of  SCA Svenska Cellulosa Aktiebolaget

 


Carol2Carol Pierson Holding is President and Founder, Holding Associates. Carol serves as Guest Blogger for CSRHub. Her firm has focused on the intersection of brand and social responsibility, working with Cisco Systems, Wilmington Trust, Bankrate.com, the US EPA, Yale University’s School of Environmental Sciences, and various non-profits. Before founding Holding Associates, Carol worked in executive management positions at Siegel & Gale, McCann Erickson, and Citibank. She is a Board Member of AMREF (African Medical and Research Foundation). Carol received her AB from Smith College and her MBA from Harvard University.

CSRHub provides access to corporate social responsibility and sustainability ratings and rankings information on 16,495+ companies from 135 industries in 133 countries. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

Read More [fa icon="long-arrow-right"]

[fa icon="comment"] 0 Comments posted in Sierra Club, Charles Scwab SRI Mutual Funds, Neal Leary, risk mitigation, Brand, Carol Pierson Holding, Trump

CSRHub's Bahar Gidwani elected member of Global Reporting Initiative Stakeholder Council

[fa icon="calendar'] Nov 9, 2016 8:00:00 AM / by CSRHub Blogging

CSRHub is pleased to announce that our CEO and Cofounder, Bahar Gidwani, has beenGlobal Reporting Initiative's Stakeholder Council elected as a member of the Global Reporting Initiative’s Stakeholder Council. His three- year term will start at the beginning of 2017.

The Stakeholder Council takes a crucial role within GRI’s governance structure, alongside the GRI Board of Directors. The Stakeholder Council is GRI’s formal multi-stakeholder advisory body, which debates and deliberates key strategic and policy issues with a view towards providing advice to the GRI Board of Directors. The Stakeholder Council comprises a balance of stakeholder and geographic constituencies.

 


 

Bahar GidwaniBahar Gidwani is CEO and Co-founder of CSRHub.  He has built and run large technology-based businesses for many years. Bahar holds a CFA, worked on Wall Street with Kidder, Peabody, and with McKinsey & Co. Bahar has consulted to a number of major companies and currently serves on the board of several software and Web companies. He has an MBA from Harvard Business School and an undergraduate degree in physics and astronomy. He plays bridge, races sailboats, and is based in New York City.

CSRHub provides access to the world’s largest corporate social responsibility and sustainability ratings and information.  It covers over 16,500 companies from 135 industries in 133 countries. By aggregating and normalizing the information from 491 data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices, and seek ways to improve corporate sustainability performance.

Read More [fa icon="long-arrow-right"]

[fa icon="comment"] 0 Comments posted in Bahar Gidwani, CSRHub, GRI, Global Reporting Initiative's Stakeholder Council

HBR’s Top Performing CEOs List - Financial Results and Sustainability—A Complex Relationship

[fa icon="calendar'] Oct 26, 2016 8:00:00 AM / by Bahar Gidwani

 

The Harvard Business Review (HBR) recently published its 2016 list of the world’s top 100 CEOs.  As in the past, HBR’s staff looked at the financial and ESG (environment, social, governance) performance of the CEOs of 1,200 large companies.  They used a measure of financial performance developed by a team of Harvard academics for 80% of their score.  The remaining 20% came from averaging two overall measures of corporate sustainability performance, including CSRHub.

HBR has been publishing this list since 2010 and CEOs apparently intently study their “rank” and any year-to-year changes.  The list originally included only measures of financial return.  In 2015, HBR started including ESG performance, such as those CSRHub gathers and reports.

Is there a connection between a CEO’s financial performance measure and the corporate social responsibility (CSR) or ESG performance of the CEO’s company?  Those of us who care about sustainability would expect (hope?) the answer is “Yes.”  Unfortunately, details we uncovered during this year’s rating process say that the answer is probably “Maybe” or “It depends.”

 

Are the Top 100 Different From The Rest?

CSRHub rates the perceived ESG performance of 16,550 companies in 133 countries.  We have full ratings on 1,180 of the 1,200 companies that HBR studied.  The table below compares the average performance for the top companies against the rest of the list, for community, employee, environment, and governance issues.  (HBR included 104 companies in its Top 100 list, due to a number of ties.)

 

Comparison of the CSRHub Corporate Social Responsibility Rankings for HBR Top 100 Companies and Those Not Chosen

Comparison of the CSRHub Corporate Social Responsibility Rankings for HBR Top 100 Companies and Those Not Chosen

 

As you can see, the top companies had only slightly better perceived sustainability performance than the rest of the companies.  When we adjust for the different number of companies in each of the two groups, there is a significant (P<0.02) difference only in the Community area.

This suggests that the best CEOs out of this sample of companies pay a bit more attention to issues associated with the sustainability of their Products, have good Philanthropy programs, and care about Human Rights and their Supply Chains.  But, they don’t seem to pay significantly more attention than other CEOs to issues relating to Employees, the Environment, or to their corporate Governance.  And, they still rank in their community efforts below the average of the other 15,000+ companies we track.

 

Are the Top 50 Financial Performers Better Than the Next 50?

What about the “best of the best?”  If we divide the HBR Top 100 into two groups by their HBR financial performance scores, would the top financial performers have better or worse social performance than the bottom group?

The table below shows the answer to this question.  It is probably an answer that many sustainability professionals will not want to hear.  The top financial performers had much worse perceived sustainability performance than those with somewhat worse financial performance.

Comparison of the CSRHub Corporate Social Responsibility Rankings for Top 50 Companies and the next 54 Companies as Ranked By Their HBR Financial Performance Score

 

Comparison of the CSRHub Corporate Social Responsibility Rankings for Top 50 Companies and the next 54 Companies as Ranked By Their HBR Financial Performance Score

 

These results are good evidence that some CEOs may emphasize good shareholder returns (high profit margins, high turnover of assets, strong stock performance, etc.) rather than good social performance (good community relations, happy employees, a clean environment, etc.).  Of course, the HBR study focuses only on very large, publicly-traded companies and there are only 104 companies where we have full data.  But, there is virtually no probability—P < 0.000001—that the top 50 do not trail the next 54 on both overall ratings and on all four categories of social responsibility.

 

Does It Make Sense to Combine Financial With Social?

The table above illustrates why HBR decided to integrate social issues into their ranking.  Using a single financial scale wasn’t teasing out the best CEO performance.  Using only social measures wasn’t doing it either.  Instead, HBR integrated the two measures in a balanced way that resulted in the surprising result shown below.

Comparison of the CSRHub Corporate Social Responsibility Rankings for Top 10 Companies and the next 94 Companies, as Ranked by their Overall HBR Score

 

Comparison of the CSRHub Corporate Social Responsibility Rankings for Top 10 Companies and the next 94 Companies, as Ranked by their Overall HBR Score

 

The financial scores within the Top 100 are pretty similar.  By using a social performance signal to differentiate among these financially similar performers and create an Overall HBR Score, HBR was able to pick a top group that had both good financial returns and strong sustainability performance.  This shows it is possible to both “do well” and “do good.”  Thanks to HBR, CEOs who manage this difficult balance have a shot at getting the recognition they deserve.

 


Bahar GidwaniBahar Gidwani is CEO and Co-founder of CSRHub.  He has built and run large technology-based businesses for many years. Bahar holds a CFA, worked on Wall Street with Kidder, Peabody, and with McKinsey & Co. Bahar has consulted to a number of major companies and currently serves on the board of several software and Web companies. He has an MBA from Harvard Business School and an undergraduate degree in physics and astronomy. He plays bridge, races sailboats, and is based in New York City.

 

CSRHub provides access to the world’s largest corporate social responsibility and sustainability ratings and information.  It covers over 16,000 companies from 135 industries in 132 countries. By aggregating and normalizing the information from 461 data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices, and seek ways to improve corporate sustainability performance.

 

Read More [fa icon="long-arrow-right"]

[fa icon="comment"] 0 Comments posted in Bahar Gidwani, Corporate Social Resonsibility, governance, Harvard Business Review, human rights, social, sustainability, ESG ratings, HBR financial performance scores, philanthropy, products, supply chains, CSRHub, employees, environment, HBR, esg performance, top 50 financial performers

CSRHub’s Cynthia Figge to Speak at Sustainable Brand's 2016 New Metrics Conference

[fa icon="calendar'] Oct 25, 2016 8:00:00 AM / by CSRHub Blogging

CSRHub Co-Founder and COO, Cynthia Figge, will be speaking at Sustainable BrandsSustainable Brands New Metrics '16 New Metrics conference, in Boston, Massachusetts, on November 14-16. Cynthia will discuss The Second Generation of ESG Metrics and the Movement to bring “Dark Data” to Light. New Metrics will showcase the macro, corporate and investor landscapes to help business succeed. During the three day conference, new approaches to valuing risk and impact, company goals and KPI’S and new solutions in data management will be among some of the topics discussed.

 

Monday, November 14th, 5:55pm

Rising Waves: The Second Generation of ESG Metrics and a Movement Toward Bringing ‘Dark Data’ to Light

  • Cynthia Figge, Co-Founder and COO; CSRHub

 

Virtually all members of the Sustainable Brands community are asking what changes they can expect in corporate disclosure of ESG metrics over the next few years, and how they can best prepare to transition toward a disclosure landscape that is less confusing, less scattered and more consistent over time. While the first generation of sustainability metrics has been driven mostly by custom self-reported data, combined with hundreds of surveys and ratings, a new wave of ESG disclosure trends is shaping up that promises to meet the needs of all stakeholders. This talk will outline the most important features of the next generation of ESG metrics and explain how ‘dark data’ may play a role in it.

 

Sustainable Brands:

Sustainable Brands is home for the global community of business innovators who are shaping the future of commerce worldwide. Since 2006, their goal has been to inspire, engage and equip today's business and brand leaders to prosper for the near and long term by leading the way to a sustainably abundant future. They do so by offering news and views from thought and practice leaders, live and on-line eventspeer-to-peer learning groups, a robust resource library, a solutions provider directory and more -- all designed to help brand, sustainability and design innovation professionals, social entrepreneurs and the eco-system of value network partners who support them, discover, co-create and successfully execute on new opportunities to profitably innovate for sustainability.

 


 

Cynthia Figge, Co-founder and COO of CSRHub

Cynthia Figge is a forerunner and thought leader in the corporate sustainability movement who co-founded EKOS International in 1996, one of the first consultancies integrating sustainability and corporate strategy. Cynthia is COO and Cofounder of CSRHub. Cynthia has worked with major organizations including BNSF, Boeing, Coca-Cola, Dow Jones, and REI to help craft sustainability strategy integrated with business. She was an Officer of LIN Broadcasting/McCaw Cellular leading new services development, and started a new “Greenfield” mill with Weyerhaeuser. She serves as Advisor to media and technology companies, and served as President of the Board of Sustainable Seattle. Cynthia has an MBA from Harvard Business School. Cynthia is based in the Seattle area.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 16,550 companies from 135 industries in 133 countries. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

Read More [fa icon="long-arrow-right"]

[fa icon="comment"] 0 Comments posted in Cynthia Figge, Sustainable Brands, NewMetrics, CSRHub, ESG Metrics

HBR Publishes List of Best Performing CEOs in the World

[fa icon="calendar'] Oct 19, 2016 8:00:00 AM / by CSRHub Blogging

The Harvard Business Review released their ranking of the world’s 100 best performing Harvard Business ReviewCEOs, based on both financial and ESG (environment, social, governance) measures of the leaders’ entire time in office to highlight those executives that have established a lasting track record. CSRHub is proud to be one of the two research providers for this year’s list.

HBR wrote in its November 2016 article covering the ranking, “one persistent criticism of ESG data is that it can be subjective, and indeed, when you examine how various research organizations rank the same firm using ESG criteria, you’ll often find significant differences.  This year HBR used ratings from CSRHub, a firm that collects and aggregates ESG data to help companies better understand what they can do to improve. By incorporating two ESG components, we hope to increase our accuracy and reduce the odds that any company may unduly benefit from or be penalized by a single firm’s rating.” (For more details, see “How We Calculated the Rankings,” page 6.) “The revised approach, along with ups and downs in world stock markets, brought 33 new CEOs onto the list. At the same time, 30 CEOs have made the list for the third year in a row.”

See which leaders and companies made the top list here, https://hbr.org/2016/11/the-best-performing-ceos-in-the-world.

 

About CSRHub

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 16,550 companies from 135 industries in 133 countries. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 
Contact: Cynthia Figge, COO and Cofounder, Cynthia@csrhub.com

 

Csrhub logo

 

 

Read More [fa icon="long-arrow-right"]

[fa icon="comment"] 0 Comments posted in Best Performing CEOs, ESG, governance, Harvard Business Review, social, sustainability ratings, CSRHub, environment, CSR Rankings, HBR

Subscribe to Email Updates

Lists by Topic

see all

Posts by Topic

see all