Review of Sustainability Reporting Status of RepRisk’s Most Controversial Companies

By Bahar Gidwani

For the past five years, RepRisk has produced a list of ten companies that were most exposed to environmental, social, and governance issues.  We thought it would be interesting to see how the companies on this year’s Most Controversial list perform in CSRHub’s sustainability metrics tracking system.

RepRisk is a business intelligence provider that specializes in environmental, social and governance (ESG) risk analytics and metrics. It uses a unique methodology that screens tens of thousands of public and third-party sources in 14 languages in order to identify, filter, analyze and quantify environmental, social and governance (ESG) risks for both listed and unlisted companies from all sectors and countries in the world.

Only three of the companies on this year’s Most Controversial list had ratings information in CSRHub’s system (from sources other than RepRisk).  This is a pretty remarkable result—CSRHub uses 371 sources to build its data set.  It lists 13,736 companies from 127 countries on its web site and has data on another 140,000 companies.  CSRHub recently conducted a study on the companies in 14 regional stock exchanges.  Of the 18,991 companies listed on these exchanges, CSRHub had data on 13,165 or 69%.

Only two of the companies in the RepRisk list had enough data to get full CSRHub ratings. The top-level overview below shows that Takata has poor scores relative both to our entire coverage universe and to their industry and geographic peers while General Motors scores well.

We can’t draw conclusions from a sample of two companies—or ten.  The high score for General Motors is a product of many years of investment in its community and employees and well-designed programs for environmental management and governance.  The reputational challenges it faced came despite these investments and some were related to the company’s recent financial problems.

But, it is clear there is little information on the social performance of eight of the ten companies on this list.  These eight companies are not reporting sustainability metrics to outside groups and do not seem to be engaged with or responding to their stakeholders.  We believe this simple study supports our belief that companies who are transparent about their social policies and performance are less likely to have risky patterns of behavior.

Bahar Gidwani  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. Bahar is a member of the SASB Advisory Board. He plays bridge, races sailboats, and is based in New York City.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 13,736+ companies from 135 industries in 127 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.