04.18.2024 Bahar Gidwani
We recently added UK data to the Violations First data set on legal issues. We have now found another data set on US issues. Lequity Group collects, organizes, and analyzes data from the thousands of federal, state, and local courts and regulatory bodies across the country. This difficult task requires Lequity to interface with and ingest data from disparate, scattered, and inconsistent legal systems. It uses this information to provide informative ESG data about the types, amounts, allegations, and outcomes of lawsuits and regulatory actions filed against companies.
We were able connect 1,904 of the more than 2,000 names that Lequity tracks with our CSRHub rating set. Lequity is able to both provide a current “Scoreboard” of litigation issues and a historic perspective. We used data from June of 2022 and June of 2021 to see if this new legal system signal is present within CSRHub’s consensus ratings.
There is some correlation at the top level. As you can see below, entities that have a high Lequity rating (meaning they have a lot of litigation activity) have lower Overall CSRHub scores.
We found a correlation also in the changes in Lequity’s scores—companies that improved their legal issue performance also saw some improvement in their Overall CSRHub rating. By drilling down into the 12 CSRHub subcategories, we were able to find the most connection between Lequity’s score and CSRHub’s Compensation & Benefits, Diversity & Labor Rights, and Environment Policy & Reporting ratings.
As Lequity’s coverage and time history grows, we will look for more relationships. Of course, as more people learn of this firm’s work, it will have more influence on the consensus view of the entities it rates. This will also increase the connection between our scores.
Bahar Gidwani is CTO 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.
About CSRHub
CSRHub offers one of the world’s broadest and most consistent set of Environment, Social, and Governance (ESG) ratings, covering 50,000 companies. Its Big Data algorithm combines millions of data points on ESG performance from hundreds of sources, including leading ESG analyst raters, to produce consensus scores on all aspects of corporate social responsibility and sustainability. CSRHub ratings can be used to drive corporate, investor and consumer decisions. For more information, visit www.CSRHub.com. CSRHub is a B Corporation.
