CSRHub Blog Research on ESG metrics and comments on sustainability best practice

Insights Into FB Heron’s ESG Investment Process: A Case Study

[fa icon="calendar'] Sep 5, 2018 10:05:41 AM / by Bahar Gidwani

Our friends at FB Heron recently published a summary of how they arrived at their current ESG (Environment, Social and Governance) investment process.  It should be interesting for anyone who is trying to bring ESG factors into their own framework.Heron

Six years ago when Heron declared its intention to invest 100% of its assets for mission, they needed to find new ways to track and visualize the portfolio as it changed over time.

As is true for many foundations, FB Heron invests both directly and via outside managers.  The article starts with a four box screening system that sought to remove “bad” companies and portfolios and focus investment on “good” ones.  We then see that there is a broad distribution of good and bad performance—even after this type of screening. 

The largest segment of their endowment is invested in publicly traded companies, so it was extremely important to find a data partner that had social performance data on that universe. Heron works with a few data providers to do so, including CSRHuboekom, and others.

Heron uses CSRHub’s percentile rankings to help keep comparisons consistent and account for inherent differences across industries. The 0%-100% score can be applied to all of their corporate holdings. 

Heron uses the CSRHub scores of the commonly associated benchmarks (like the S&P 500). The weighted average helps them get a sense of how much of the fund was allocated to higher scoring companies, relative to the benchmark.

Heron has attempted to convert their scoring into a -5 to +5 scale. For now, the percentile scores are scaled so the average enterprise (50th percentile) receives a score of 0. They believe this scale is overly simplistic — however view it as a step in the right direction. Heron has achieved “relative” goodness—a distribution that is markedly superior to that of the market.  But, it continues to struggle with “outliers.”

Please see the FB Heron piece for their thought leadership in forming their evolving portfolio.


Bahar_Gidwani-9Bahar Gidwani has built and run large technology-based businesses for many years. Bahar holds a CFA (Chartered Financial Analyst) and was one of the first people to receive the FSA (Fundamentals of Sustainability Accounting) designation from SASB. Bahar worked on Wall Street with Kidder, Peabody, and with McKinsey & Co. He has founded several technology-based companies and is a co-founder of CSRHub, the world’s broadest source of corporate social responsibility information. 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 18,400+ companies from 135 industries in 133 countries. By aggregating and normalizing the information from 550 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, API partners 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 ESG Investment, FB Heron

A Fresh Resource for ESG-Oriented Financial Advisors

[fa icon="calendar'] Aug 30, 2018 10:10:38 AM / by Bahar Gidwani

One of the gurus of ESG investing has recently launched a new service for financial advisors (FAs) who want to integrate Environment, Social, and Governance (ESG) factors into their investment process.  He has created a site called “Sustainable Investing” and filled it with content about ESG investing.  Those who subscribe (there is a three month free trial option) get a quarterly newsletter and access to some otherwise hidden research reports.

The site’s author is Henry Shilling, who until recently led Moody’s sustainability 

Sustainable Investing

research efforts. I believe there are several reasons it has been difficult for FAs to bring ESG into their work. (Henry was also one of CSRHub’s beta testers and an early subscriber.)  During his time at Moody’s, Mr. Shilling performed several seminal studies that connected ESG factors with corporate long-term financial performance and risk.  I recall taking so many notes during one of his talks at an S-Networks “Summer in the City CSR Investing Summit” that the fellow next to me told me to stop.  My laptop keyboard clicks were making too much noise and he also wanted to hear Henry speak.

  • The available ESG data sets are too expensive for many FAs to afford.
  • ESG data sets are complex and hard for advisors to navigate and understand. They focus on detail over substance and have “holes” in their data that make comparisons difficult.
  • FA clients have personal biases and views that demand client-specific adjustments. The correct portfolio of one client may not fit the needs of an FA’s other clients.
  • Clients have expected (and FAs have promised) that ESG-oriented portfolios will outperform those that do not take corporate social responsibility considerations into account. ESG funds have more or less performed in line with the market—but most of those currently offered have not been around that long.  We have not seen yet an ESG fund show consistent multi-year outperformance.

Henry has stated publicly that he believes investors and their advisors who care about ESG issues should seek to earn only market rate returns.  I agree with him.  He and I both believe that it is possible to construct a market-performing portfolio of investments that reflects a client’s personal values, if one uses a broad enough initial investment universe.  Henry’s new site is an attempt to provide practical advice and tools for implementing these ideas.


Bahar_Gidwani-9Bahar Gidwani has built and run large technology-based businesses for many years. Bahar holds a CFA (Chartered Financial Analyst) and was one of the first people to receive the FSA (Fundamentals of Sustainability Accounting) designation from SASB. Bahar worked on Wall Street with Kidder, Peabody, and with McKinsey & Co. He has founded several technology-based companies and is a co-founder of CSRHub, the world’s broadest source of corporate social responsibility information. 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 18,052+ companies from 135 industries in 133 countries. By aggregating and normalizing the information from 556 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, API partners 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 sustainable investing, ESG, financial advisors

CSRHub and The National Wildlife Federation Announce Partnership

[fa icon="calendar'] Jun 7, 2018 11:10:55 AM / by CSRHub Blogging

CSRHub and NWF                                                                      

CSRHub is pleased to announce it has formed a partnership with The National Wildlife Federation (NWF). The NWF is the United States' largest private, nonprofit conservation education and advocacy organization, with over six million supporters, and 51 state and territorial affiliated organizations (including Puerto Rico and the Virgin Islands).

CSRHub is the world's largest sustainability business intelligence database. CSRHub’s ratings and tools help professionals benchmark, screen supply chains, evaluate, and improve company sustainability performance.

See how The National Wildlife Federation works with CSRHub as an important part of the careful vetting process used to qualify their corporate partners.

"We are grateful for the excellent work of NWF and very proud to partner with this leading and important organization.” Cynthia Figge, CEO and Cofounder, CSRHub.

Learn more about CSRHub services.

 


CSRHub provides access to the world’s largest corporate social responsibility and sustainability ratings and information.  It covers over 18,000+ companies from 135 industries in 133 countries. By aggregating and normalizing the information from over 556 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, API partners and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices, and seek ways to improve corporate sustainability performance. 

The National Wildlife Federation, America’s oldest and largest conservation organization, works across the county to unite Americas from all walks of life in giving wildlife a voice. The organization has been on the front lines for wildlife since 1936, fighting for the conservation values that are woven into the fabric of the nation’s collective heritage.

 

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

[fa icon="comment"] 0 Comments

Earth911.com Interviews: Cynthia Figge, CEO of CSRHub.com

[fa icon="calendar'] May 17, 2018 9:32:21 AM / by CSRHub Blogging

Republished with Earth911.com permission.

Consumers have access to corporate sustainability and social responsibility reporting they earth911can use to select the companies they can trust to act ethically. With the rise of "big data" and transparency, there is more information on which to base a smart buying decision than ever before. Cynthia Figge, co-founder and CEO of CSRHub.com, a Seattle-based website that rates and ranks companies based on environmental and social responsibility, joins Mitch Ratcliffe to discuss what CSR reports cover, why business has learned sustainability is good for their bottom line, and how consumers can begin to access CSR data -- including on Earth911.com

Listen to "Earth911.com Interviews: Cynthia Figge, CSRHub.com" on Spreaker.

 


cynthia_figge-at-Sustainable-Brands-13-9Cynthia 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 CEO 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 is Chair of the Board of Compassionate Action Network. Cynthia has an MBA from Harvard Business School. Cynthia is based in the Seattle area.

CSRHub provides access to the world’s largest corporate social responsibility and sustainability ratings and information.  It covers over 17,900 companies from 135 industries in 133 countries. By aggregating and normalizing the information from 556 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, API partners 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 CSR Discussion

An Open Letter to President Drew Faust, Harvard University

[fa icon="calendar'] Apr 20, 2018 9:55:26 AM / by Carol Pierson Holding

Drew Faust-Harvard

In a few months, you will retire from Harvard University and be free to direct your colossal talents wherever you want. I’m writing with an idea of how you could contribute to the climate change mitigation effort in a way no-one else can, and in the process, reverse what I think may be the only blemish on your otherwise outstanding record: forsaking the divestment movement.

You once said, “Climate change represents one of the world’s most consequential challenges.” I too am passionate about addressing climate change, writing commentary through the lens of business principles I learned at Harvard (MBA 1980). I used these principles to study divestment, and I came out in favor.

After five years of protests, arrests, lawsuits, sit-ins, blockades, petitions and verbal and written criticism, including my own commentary, you sent a junior investment manager to announce that Harvard’s Endowment intends to “pause” on investing in “some” fossil fuels. Your action pacified the student protestors but it disappointed me.

I’m sure you were facing pressure from those against divestment, especially donors whose fortunes come from fossil fuels. I was astounded to read one alumni denier’s claim that “…it is clear that CO2 causes little global warming” and another that “…you ‘believers’ feed the flames of needless CO2 panic just to blame conservatives for something.”

Still, your decision galls me, even now, one year after Harvard’s feeble divestment announcement, and I needed to understand it.

I decided to take a look at what else was going on in your life over the five years of the divestment struggle. The first thing I came across was this: Ric Burns’ documentary Death and the Civil War, based on your book This Republic of Suffering, premiered in September, 2012, about the time the Divest Harvard movement had its first meeting. You were the film’s source; you provided narration and on-screen interviews; you participated in the promotion tour.

So I watched the documentary. In the first fifteen minutes, I learned that over the four years of the Civil War, our nation lost 750,000 of its citizens, or 2.5%, or what in today’s world what would equal seven million Americans, death that touched every person in the country, death that was in and of itself overwhelming and “greater in scale and power than any ever before imagined.” A horrifying fact, vividly portrayed.

I couldn’t let go of that statement, that in today’s terms, deaths of 2.5% of the population would be seven million people. The New York Times described the film as “A Wave of Staggering Loss, in a Country Unprepared.” And I wondered just how many, many more deaths would result from climate and environmental changes, over how many, many more years. Earlier this year, the World Health Organization estimated 12.6 million deaths a year worldwide are the result of degradation in air and water quality and chemical hazards. That number doesn’t include deaths from rising sea levels, extreme weather, floods and droughts, dislocation, and so on. No one dares to project total mortality. That loss would be as incomprehensible as the human toll from the Civil War was to mid-19th century Americans.

In your 2015 speech at Tsinghua University in Bejing, China, you said, “The commitments of governments can be carried out only if every sector of society contributes. Industry, education, agriculture, business, finance, individual citizens—all are necessary participants in what must become an energy and environmental revolution.” I found my way of contributing, writing pieces intended to convince business leaders that climate change adaptation is sensible and fiscally prudent.

You closed your speech with a quote from architect and urban planner Wu Liangyong: “My dream about the future is that we could live… in harmony with nature.” I try to get that sentiment across in my more positive pieces, to advance a sustainable belief system in which we quit trying to vanquish nature and decide instead to corral her as our partner. That simple conviction could enable real solutions, and I’m continuing to advance that idea.

But I fear we’re both speaking to the believers. We’re missing the other piece, the piece that’s relevant no matter how you think about nature, the mortality we’re already seeing, those staggering losses from floods in Florida and wildfires in California to tainted water in Flint, in a country that can’t believe it’s happening even as we’re beginning to feel overwhelmed. This may be the contribution you’re meant to make, one that only you can bring to the environmental revolution: Help us be ready. Tell us how much worse our future will be, as we face staggering loss, if we’re unprepared. It’s not the past history but future history. Write another book; turn it into another movie and lay it out as you did in Death and the Civil War. Predict what new institutions we will need to be resilient. Show what major mutations to our society will be required. Remind us how we adapted during the Civil War. Tell us again that we can prepare for radical overhaul even amidst death that feels unbearable.

Or perhaps because of it.

Photo courtesy of  Art Poskanzer.


Carol Pierson Holding photo-2Carol 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 17,000+ 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 Drew Faust, Divestment

Subscribe to Email Updates

Lists by Topic

see all

Posts by Topic

see all

Recent Posts