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

Our Annual Look at Newsweek’s Green Rankings

[fa icon="calendar'] Jun 28, 2016 11:04:11 AM / by Bahar Gidwani

By Bahar Gidwani

The 2016 Newsweek Green Rankings were released last week.  Our friends at Corporate Knights Capital and HIP Investor again provided the underlying data behind the list.

We probably get more questions about Green Rankings and the radical changes in position that seem to occur each year, than for any of the 461 different rating systems we track.  The table below shows the changes in position on the list that five companies experienced over the past three years.  Some of this variation may be due to changes that Newsweek has made in the way its scores are calculated and for 2013 to 2014, changes in its data providers.  (Last year’s list was driven by the same providers but there were several changes made prior to this.)  Some variation may be due to actual changes in the performance of the companies on the list and the relatively narrow scope of the study.  (CSRHub currently tracks the sustainability performance of more than 16,000 companies.)  Finally, the Newsweek Green Rankings are meant to assess and measure environmental performance.  Most other ranking systems cover a broader set of sustainability metrics.

Newsweek Green Rankings

Newsweek’s scores correlate reasonably well with the aggregate score we generate from the views of the rest of the ESG ratings space.  (We use a small amount of Corporate Knights information and share a data provider with HIP.  But, we probably less than 3% of our data set with them.)  As you can see below, the Newsweek ratings have about a 50% correlation with CSRHub’s ratings for each set of companies.

Newsweek CSRHub Score Comparison

However, even with this degree of correlation, there is a relatively poor agreement between the companies CSRHub would choose on Newsweek’s list of 500 companies as the best or worst performers and the companies on the Newsweek lists.  (Note that the rest of the analysis in this post focuses on the Global Rankings.  However, we found similar results for the US Rankings.)

Newsweek Global 500 and CSRHub comparison

We dug in a bit more to see if we could explain what might be driving these variation at each extreme.  A correlation between the Newsweek rating and CSRHub’s four category ratings shows that Newsweek’s score as expected is most closely tied to CSRHub’s environment rating.  There is also a connection with CSRHub’s Employee and Governance ratings.  However, there is no statistically supported connection with CSRHub’s Community rating, which includes the three subcategories of Product, Community Development & Philanthropy, and Human Rights & Supply Chain.

CSRHub Regression Analysis

The coefficient for the Environment component of this regression is 2.5X bigger than that for Governance and 4.5X bigger than the effect of Employees.  Still, top Newsweek companies probably need to perform well on at least the “E” and “G” parts of ESG.  The Social “S” part though—Employee and Community issues—has only a weak effect.  This would lead us to predict that some of the difference in rank between Newsweek and CSRHub is driven by differences in these factors.

As you can see below, the top CSRHub companies have average Community and Employee ratings that are 14% and 11% respectively above the average for the top Newsweek companies.  The opposite is true for bottom-ranked companies.

CSRHub Newsweek Community and Employees comparison

The companies who moved up this year are likely to trumpet their success.  Those who moved downward may be able to argue that their overall performance didn’t really change—they only changed emphasis from E and G factors, into the S (Social) area.


Bahar Gidwani Bahar 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.

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A New Title—“EHS and S”

[fa icon="calendar'] Dec 10, 2015 4:23:43 PM / by Bahar Gidwani

By Bahar Gidwani

I recently attended my first National Association of Environmental Managers (NAEM) NAEMconference.  It was fabulous!  Good content and a nice mix of sustainability practitioners from both large companies, small companies, and various types of advisors.  I especially liked the fact that practically everyone I met was on the “front line”—measuring results, setting out strategies, and reporting progress.

One of things I noticed was that a number of the people at the conference had a job title I’d not seen before.  Instead of “Manager of EHS” or “Vice President, EHS” (the “EHS” acronym stands for “Environment Health and Safety”) the new title was “EHS and S.”

Apparently a lot of companies have realized that their environment, health, and safety experts know a lot about another “S”—“Sustainability.”  We at CSRHub have divided sustainability into four areas:  Community, Employees, Environment, and Governance.  I was told that many EHS managers (who had dealt in the past mostly with the Employees and Environment areas) were now being asked to also help with Community relations and with the sustainability reporting aspects of Governance.

This change makes a lot of sense to me.  EHS professionals (NAEM has members who work at 800 different companies) have firmly established their roles within their companies.  They are hands on and tied directly into daily operations.  Their reports often end up on the desk of their company’s CEO—because CEOs increasingly recognize that their company’s success depends on having a clean environmental record and on ensuring that their employees are safe and healthy.  EHS professionals have traditionally had a technical or engineering background.  This makes them comfortable with designing and implementing software-based tracking and reporting systems.  They are used to organizing and rationalizing processes that had not been looked at before, from a fact-based, statistical approach.

It seems that the new “S” role is often the result of collecting together programs that had previously been scattered across various areas.  Employee engagement programs, charitable giving, and product improvement processes are now being tied to and can contribute to the success of traditional EHS programs.

I suspect this shift may relate to the trend towards integrated reporting.  EHS professionals are used to submitting information to government regulators.  They understand how important it is to have data that is both accurate and auditable by outside third parties.  Integrated reporting is driving the “soft” parts of sustainability management toward greater accuracy and exposing them to scrutiny by both internal auditors and outside stakeholders such as investors and non-governmental organizations.

Next time you come to an NAEM conference, look at the cards you get.  I’m sure you’ll see many that sport an extra “S.”  Ask the question I did—“Does that extra letter mean you got another 1/3 added to your budget?”  I’m sure those you ask will laugh as hard as those did, as most have neither gotten more budget—or a raise—despite the extra burdens they’ve accepted.

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 15,000 companies from 135 industries in 132 countries. By aggregating and normalizing the information from 400 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.

 

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CSRHub Simplifies Sustainability Benchmarking: An Interview with CSRHub Co-founder Cynthia Figge

[fa icon="calendar'] Nov 4, 2014 9:35:51 AM / by CSRHub Blogging

As previously seen in the WiznessBlog.

benchmarking

Wizness and CSRHub have joined forces to simplify sustainability benchmarking against Cynthia Figge, Co-founder and COO of CSRHubcompetitors. CSRHub co-founder Cynthia Figge answered questions about her company and how the new benchmarking product will benefit users.

Q: What is CSRHub’s goal and purpose?

A:  CSRHub aggregates information about corporate social performance into one place so companies and individuals can track sustainability worldwide. It’s the first easy way to discover how companies perform and compare on sustainability and CSR issues.

 

Q: What was the genesis of CSRHub?

A: My partner Bahar Gidwani and I founded CSRHub in 2007 to solve the CSR data problem. Back then, there were many often conflicting data sources – sound familiar? We were the first company to recognize that the growing body of CSR information would soon require a Big Data solution. We figured out how to combine the data into a single rating that incorporates an ever-growing number of sources. We started with the premier environment, social, governance, the ESG firms, also known as socially responsible investment or SRI — we aggregate nine now — and added data from 300 sources so far and counting, NGOs plus government agencies, social networking groups, indexes and publishers. Our proprietary tools combine more than 60 million pieces of data on sustainability and CSR performance into a consistent set of ratings.

Q: Who are CSRHub major ESG/SRI data sources?

A: Our sources include premier ESG organizations ASSET4 (Thomson Reuters), CDP (Carbon Disclosure Project), EIRIS, GovernanceMetrics International, IW Financial, MSCI (ESG Intangible Value Assessment and ESG Impact Monitor), RepRisk, Trucost and Vigeo.

Q: What is the CSRHub schema?

A: Our data schema lays it out in detail, but generally our ratings are based on four categories: Environment, Employees, Community, and Governance. Each category has three subcategories. For example, within the Environment category there are Environmental Policy and Reporting, Energy and Climate Change, Resource Management. For Employees, Diversity and Labor Rights, Compensation and Benefits, Training Health and Safety, and so on.

Q: How are people using CSRHub ratings?

A: The market uses us for six applications:

First, for benchmarking. Our ratings and analysis tool covers 9,296 companies across 135 industries to track competitors over time.

A lot of our users analyze performance by stakeholder for CSR and Sustainability Reports. We offer a, single powerful interface to over 348 sources of information.

Professors and students conduct academic research and projects. Our tool analyzes six years of data and over 60 million data points, and is currently used in hundreds of universities globally.

Sustainability is increasingly important to company brand. Companies use us to build authentic brand values and increase customer loyalty.

CSRHub is used to build a world-class sustainable supply chain. Our APIs can map into a company’s supply chain network across 106 countries.

Finally, we find that sustainability performance is increasingly a factor in economic decisions. People search for places to work, brands to buy, and partners to support based on their values.

Q: How does CSRHub enable comparisons between companies? Can we really integrate apples and oranges?

A: The CSRHub schema maps data elements from all these data sources into the twelve subcategories, then aggregates and normalizes the data for comparability. The schema isn’t unique, but the aggregation and normalizing absolutely is. Bahar and I together had the perfect skillset to attack this challenge. We met at Harvard Business School. I went on to cofound EKOS International, one of the first consultancies to integrate sustainability and corporate strategy, way back in 1996 if you can believe it. Bahar has a CFA and built and ran Web-based and technology-based businesses on Wall Street with Kidder, Peabody and for McKinsey.

Q: Why is knowing my CSRHub rating and ranking in my industry important?

A: Benchmarking is key to competing successfully and creating value. Knowing your CSRHub rating and ranking enables your company to gain an independent perspective about how well you perform compared to other companies, identify specific areas for improvement, and monitor company CSR performance over time. Integrating CSRHub benchmarking across divisions enables a company to prioritize improvements and provide greater transparency of progress.

Q: How will CSRHub and Wizness work together?

A: CSRHub and Wizness are collaborating to create a Benchmark Template Report available on the Wizness Publisher website. Our reports will be streamlined, digital, social and mobile solutions for key stakeholders interested in sustainability data and progress.

Q: When will this benchmarking tool be available?

A: An early preview of the report is available now in PDF form at the following address: https://publisher.wizness.com/csrhub

Photo courtesy of Wizness.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 9,200+ companies from 135 industries in 106 countries. By aggregating and normalizing the information from 348 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 change the world.

 

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Kohl’s Corporation CSR Performance Benchmark

[fa icon="calendar'] Feb 14, 2014 9:00:38 AM / by CSRHub Blogging

CSRHUB Logo

Corporate Social Responsibility (CSR) and Sustainability metrics site CSRHub recently updated its ratings on Kohl’s Corporation and the 186 companies in the Retail industry.  Kohl’s overall rating currently is 57 after the most recent updates to their CSRHub page.

The average rating for the other companies in the Retail industry is steady at 53.  Kohl’s has maintained a steady place on the list, using the CSRHub average user profile. You may see more information about Kohl’s at their CSRHub page here.

Kohl’s has a score of 61 in the Community area.  This is due to a high score in Human Rights and Supply Chain of 69—well above the average for this industry of 53.  The area with the greatest opportunity for improvement for Kohl’s is the Transparency and Reporting subcategory.  Here, Kohl’s gets a 49 —which is the same as the industry average.

Some highlights of the progress that Kohl’s made in the past year include:

  • Kohl’s Department Stores Recognized with 2013 EPA Sustained Excellence in Green Power Award
  • Kohl’s Department Stores Donates $150,000 to the American Red Cross to Support Flood Relief Efforts in Colorado

See Kohl’s Corporate Social Responsibility website here.

 


CSRHub ratings are on a scale of 0 to 100, with 100 being the highest. To see more on how CSRHub creates a score and the CSRHub rating rules, visit here.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 8,900 companies from 135 industries in 103 countries. By aggregating and normalizing the information from 304+ 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 change the world.

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March Data Madness for CSRHub

[fa icon="calendar'] Mar 18, 2013 9:00:18 AM / by Bahar Gidwani

By Bahar Gidwani

CSRHub recently extended the historic data available to its subscribers back to 2008.  Our users can now study the month to month change in sustainability performance for thousands of companies from December 2008 to the present.

We current rate 7,200 companies, using data drawn from more than 200 sources.  Our data set has been growing steadily at about 100 new companies rated per month.

March Madness

We use the wide range of data types and perspectives our sources give us to adjust and normalize our data.  We used normalization factors based on our robust 2010 to 2012 data sets to adjust the more limited data sets we had for 2008 and 2009.  As a result, our ratings have remained remarkably stable.

CSRHub March data

Any registered CSRHub user can see a chart that shows the corporate social responsibility (CSR) performance of the companies we track, since 2008.  In many cases, the chart will show partial ratings for a number of months, and a gradual build towards a full rating.  The consequence of a CSR problem can often be tracked visually.  For instance, see these charts for BP following the Gulf Oil spill and the effects on Tepco’s ratings of the Fukishima meltdown.

BP

The Deepwater Horizon oil spill occurred in April of 2010.  By October, all of BP’s ratings had begun to fall.  The worst damage occurred in its Community category score—which fell from the low 60s to the low 40s.  BP’s overall score stabilized in the middle 50s by early 2011 and has remained in that area since then.

TEPCO

Japan was struck by a major tsunami on March 11, 2011.  Tepco’s Fukishima reactor became a worldwide center of attention in the weeks that followed.  Tepco’s environmental score took an immediate hit, followed by drops in its governance and employee scores as more details emerged of how the company had handled the event.  A number of governance changes in late 2011 and 2012 have brought that score now to a new high.

CSRHub professional level subscribers can “roll back” our system to any month in the period.  They can see which sources were available for each company in the system at any point in time.  They can also do historic benchmarks and analysis of long-term trends in corporate social responsibility (CSR) performance.

Several university researchers have already launched studies, using this newly expanded data set.  We expect their work to reveal many insights that we can share with you, as they become available.


Bahar Gidwani is a Cofounder and CEO of CSRHub. Formerly, he was the CEO of New York-based Index Stock Imagery, Inc, from 1991 through its sale in 2006. He has built and run large technology-based businesses and has experience building a multi-million visitor Web site. Bahar holds a CFA, was a partner at Kidder, Peabody & Co., and worked at McKinsey & Co. Bahar has consulted to both large companies such as Citibank, GE, and Acxiom and a number of smaller software and Web-based companies. He has an MBA (Baker Scholar) from Harvard Business School and a BS in Astronomy and Physics (magna cum laude) from Amherst College. Bahar races sailboats, plays competitive bridge, and is based in New York City.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 7,000+ companies from 135 industries in 91 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.

 

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