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

The following post is part of a CSRHub series focusing on 10 trends that are driving corporate transparency and disclosure in the coming year. To follow the discussion of each trend, watch for posts on the CSRHub blog every Wednesday.

By Bahar Gidwani

If one consumer complains about a company’s social performance, it is a gripe.  When a horde of them complain at the same time, it is a movement. Bottom up, crowd sources of sustainability information may soon become one of the most important drivers towards corporations becoming more socially responsible.

A surprisingly large number of companies maintain Facebook fan pages, monitor Twitter feeds, and otherwise engage directly with their outside stakeholders. A recent study by Burston-Marsteller showed that 79 percent of the largest 100 companies in the Fortune Global 100 are using at least one social media platform to communicate with their stakeholders. A similar study by The Center for Marketing Research at UMass Dartmouth reported that 90 percent of the leaders of the Inc. 100 group of leading smaller companies said that social media tools are important for managing their company’s brand awareness and reputation.

Early efforts to organize stakeholder pressure have already become an important part of the CSR universe. There are thousands of bloggers who write about sustainability and 179 Meetup groups on sustainability in the New York area, alone. GoodGuide’s smartphone app has been downloaded more than 600,000 times. It helps its users buy sustainable products and to gather data for GoodGuide on user behavior that can drive corporate product development and branding. By collaborating on Glassdoor, the employees of 161,402 companies can share salary information and express their opinion of how they are treated and how their CEO is performing. Services such as Tra.cx, StockTwits, and Hootsuite use Twitter and Facebook data to gage how investors and activists feel about a company.  Tra.cx research shows that many opinion trends are driven by the views of a few well-connected opinion leaders.

Crowds have showed their power with the Arab Spring and the Occupy movement. They put pressure on Rush Limbaugh’s advertisers, News Corp, and CNN when they disagreed with their behavior. A number of the 150+ sources we use to generate our CSRHub ratings come from crowd sources. We expect to add more and to perhaps contribute to the power of crowds, by allowing our users to share CSRHub company ratings, search settings, and ratings profiles with each other.

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.

By Bahar Gidwani

The subject of this post could be summarized as (for those who know Latin) scientia potentas est. This is a quote from Francis Bacon that means, “in knowledge is power.” We recently contributed knowledge from our sustainability information system, that helps substantiate some ground-breaking research. Both studies showed a connection between strong social performance and a commitment to sharing data and knowledge. We hope these research studies will be powerful tools for influencing corporate behavior.

On March 6, Cora Lee Mooney, in conjunction with the BrownFlynn team, published a report called “GRI Application Levels: Why Strive for an A?” Brown Flynn is a both a well-known sustainability consulting firm and one of only a few GRI-certified training partners. They wanted to understand if companies benefit from receiving the A level for their Global Reporting Initiative (GRI) report. Do they get credit for the hard work this accomplishment requires, from outside stakeholders? With a lot of hard work, they confirmed that there was a positive relationship between GRI application level and CSRHub’s sustainability rating score.

The folks at Brown Flynn were careful not to claim that the simple act of reporting information caused companies to be more positively viewed. It is possible (and perhaps even likely?) that companies that adopt GRI reporting are good corporate citizens, even before they start the reporting process. For instance, the following graph shows that the distribution of ratings on the CSRHub system for companies who commit to the UN Global Compact, is much better than those who do not.

Still, establishing a connection between GRI ratings and perceived sustainability performance is important. Those who want to find good companies to work with, buy from, supply to, or serve can start with those who participate in GRI. Further, showing that each higher level of GRI participation is associated with a higher average sustainability score may encourage companies to push to report more.

About a week ago, we learned that Christopher J. Hughey and Professor Adam J. Sulkowski at the University of Massachusetts Dartmouth had used CSRHub data to study the relationship between the amount of information companies release and their perceived social performance. The authors used standard statistical tools to prove a correlation between the amount of data that companies in the oil and gas industry disclose and their sustainability score on CSRHub. The idea that more data leads to a better score is one we’ve looked at in several ways. (The chart below shows the correlation between number of sources of data and overall rating across our entire coverage universe.) This paper was the first we’ve seen that nailed things down scientifically.

Over the past year, we’ve supplied data for and supported studies by several of our partners, including NGOs, research houses, and publications. As our database grows (we now have more than 10 million data elements), our coverage widens (we have partial data on 83,000 companies), our number of sources increases (we will soon have more than 150 sources), and our time scale lengthens (we now have 17 months of ratings history) we should be able to empower many types of research, in many fields. It is great to see how seriously firms like Brown Flynn and academic groups such as UMass are probing and analyzing sustainability performance. Thanks to their work, we are starting to see our field move away from arguments based on what should be right, to arguments based on what we can prove is right. A sound basis in well-studied facts should allow us to win over those who doubt and question the importance of corporate social responsibility.

Recently I had to buy a new cartridge for my ink jet printer.  I went to Staples and bought the cartridge.  They took the old cartridge from me to recycle it, and gave me a $2 credit on my Staples Rewards card.

Today, one of the fluorescent light bulbs in our kitchen burned out. I took it with me to the hardware store so I could get the right replacement. On the way, I noticed that the bulb had mercury in it (it had a big “Hg” label on the bottom).  So, I asked the hardware store guys if they would dispose of it for me.  They said they’d be happy to dispose of it, but that it would cost me a dollar to do it.  That is what they were charged by their waste company for hazardous waste disposal.

Ever wonder why people don’t recycle?  Think about the difference between getting a dollar (actually two dollars!) and giving a dollar.  Most of us prefer the latter to the former.  There is some value in the toner cartridge (they can be refilled and reused) and no value to the light bulb, but I’ve seen the effect of putting a deposit on bottles and cans—they don’t get thrown out on the street anymore.

The folks at EPEAT have persuaded most of the electronics industry that they need to facilitate recycling—even if only to avoid the risk of criticism (and regulation) in the future.  Why can’t other industries do the same?

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.

New Paltz, NY

CSRHUB is proud to announce the launch of its Sustainability Ratings Widget. This tool, currently in beta, will enable users to quickly access environmental, employee, community and governance ratings on about 5,000 publicly-traded companies in 135 industries in 65 countries. The widget will appear on a new sustainability section of The Huffington Post and on Triple Pundit, an innovative sustainability new media site.

“We are excited to release our Sustainability Ratings Widget, and pleased that The Huffington Post and Triple Pundit share this excitement,” said CSRHUB Co-founder and CEO, Bahar Gidwani. “Knowledge is power, and CSRHUB gives the widest access to companies’ CSR and sustainability performance to help people make their social value convictions actionable.”

CSRHUB developed the widget as part of a suite of API tools that allow web publishers and software developers to integrate sustainability and corporate social responsibility (CSR) information into their products. CSRHUB also plans to release a RESTful-API into its 1.9 million item database of sustainability information. You can see an early release of the widget at http://www.csrhub.com/content/sustainability-rating-widget.

CSRHUB announced its new tool at the Strategic News Service (SNS) Future in Review (FiRe) technology conference, where it was named a 2011 FiReStarter company. CSRHUB was showcased by the BBC and on panels throughout the conference. The Economist has called FiRe “The best technology conference in the world.”

“We were selected as a FiReStarter company based on our potential to bring positive change to the world,” said Cynthia Figge, CSRHUB Co-founder and COO. “This validates the significance of CSRHUB’s work providing open access to sustainability information.”

CSRHUB is a corporate social responsibility (CSR) ratings tool and sustainability information hub that enables managers, researchers, consultants, students and activists to track the CSR and sustainability performance of major companies. CSRHUB aggregates data from more 100 sources to provide its users with a comprehensive source of CSR information on about 5,000 publicly traded companies in 65 countries. CSRHUB is a B Corporation. Browse CSRHUB’s ratings at www.csrhub.com.

CSRHUB is proud to announce that it has been selected by the Strategic News Service (SNS) as a 2011 FiReStarter company, to be featured at the SNS annual Future in Review (FiRe) technology conference opening this week in Laguna Beach, California. FiReStarter companies are selected based on their potential to bring positive change to the world, and are showcased during the conference, both with the BBC and on conference panels. CSRHUB will be presenting on Thursday, May 26^th. 

CSRHUB is a corporate social responsibility (CSR) ratings tool and sustainability information hub that enables managers, researchers, consultants, students and activists to track the CSR and sustainability performance of major companies. CSRHUB aggregates data from more 100 sources to provide its users with a comprehensive source of CSR information on about 5,000 publicly traded companies in 65 countries. CSRHUB is a B Corporation. Browse CSRHUB’s ratings at www.csrhub.com.

“We are thrilled to have been selected as a FiReStarter company,” said CSRHUB Co-founder and COO, Cynthia Figge. “Knowledge is power, and CSRHUB shines a brighter, broader light on companies’ CSR and sustainability performance to help people make their social value convictions actionable. It’s an honor to be recognized for these efforts and to share the stage with a group of truly world-changing companies.”

Future in Review is an annual gathering of world-class thought leaders in technology and economics. FiRe attendees convene each year with the goal of solving major world problems; a goal that is consistently met through FiRe’s collaboration across disparate industries and the intellectual and strategic guidance of FiRe Chair and SNS CEO, Mark Anderson. Now in its ninth year, Future in Review 2011 will take place May 24-27^th at the beautiful Montage Resort in Laguna Beach, California. The Economist has called FiRe “The best technology conference in the world.”

“CSRHUB is doing what everyone else is just talking about: bringing the truth about corporate sustainability practices to customers, partners, and even to those who run these companies. We are proud to feature CSRHUB as a FiReStarter Company,” said Anderson, FiRe Chair and SNS CEO.

To register, and to see the agenda, go to www.futureinreview.com.

Press Contact: Cynthia Figge           

CSRHUB, LLC.

New Paltz, NY

Tel. 206 954 9542

Email: Cynthia@csrhub.com

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