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

I’ve always been clumsy.  There were many broken dishes and glasses in my childhood.  My Mom was always kind about it.  She’d say, “Tears don’t mend broken China.”  She had other similar phrases I remember (e.g., “If you get a load of lemons, it is time to make lemonade!”), but the lesson was always Midwestern positivism.  Don’t sit around moaning about what can’t be fixed—keep moving forward and don’t let your own failures hold you back.

Our recent election broke dishes for those of us in sustainability.  Many of my friends in the field and a number of our clients have asked if US corporate sustainability programs will be put on hold for the next four years.

I’m not as good as my mother was, at mending dishes (or comforting someone who is crying!).  But I do see some reasons for hope:

• Well-run corporations care about profit, reputation, and mission. If their sustainability programs generate a profit, reduce risk, or help them accomplish their longer-range goals, they should continue to pursue them.
• Young folks soon take over. We get requests daily from students around the world who need data for a sustainability study or project.  For every student who majors in CSR there are ten other young people who care passionately about the world’s future.  Unless something dramatically changes how young people view the future, we will continue seeing a generation-driven rise in interest in sustainability.
• US companies trade with the rest of the world—and the rest of the world won’t backtrack on sustainability. If a US company wants to be successful in Europe, Asia, the Middle East, etc. it must adhere to a high standard of ethics, respect indigenous peoples, avoid polluting local water supplies, combat climate change, etc.
• US companies have the same stakeholders they did on November 7. Managers, employees, communities, suppliers, customers, and investors will continue to remind companies about the risks that companies will face if they do not behave responsibly. It will remain important to have a “social license to operate.”
• Momentum matters. Corporations are big ships that turn slowly.  They have put money and time into corporate social responsibility (CSR) programs.  They won’t shift these resources into other things, without good reason and a lengthy analysis process.

What types of changes may occur?  Don’t expect stringent new guidelines from US regulators (e.g., the SEC, the EPA, OSHA, etc.).  Look for more boycotts and “buycotts.”  (Several groups are boycotting Trump-related brands and there seems to be a countervailing push to punish firms that won’t advertise on Breitbart.)  Some companies may offer less-sustainable alternatives in certain product areas.  (E.g., muscle cars, heavily-sugared cereals, and other “retro” products.)  Corporations may put on hold major new green investments until things “settle down.” None of this is long-term stuff.  We can mend these pieces and fix these holes.

We at CSRHub see our data and tools as a way to improve how a company communicates its progress and a means to reduce the cost of and improve the effectiveness of sustainability reporting. My mom once put the lid of a tea pot I’d smashed under my pillow and told me that it would give me sweet dreams.  Let’s remember what we’ve been through and all that we’ve accomplished so far.  Then, let’s move forward and dream again, about a better future.

Photo courtesy of  Ruth Edwards

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 16,800 companies from 135 industries in 133 countries. By aggregating and normalizing the information from 500 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.

We are thankful for all the hard work to advance CSR and sustainability this year. In gratitude, CSRHub will give you 10% off an annual plan AND give TEN students a free subscription for their academic research… from now until 12/31. We are calling this our One for Ten for CSR.

Every day we receive many requests from students around the world seeking access to our database for their research on company behavior. These students can change the world and often cannot afford even a reduced fee subscription.  

Many are reviewing their yearend 2016 budgets and telling us they are ready to start their CSRHub subscription. Are you ready to get started, too?  Simply use coupon code ONEfor10 during checkout.

There is no better time to gain full access to the world’s largest sustainability business intelligence database available. Our ratings and rankings tools will help you benchmark, evaluate, and improve company sustainability performance.

• 16,500+ companies to drill down to 12 subcategory levels and pinpoint areas to improve
• Ready-to-go, macro-powered dashboards to do the analysis for you
• API access – custom research – reports
• We can’t tell you this one yet – but it will knock your socks off! We are piloting a new tool to help you figure out which of your “high influencer” raters think you’ve been naughty or nice! 

More easy-to-use tools are under development right now to ensure you have a sustainable and successful 2017! Now is the time to get started - use coupon code ONEfor10 during checkout.

Do you need help picking out the best plan for your needs? Simply contact us and we will be happy to guide you and answer your questions. Please feel free to pass this offer along.

Sincerely,

Bahar and Cynthia

Bahar Gidwani and Cynthia Figge, Co-founders of CSRHub

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 133 countries. By aggregating and normalizing the information from 491 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.

Just Capital was established in 2015 by two successful and well-known investors: Paul Tudor Jones and Martin Whittaker.  Its mission is to use “the power of markets to drive positive change on the issues Americans care most about.”  After two years of research and reflection, Just Capital has now published a list of the 100 best “corporate citizens.”

We’ve been interested in this project from its inception and provided the Just Capital research team with access to our ratings and other data.  Unlike other ratings systems that attempt to decide what things are good behavior or bad behavior, Just Capital sought the opinion of ordinary citizens about what defines good corporate citizenship.  When they released the first readings from these surveys last year, it caused a stir within the sustainability community by showing that social and ethics issues were more important to most Americans than environment or other governance issues.

We suspected that Just Capital’s approach would generate ratings that differ from those of the other 491 ratings sources we integrate into CSRHub’s data set.  A simple comparison between the top 100 company ratings and CSRHub’s ratings shows there is about an 8% R Squared between Just Capital’s perspective on corporate social responsibility (CSR) and that of CSRHub’s aggregate of all other sustainability rating sources.

For this first review, Just Capital chose to focus on components of the Russell 1000 Index.  They pointed out that this group of companies has a large market capitalization and that most are headquartered in the US.  (Only around 40 of the current members of the Russell 1000 Index have non-US headquarters.)  One of the planned uses for the Just ratings is to encourage US investors and consumers to support “just” companies.  Investors may find this first list useful, but US consumers and businesses buy products and work with hundreds of large foreign companies that have not yet been evaluated.

Just Capital looked at about 90% of the companies in the Russell 1000 Index.  It sought to discover how these companies performed across 67 different metrics.  CSRHub covers 969 companies from this Index and has access to around 3,000 different metrics on these companies.  Just Capital had to make a number of assumptions and adjustments to account for missing data.  CSRHub’s system automatically adjusts for missing data issues through its normalization and weighting algorithms.  Despite these methodological differences, there is some agreement between our systems.  In particular, the 100 companies Just Capital picked did have better average performance using CSRHub’s rating system than the other 869 companies we rate in the Index.

On the other hand, there were some major differences between our rating systems.  19 of Just’s top 100 companies had overall CSRHub ratings that were in the bottom quintile (lowest 20%) of the 16,500 companies we track.  69 of the 869 companies that didn’t get into the Just 100 were in the top quintile of CSRHub’s ratings system.  To put it another way—the five top-scoring companies in the Just 100 had an average CSRHub rating of 59.  More than 100 of the other 869 that didn’t make the list had CSRHub scores above 59.

In order to better understand the difference in our results, we looked at individual examples.  Companies like Accenture, Intel, Cisco, Johnson & Johnson, and Microsoft were both in the Just 100 and at or near the top of CSRHub’s ratings.  (The average overall CSRHub percentile rank for these five companies was 96%, which means they were perceived in our system to perform better than more than 15,000 other companies.)  As we would expect, these companies had especially strong average scores in the Employee area (average 90% performance) and somewhat lower average scores on Environment and Governance issues (83% and 76%).

The other end of the spectrum was more puzzling.  Here are five examples of where CSRHub’s view diverged with those of Just Capital.

Both Just Capital and CSRHub attempt to remove the influence of issues such as company size.  The ratings we have been using from Just Capital are their “relative” ranking—the measure of a company’s performance compared to others in its industry.  CSRHub’s rankings are also relative (since most of CSRHub’s sources take an industry-centric view of performance) but span all entities rather than just those in one industry.  Many of our sources overlap (and Just Capital had access to CSRHub’s ratings during its research process).  So, why are these five companies included in the Just 100?

The Just Capital folks deserve huge credit for transparency.  There is a tear sheet report on each of the companies in the Just 100—so it is fairly easy to see what factors swayed them to feel that a company deserved to be included.  CSRHub has a similar level of transparency—our users can inspect which sources we used and most of the data details that underlie our scores.

For instance, CSRHub has 62 sources and more than 1,200 ratings indicators for Discovery Communications.  Our systems show below average performance for all aspects of sustainability performance when compared to all of the companies we track (top section), the 128 Broadcasting and Advertising industry companies in our system (middle section), and the 6,374 US companies we have ratings for (bottom section).

In its drill down, Just Capital gives Discovery an above average score on Worker Pay & Benefits based on 7 subscores.

CSRHub’s rating for this labor/pay topic are informed by 20 sources.  There are many negative reports, including:

• No same-sex benefits (IW Financial).
• No tie of compensation to overall climate performance (CDP).
• Poor career management and promotion policies (Vigeo).
• Low pay relative to global standards (MSCI ESG Governance Metrics).
• Lack of Employment Quality monitoring systems (Thomson/Asset4).

These reports are offset somewhat by a positive score from Glassdoor regarding employee satisfaction (this 3.7 score is about 70^th percentile) and 2014 awards from Forbes (Best Workplace), Best Workplace for Commuters, and Working Mother Magazine.  (Note though that only Working Mother repeated its award for 2015.)  It is hard to prove that Discovery deserves a poor score on this topic—but it is easy to see why others might disagree with Just Capital’s assessment.

Just Capital is well supported, media savvy (its launch events have been well attended and its article in Forbes received an “editor’s choice” star), and has a mission that resonates well with the general public.  It has taken a fresh approach to the challenge of evaluating corporate social behavior and its staff spent months forming its opinions.  Just Capital also reached out to the companies it was evaluating and invited them to contribute information.  For instance, Just Capital indicates in its tear sheet that Discovery plans to add same sex benefits for its employees in 2017.  When this is confirmed (and incorporated into the research done by CSRHub’s partners), it may “flip” some of the negative indicators we mention above.

CSR managers for companies who appear on the Just 100 should celebrate their good fortune.  Companies who did not should ask Just Capital to share the details that drove its assessment of their performance.  The CSR managers in these companies may then find facts that could be updated or corrected or areas where new programs could respond to Just Capital’s concerns.  As Just Capital expands its coverage and continues publicizes its ratings, we hope we will see benefits from its work for both corporations and consumers.  CSRHub plans to start incorporating Just Capital ratings into its analysis with its November data set, so that CSRHub users will be able to integrate this new perspective into their broader CSR communications program.

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 133 countries. By aggregating and normalizing the information from 491 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.

4 October, 2016 - ImpactSpace, the open database for the impact investing marketplace, is bringing CSRHub’s environmental, social and governance ratings into the world of impact investing.

ImpactSpace users seeking company information will be able to see CSRHub CSR/ESG ratings and data whenever available. CSRHub provides access to corporate social responsibility and sustainability ratings and information on more than 16,500 companies.

Similarly, CSRHub’s pages on these companies will be linked to the appropriate page on ImpactSpace.  Additionally, CSRHub users will be able to search for ImpactSpace companies on the CSRHub site.  (This search link shows the 119 companies that are already connected.)

The partnership will bridge the growing marketplace for impact investments and the broader effort to track and report ESG (environmental, social and corporate governance) performance. The “impact space” is made up of small companies and private investors, with investments are typically in the millions of dollars. The “ESG” space is inhabited by large, often publicly listed companies, with billion dollar valuations and large institutional investors.

“CSRHub has data on 140,000 smaller companies that it cannot yet rate,” said Bahar Gidwani, chief executive of CSRHub. With help from partners such as ImpactSpace, CSRHub hopes to give many of these smaller companies the opportunity to receive full credit for their sustainability work. This recognition will help them find new customers, attract high quality employees, and receive support from their local communities.”

Impact investors believe there is a business opportunity to support companies for which achieving positive social and environmental outcomes are core objectives. On the ESG side, in general, there are indications that strong ESG ratings signal strong management more broadly.

Both recognize that risk and opportunity are ultimately two sides of the same coin, when it comes to emerging issues such as greenhouse gas reduction, supply chain security and community relations.

“The partnership with CSRHub greatly enhances the value of our datasets for users and expands their scope.” said Zuleyma Bebell, co-founder and director of ImpactSpace.  “Going forward, companies and investors of all sizes can be evaluated and tracked against sustainable development metrics.”

About CSRHub

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 16,511+ 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. Contact: Bahar Gidwani, CEO, bahar@csrhub.com.

About ImpactSpace
ImpactSpace is the open data platform powering the global impact marketplace. Together with our sister site, ImpactAlpha, we are providing stories and data to investors, entrepreneurs and other market participants driving business advantage with social and environmental impact. Contact Zuleyma Bebell, Director, zbebell@impactalpha.com

Brand Intelligence Solutions has entered into an Alliance with CSRHub, the world’s most comprehensive non-financial (Brand/CSR/ESG) rating database, to launch the “360° Brand Intelligence Solutions Benchmark Tool.” Using real time data, you can now benchmark your sustainability and brand story against your competitors and industry leaders.

Elisa Turner, founder and CEO of Brand Intelligence Solutions says, “The fabric of business models has changed. In 1935 corporations and brands were valued based solely on their financial assets and performance – today up to 80% of corporate and brand value is based on non-financial asset performance. It is a fact today that companies who manage their non-financial assets as diligently as their financial ones consistently outperform their counterparts. The challenge corporation’s face today is: how to evolve from the 1935 myopic culture to one that is informed and consistently evolving to meet the required attributes for success today.”

The first step in addressing this challenge is awareness and knowledge of: what is material, industry leader benchmarks, where you rate against the leaders, what are your risks, brand reputation amongst stakeholders and evolving regulations and stakeholder expectations.

Brand intelligence is the aligned management of non-financial assets.

Brand Intelligence is the quality of a company’s non-financial asset awareness engagement, performance, and communication. These assets include; brand reputation, environmental, social, human, product, supply-chain and governance.

Brand Intelligence touches every aspect of your business and brand today. A 360° holistic view of your non-financial asset performance in critical to managing in today’s economy.

For the first time – it is available!

With this tool for the first time, you have a real-time data based 360° holistic view of your non-financial performance from external stakeholders and the ability to benchmark that against industry leaders and competitors. Brand Intelligence Solutions and CSRHub will provide corporations with their external "Brand Intelligence Scores."

The 360° Brand Intelligence Solutions Benchmark Tool is a game changer – for the first time the links between sustainability, brand, communications, and profit are visible and can be measured. This means they can now be managed and in quantifiable terms, just like you do financial ones.

Brand Intelligence Solutions has also entered into an Alliance with FigBytes, a global leader, next generation non-financial management system to launch the “360° Brand Intelligence Solutions Benchmark Tool.”

About Brand Intelligence Solutions

Brand Intelligence is an independent consulting firm, globally recognized as a leader in the area of sustainable business systems and sustainable brands. Founded by Elisa Turner, a trailblazer in sustainable business for 15 years – prior to this she spent 10 years working in the C-Suite of some of the world's most recognized retail brands.

The Brand Intelligence© framework - is a systemized approach developed over 15 years for companies to build, operationalize and manage Brand Intelligence©. For more information about Brand Intelligence Solutions, go to http://www.brandintelligence.solutions/. Please contact Brand Intelligence anytime for more information at elisa@brandintelligence.solutions.

About CSRHub 

CSRHub provides access to the world’s largest corporate social responsibility and sustainability ratings and information, covering on 16,500 companies from 135 industries in 133 countries. By aggregating and normalizing the information from 469 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 academics use CSRHub for sustainability intelligence to benchmark company performance, learn how stakeholders evaluate company CSR practices, and seek ways to improve corporate sustainability performance.

CSRHub is a B Corporation, an Organizational Stakeholder (OS) with the Global Reporting Initiative (GRI), a silver partner with CDP (Carbon Disclosure Project), and a Research and Insight Partner of Sustainability Accounting Standards Board (SASB).