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

CSR/Sustainability Performance for ArvinMeritor Inc.

[fa icon="calendar'] Oct 23, 2013 11:00:39 AM / by CSRHub Blogging

Corporate Social Responsibility (CSR) and Sustainability metrics site CSRHub recently updated its ratings on ArvinMeritor and the 94 companies in the Motor Vehicle Parts Manufacturing industry.  ArvinMeritor’s overall rating currently is 56 after the most recent updates to their CSRHub page.

[csrhubwidget company="ArvinMeritor-Inc" size="650x100" hash="c9c0f7"]

Please note, the Sustainability Ratings widget will continually update and show the latest ratings on CSRHub.

The average rating for the other companies in Motor Vehicle Parts Manufacturing industry shifted up one point to 54.  This allowed ArvinMeritor to move up to 24th place on the list, using the CSRHub average user profile, from 29th place. Also see information about ArvinMeritor at their CSRHub page here.

ArvinMeritor has a particularly strong score in the Environment area of 68.  This is due to a high score in Policy & Reporting of 81—well above the average for this industry of 56.  The area with the greatest opportunity for improvement for ArvinMeritor is the Leadership Ethics category.  Here, ArvinMeritor gets a 29—well below the average for its industry of 54.

See ArvinMeritor’s Corporate Social Responsibility website here.


CSRHub provides access to corporate social responsibility and sustainability ratings and information on 8,400 companies from 135 industries in 104 countries. By aggregating and normalizing the information from 290+ 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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Conflict Minerals Company Rankings Compared to CSRHub Ratings and “The Carrot”

[fa icon="calendar'] Sep 24, 2013 7:51:29 AM / by Cynthia Figge

By Cynthia Figge

Companies are under pressure from many stakeholders to report progress towards improved corporate social responsibility (CSR) performance. The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act has created a new source of pressure. The 2012 final rule from the U.S. Securities and Exchange Commission (SEC), requires most companies subject to SEC filing rules to report to the SEC by May 31, 2014, if any of their products produced in calendar year 2013 contain conflict minerals. In July, a federal judge ruled against a challenge to the new conflict mineral rules and upheld the law. Even companies headquartered outside of the United States, and those which do not report to the SEC, may be subjected to conflict minerals requests from customers that report to the SEC. The reporting requirements are intended to eliminate an important stream of funding for armed conflict in the Democratic Republic of Congo (DRC) and surrounding countries where much of the world’s supply of conflict minerals is mined.

At CSRHub, we track over 270 sources of ratings data on how companies are performing on environmental, employee, community and governance issues. Our scrutiny includes how companies manage the conflict minerals in their supply chain. Conflict minerals include tin, tantalum, tungsten and gold (often referred to as 3TG). They are found in many products, including TVs, cell phones, electronics, and automotive products.

The CSRHub team recently examined ratings published by The Enough Project in 2012 that compared the conflict minerals performance of 24 companies in the electronics industry. Enough Project has been ranking these companies since 2010, as they have built systems for managing the new supply chain conflict minerals requirements. Their 2012 report showed that many companies have made significant improvements, with Intel receiving the top score of 60. Of course, there have been some notable laggards, such as Nintendo which received a score of 0.

CSRHub compared Enough Project’s 24 ratings with the governance, environment, employee and community ratings for these same companies on CSRHub. We found a 35% correlation between the Conflict Minerals performance ratings and CSRHub’s governance ratings and a 16% correlation between the Conflict Minerals ratings and CSRHub’s employee ratings. There was almost no correlation between Enough Project’s ratings and the CSRHub community or environment ratings.

Our data shows that companies that are good at governance are probably also good at managing their conflict mineral programs. Their Boards have become involved in the process, their leaders understand the ethical need to care about conflict mineral issues, and they have the necessary commitment to transparency and reporting infrastructure needed to correctly handle the SEC’s new requirements.  The connection to employee treatment may come from the fact that there are health, safety and training issues involved with improving conflict material supply chain management.  Companies with good programs in this area may get a step ahead of those that have not invested as much.

These results are the latest of CSRHub’s research efforts.  Because we now have data on more than 8,000 companies in 104 countries, and because our data set includes input from more than 270 different sources of sustainability information, we are able to find broad connections between operating issues and CSR.  For instance, in June CSRHub unveiled some research that proves the relationship between brand and CSR is even more profound than we thought — around the world, across industry type, and company size. We ran five years of our data against the data of Brand Finance, the global brand analyst headquartered in London. With our overlapping datasets, we analyzed over 1,000 companies, and for 2012 we got a 0.28 correlation between brand strength and CSR. Most astonishing to us was our analysis over time. When we looked back over five years of data, we found that Brand strength to CSR correlation has suddenly strengthened in the last year, doubling in 2012 over 2011. The relationship stayed relatively constant over the previous 4 years. Then in 2012 that correlation more than doubled.

We hope soon to reveal research that will show the relationship between reputation and CSR and between operating returns and CSR.  We believe that connections such as these are necessary, if we want to make CSR and sustainability programs breakthrough platforms  for building strategic advantage.  We hope that the SEC’s conflict minerals requirement will be a major factor in the right direction for the estimated 6,000 companies that will need to tighten up their supply chains.


Cynthia FiggeCynthia Figge is a forerunner and thought leader in the corporate sustainability movement. She is COO and Cofounder of CSRHub, the world’s largest database that aggregates and organizes data and knowledge on the social, environmental, and governance performance of 8,400 companies to provide sustainability ratings to the marketplace. In 1996 she co-founded EKOS International, one of the first consultancies integrating sustainability and corporate strategy. Prior to founding EKOS, she was an officer of LIN Broadcasting / McCaw Cellular, and led new businesses and services with Weyerhaeuser, New York Daily News; and with New Ventures. Cynthia is Board Director of the Compassionate Action Network International. Cynthia received her bachelor's degree in Economics and an MBA from the Harvard Business School. She lives in the Seattle area.


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Join CSRHub’s Cynthia Figge at Sustainable Brands New Metrics conference!

[fa icon="calendar'] Sep 12, 2013 10:06:39 AM / by Cynthia Figge

CSRHub Cofounder and COO, Cynthia Figge, is speaking at the New Metrics of Sustainable Sustainable Brands New Metrics ConferenceBusiness conference sponsored by Sustainable Brands on September 24-25, 2013 at the University of Pennsylvania. Cynthia will be speaking on 2 topics:Evening Plenary Discussion: New Metrics for Trust, Reputation and Green Brand ValueAre current leading measures of trust, reputation and brand value adequate? Up to speed with a rapidly changing landscape of stakeholders' attitudes? What co-creative efforts might assessment and data providers engage in to get to improved metrics of evolving notions of trust, reputation and brand value? How can brands stay ahead of that process?Amy du Pon
Global Head of Data Insights, Havas Media Group

Cynthia Figge
Co-Founder, CSRHub

Denis Riney
Senior Partner, Marketing, BrandLogic

David Metcalfe
CEO & Co-Founder, VerdantixCompare and Contrast: Sustainability Performance Ratings and RankingsWith over 100 organizations working on some kind of sustainability performance rating or ranking, how can companies decide which one(s) to focus on, or manage against? What do the people behind some of the most popular methodologies out there worry about, and is there any order to this seemingly chaotic situation? What should brands worry about in this confusing picture?Mark Tulay
Program and Organizational Development Executive, Global Initiative for Sustainability Ratings (GISR)

Toby Heaps
CEO, Corporate Knights

Bob Mann
COO, Sustainalytics

Cynthia Figge
Co-Founder, CSRHub

Register today at www.sbiif.com/register using the code NWSPKNM for 20% off an All Event or 1-day ticket for the conference.


Cynthia FiggeCynthia Figge is a forerunner, thought leader and speaker on the corporate sustainability movement. As the co-founder and COO of CSRHub, Cynthia's team provides free corporate sustainability ratings on over 8,400 publicly-traded and private companies worldwide. In addition to CSRHub, Cynthia is the co-founder of EKOS International, one of the first consultancies to integrate sustainability and corporate strategy. She has crafted corporate sustainability strategies for a host of major organizations, including BNSF, Boeing, Coca-Cola, Dow Jones, and REI. Cynthia also serves as an advisor to SNS Future in Review, Board Director of Compassionate Action Network, and served as President of the Board of Sustainable Seattle. She has an MBA from Harvard Business School. Prior speaking engagements in corporate responsibility have included SRI Basecamp, Future in Review, Sustainable Brands, and SRI in the Rockies.

 

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Which Sustainability Factors Are Most Linked to Brand Strength?

[fa icon="calendar'] Jun 27, 2013 9:40:19 AM / by Bahar Gidwani

By Bahar Gidwani

Part 5 of our 5-part series

In the previous posts in this series, we have described the relationship between Brand Finance’s Brand Strength Index and CSRHub’s sustainability rating.  The overall correlation between these large sets of data is strong—and it has been growing stronger.  We will now look at how each of the twelve individual components in CSRHub’s metric system relate to brand strength.

CSRHub ingests sustainability information from 230 sources that each have their own way of measuring and rating corporate social performance.  In order to make sense of these different measures (we have more than 9,000 different indicators in our system), CSRHub has mapped each indicator from each source into one of twelve “subcategories.”  (You can see a description of this schema here.)  These subcategories are then grouped into four categories (with three subcategories in each category).

The ratings for each subcategory are forced into a curve that has a central tendency (around 50 on a scale from 0 = low to 100 = high).  There is a natural tendency for subcategory scores to be correlated (i.e., a company who is good on one measure of sustainability tends to be better on all of the others), the correlation between subcategories is generally between 0.25 and 0.5 for subcategories that are in the same category (e.g., Energy & Climate Change vs Resource Management) and between 0.1 and 0.25 for subcategories that are in different categories (e.g., Product and Board).

To understand which subcategories may be more important for brand strength, we performed a multivariate analysis between the twelve CSRHub subcategory scores and the Brand Finance Brand Strength Index.  The results of the regression mentioned show that eleven of the twelve CSRHub’s subcategories have meaningful individual correlation statistics.  Only our Human Rights & Supply Chain measure seems to have no correlation with brand value.

Correlation Between BSI and Each of Twelve CSR Factors

Correlation Between BSI and 12 CSR Factors

We performed a similar analysis on our 2011 data set—using 921 sets of data.  Both the coefficients for the multivariate regression and the relative strengths of the correlations between each subcategory and brand strength were similar.  The extent of correlation was less at all levels for the 2011 data.

We would expect that product sustainability, leadership ethics, and a company’s environment policy and reporting would be tied to brand strength.  These are areas that companies actively invest in and communicate about.  The weaker ties to board performance, transparency and reporting, energy and climate change, and resource management may be due to the fact that consumers have few means to connect these areas with the products they buy.  The most surprising results are the weak relationship between brand and human rights and supply chain issues, the modest effect of community development and philanthropy, and that how companies treat their employees is important to their brand strength.

We have some thoughts to offer on these last three points:

  • Human rights and supply chain.  Our rating in this area goes up when a company is more transparent about its behavior.  It also goes up when a company has few “incidents” with its supply chain and when it takes steps to enforce socially positive policies (such as diversity, fair pay, and workplace safety) on its suppliers.  We suspect that consumers may not understand the complexity of the issues companies face in this area.  They may distrust company communications in this area or dismiss them as “window dressing.”  More communication and transparency may indicate that a company has problems in the area, without making it clear that the company has solved some or all of them.
  • Community development and philanthropy.  Many companies assume their investments in these areas will support their brands.  However, it is hard for a company to brag about its good deeds without appearing to be “paying for love.”  Further, an investment in one community may not pay off with brand benefits in other/all communities.
  • Employee treatment.  Many studies have shown that consumer brand impressions are heavily influence by the behavior of a company’s employees.  Polite, knowledgeable service people; employees who actively serve in community organizations; and personal contact between employees and customers can directly affect how a brand is perceived.

Conclusion and Next Steps

If corporate social responsibility performance drives brand strength, companies have yet another reason to care about their social performance.  We do not advocate cutting expenditures on human rights and supply chain improvements.  We believe that consumer awareness in this area will grow rapidly—spurred partly by news coverage of events such as the recent collapse of a factory in Bangladesh.  However, we hope that our results show companies that investing in better treatment of their employees may also increase the strength of their brands.  Our results also suggest that brand managers may expect to see broad benefits on their brand strength from promoting and leveraging their company’s good social responsibility performance.

We plan to repeat our study using Brand Finance’s next annual BSI data set (due to be released in March 2014).  We are also reaching out to other groups who have brand data and digging into the indicators and data we have from our 230 other data sources.  We intend to study the performance of “outliers”—companies whose brand and sustainability performance run counter to the general trend we have described.  We invite any company or group who is interested in this area to contact us regarding this work.  We will need detailed information and input from the management of both brand-driven and non-brand driven companies, if we want to understand best practice in this area.

View:

Part 1 The Tie Between Brand Value and Sustainability is Getting Stronger
Part 2 There is a Strong Link Between Brand Strength and Sustainability
Part 3
Is the Correlation between Brand Strength and Sustainability Due to Random Chance?
Part 4 The Relationship Between Brand and Sustainability is Getting Stronger


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. Bahar is a member of the SASB Advisory Board. He plays bridge, races sailboats, and is based in New York City.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 7,300+ companies from 135 industries in 93 countries. By aggregating and normalizing the information from 230 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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The Relationship Between Brand and Sustainability Is Getting Stronger

[fa icon="calendar'] Jun 26, 2013 9:50:30 AM / by Bahar Gidwani

By Bahar Gidwani

Part 4 of our 5-part series.

In the last post in this series, we examined our finding that brand strength and sustainability are correlated.  We found evidence that the relationship we have discovered between Brand Finance’s Brand Strength Index and CSRHub’s corporate social responsibility and sustainability ratings are not due to random chance.  Let’s assume the relationship is real.  How has it changed over time?

Both Brand Finance and CSRHub have used consistent methods to evaluate companies over the past five years, from 2008 through 2012.  Because we wanted to see how the brand-sustainability relationship changed for each year, we included all of the available company pairs for 2012 and then for each year, used only the companies that were also present in the following year.  While the number of companies studied in the earlier years is less than that in the latest data set, all years include more than 350 company data set comparisons.

Five Years of Data

5 year Brand study

The correlation between the BSI and CSRHub’s overall rating averaged about 0.11 for the first four years of our study (2008 through 2011).  The jump to 0.22 in 2012 is quite dramatic.

Brand Strength - CSR Correlation Doubled

The 12 factor analysis for 2011 gives a 0.19 correlation.  This is again lower than the 0.28 correlation we get for the twelve factor analysis in 2012.  This confirms that there has been a strong improvement in the relationship we are studying.

We believe there are several reasons consumers may be increasingly aware of corporate responsibility and sustainability performance:

We would expect this correlation to continue to grow, although there should be a natural limit on how much of brand strength can be driven by social performance factors.  We look forward to repeating our study in 2014, when we have a new year of data from our partners at Brand Finance.

Our next and last step will be to see which parts of sustainability seem most closely related to brand strength.

View:

Part 1 The Tie Between Brand Value and Sustainability is Getting Stronger
Part 2 There is a Strong Link Between Brand Strength and Sustainability
Part 3
Is the Correlation between Brand Strength and Sustainability Due to Random Chance?


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. Bahar is a member of the SASB Advisory Board. He plays bridge, races sailboats, and is based in New York City.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 7,300+ companies from 135 industries in 93 countries. By aggregating and normalizing the information from 230 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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