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

New Stock Performance and ESG Research from MSCI

[fa icon="calendar'] Feb 25, 2013 9:00:53 AM / by Bahar Gidwani

 By Bahar Gidwani

As a CFA (Chartered Financial Analyst) and past denizen of Wall Street, I am always MSCIinterested to see studies that relate data or trends to the performance of a group of stocks.  The SRI (Socially Responsible Investment) industry has been producing some interesting work in this area, recently.

For instance, our data was used as part of a study by Governance & Accountability on the relationship between sustainability and stock performance for the S&P 500.  Our friends at GovernanceMetrics put out a study that showed a connection between the Accounting and Governance Risk (AGR) data and default in the CDS market (11 times more likely for companies in the bottom decile vs the top decile).  And, our friends at Trucost have just released an extensive report on the State of Green Business (co-produced with GreenBiz).

Now MSCI’s research group has published a fascinating study that inspects three commonly-used strategies for integrating ESG (Environment, Social, and Governance) factors into portfolio management:

  • “ESG exclusion” describes a process that strips out “bad” stocks and overweights a portfolio with the top rated companies among the “good” stocks.
  • “Simple ESG tilt” underweights “bad” stocks and overweights “good” stocks.
  • “ESG Momentum” focuses on stocks that are showing changes in their sustainability performance.  It overweights companies that are improving and underweights those that are lagging behind.

If you want to see the details of MSCI’s analysis of these strategies, you should download their report.  I was surprised to learn that the momentum strategy dominated the other two over the four year horizon of the study.  It was also reassuring to see that all three ESG strategies produced active return benefits.

MSCI will host a webinar on March 21, where they will discuss their results.  You can register for it, here.  Please send me other interesting ideas in this area, and help me stay up to date on the latest development in SRI and ESG.


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 nearly 7,000 companies from 135 industries in 82 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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Agrion Energy Summit Right Around the Corner!

[fa icon="calendar'] Feb 15, 2013 9:37:30 AM / by CSRHub Blogging

Agrion Energy Summit & Sustainability Meeting

CSRHub CEO and Co-founder Bahar Gidwani will be speaking at the Agrion Energy Summit & Sustainability Meeting, February 19-20, 2013, in New York, NY. Joining Bahar’s conference panel, Materiality of ESG (Environmental, Social, Governance) Factors and Data Transparency, will be:


Meyer Frucher
Vice Chairman, NASDAQ OMX Group
Barbara Pomfret
Senior ESG Analyst, Bloomberg LP
Joyce Haboucha
Director of Socially Responsive Investments, Rockefeller & Co.
Matt Orsagh
Director of Capital Markets Policy, CFA Institute

The panel includes both those who generate data and those who receive and analyze it and we will seek to understand how to improve the reliability and transparency of sustainability data.

CSRHub members can use coupon code 2250 when registering at www.agrion.org/new-york2013 for a very generous discount ($400 value)!


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 nearly 7,000 companies from 135 industries in 82 countries. By aggregating and normalizing the information from 200 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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CSRHub’s Bahar Gidwani Speaking at Agrion Energy Summit

[fa icon="calendar'] Feb 7, 2013 9:00:20 AM / by Bahar Gidwani

CSRHub CEO and Co-founder Bahar Gidwani will be speaking at the Agrion Energy Summit & Sustainability Meeting, February 19-20, 2013, in New York, NY.  Joining Bahar’s conference panel, Materiality of ESG (Environmental, Social, Governance) Factors and Data Transparency, will be:


Meyer Frucher
Vice Chairman, NASDAQ OMX Group
Barbara Pomfret
Senior ESG Analyst, Bloomberg LP
Joyce Haboucha
Director of Socially Responsive Investments, Rockefeller & Co.
Matt Orsagh
Director of Capital Markets Policy, CFA Institute

The panel includes both those who generate data and those who receive and analyze it and we will seek to understand how to improve the reliability and transparency of sustainability data.

CSRHub members can use coupon code 2250 when registering at www.agrion.org/new-york2013  for a very generous discount ($400 value)!

 


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 nearly 7,000 companies from 135 industries in 82 countries. By aggregating and normalizing the information from 200 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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Five Questions about CSR Metrics

[fa icon="calendar'] Feb 4, 2013 10:01:20 AM / by CSRHub Blogging

By Geoffrey Mazullo 

The interview “Five Questions about CSR Metrics” with Bahar Gidwani, Co-founder and CEO, CSRHub, New York, New York, United States of America, is part of a monthly interview series published by Geoffrey Mazullo, Principal, Emerging Markets ESG.  It was originally published on Emerging Markets ESG on Monday, February 4, 2013 and is republished here with the permission of Emerging Markets ESG.

As previously seen on Emerging Markets ESG

On the first Monday of each month Emerging Markets ESG publishes a special interview with an academic, expert or practitioner about a specific topic with relevance to environmental, social and/or governance (ESG) issues.

This month’s interview, the 11th in the special interview series, is about corporate social responsibility (CSR) metrics and is with Bahar Gidwani, Co-founder and CEO, CSRHub, New York, New York, United States of America.

 

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 6,700 companies from 135 industries in 82 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.  CSRHub rates 12 indicators of employee, environment, community and governance performance and flags many special issues. It offers subscribers immediate access to millions of detailed data points from our 200 data sources. Our data comes from nine socially responsible investing research firms, well-known indices, publications, “best of” or “worst of” lists, non-governmental organizations (NGOs), crowd sources and government agencies. By aggregating and normalizing the information from these sources, CSRHub has created a broad, consistent rating system and a searchable database that links each rating point back to its source.  CSRHub is a B Corporation, an Organizational Stakeholder (OS) with the Global Reporting Initiative (GRI), a silver partner with Carbon Disclosure Project (CDP), and supports both the Global Initiative for Sustainability Ratings (GISR) and the International Integrated Reporting Committee (IIRC).  Bahar Gidwani is Co-founder and CEO of CSRHub. He serves on the Sustainability Accounting Standards Board (SASB) Advisory Board.  Bahar Gidwani was 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 website. 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. Bahar is based in New York City.

 

Emerging Markets ESG:  What are CSR metrics?

Bahar Gidwani:  The CSRHub Corporate Social Responsibility (CSR) metrics allow corporate managers to understand how their company is performing socially relative to other companies in the same industry or geography.  By giving managers “benchmarks”, we allow them to discover the strengths and weaknesses in their company’s sustainability-related policies and practices.  Our metrics assure CSR area managers that they can promote and publicize the things their companies are doing well.  They also indicate which other companies the manager could approach for guidance on “best practices” for CSR-related issues.  And, they allow both CSR professionals and outside stakeholders to track a company’s performance, over time.  By providing broad, consistent, third-party data on performance, metrics allow CSR professionals and their stakeholders to “agree on the facts” and then focus their discussion on the actions needed to improve sustainability performance.

 

Emerging Markets ESG:  Over the past five years, the financial industry has accepted the acronym ESG (environmental, social and governance) to describe the three groups of extra-financial factors that influence corporate performance.  Do you agree with the ESG taxonomy?

Bahar Gidwani:  We studied 14 taxonomies at the start of our project, five years ago.  We looked for common themes and approaches and sought ways in which they could be coordinated and combined.  We elected to use four main pillars: Community, Employees, Environment and Governance instead of the three in ESG (Environment, Social and Governance).

Our decision turns out to be reasonably well supported by an analysis of the data contributed by our data sources.  The 7,265 different data elements we have ingested to date divide up as follows:

Community – 20%;

Employees – 18%;

Environment – 32%; and

Governance – 30%.

It seems to us that we have enough data to provide solid support for four pillars instead of three.  However, our data suggests that the three pillar ESG model is also reasonable.

 

Emerging Markets ESG:  Could you please list the 12 indicators of employee, environment, community and governance performance CSR Hub rates.

 

Bahar Gidwani:  The twelve indicators or subcategories include the following:

Community: (1) Human Rights and Supply Chain, (2) Product, and (3) Community Development and Philanthropy.

Employees: (1) Diversity and Labor Rights, (2) Compensation and Benefits, and (3) Training, Health and Safety.

Governance: (1) Board, (2) Transparency and Reporting, and (3) Leadership Ethics.

Environment: (1) Environment Policy and Reporting, (2) Resource Management, and (3) Energy and Climate Change.

See a detailed description of each of the categories at CSRHub’s Data Schema.

 

Emerging Markets ESG:  CSRHub uses more than 200 data sources.  Is there a common thread among the data these sources provide or are the data points heterogeneous?

Bahar Gidwani:  We work with a wide range of sources.  This is consistent with our goal to get a “360 degree view” of a company’s performance.

 Type of Source

Number

Percent

Business advisor (e.g., BSR)

9

4%

For-profit business (e.g., Glassdoor)

7

3%

Consultancies (e.g., ISOS)

6

3%

Government (e.g., EPA)

18

9%

Stock indices (e.g., Calvert)

9

4%

Wall Street-related SRI

13

6%

Not-for-profit business (e.g., Climate Counts)

86

43%

Publication (e.g., Newsweek)

53

26%

Total

201

100%

 

The table above shows input from an investor perspective (Wall Street-related, stock indices), an activist perspective (not-for profit), an expert view (business advisor and consultancies), and representatives of the public (for-profit businesses, government and publications).

We integrate any source that meets these criteria:

  • Original data that relates to a sustainability issue (generated and developed by the source and not just re-reported).
  • Coverage of a number of companies—enough that we can compare the offered data against the information we get from other sources.  Via this comparison, we are able to map the data properly into our schema, normalize the data values to remove bias, and properly weight it.
  • Updated at least annually.  We seek to track company change—and to provide a feedback loop that will encourage companies to improve.
  • Company-level.  Many sources offer data on products, buildings, or the performance of CEOs, CFOs, etc.  We are interested in company-level ratings.

Emerging Markets ESG:  Which percentage of the 6,700 companies CSRHub covers are in emerging markets?  Is interest in ESG analysis of emerging market companies growing?

 

Bahar Gidwani:  We currently cover 82 countries.  If you look at our coverage regionally, you will see that more than 33% of the companies we cover are outside of Europe and North America.

Region

Number of Companies

% of Total

Africa

105

2%

Asia

1,058

16%

Caribbean

60

1%

Europe

1,390

21%

Middle East

88

1%

North America

3,230

48%

Pacific

326

5%

South America

148

2%

South Asia

147

2%

Southeast Asia

180

3%

Total

6,732

100%

Our visitors also come from a wide range of geographical locations:

CSRHub user geographic data

As you can see, 28% of our visitors come from the developing world.

As we expand our coverage to include more small companies, private companies, and organizations, we expect to add even more data from outside the developed world.  We hope this will allow us to continue to get strong participation from users outside of North America and Europe.

  

Link

http://www.csrhub.com/  


Geoffrey Mazullo is Principal of Emerging Markets ESG and Adjunct Professor at the School of American Law (SAL) in Gdansk and in Wroclaw, Poland.  Following studies of diplomacy, economics and political science, Mr. Mazullo worked as a corporate governance analyst.  He also worked on several donor-funded capital market development and corporate governance projects. He directed the Partners for Financial Stability (PFS) Program, a regional financial sector development program. Since 2006 Mr. Mazullo is chair of the evaluation committee of the NASDAQ OMX Baltic Market Awards. He publishes a weekly expert interview, “Five Questions about SRI” and a monthly special interview on a topic of current interest in environmental, social and governance (ESG) reporting about/in emerging markets.  He holds a BSFS from Georgetown University and a M.Sc. from the London School of Economics and Political Science.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on nearly 7,000 companies from 135 industries in 82 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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Join us for our Valentine's Day Chocolate and Champagne Event!

[fa icon="calendar'] Jan 30, 2013 9:05:15 AM / by Cynthia Figge

By Cynthia Figge

one billion rising

We invite you to “Rise Up Seattle", a One Billion Rising event on February 14th. As co-founder of the local chapter of the Women’s Network for a Sustainable Future (WNSF), Cynthia is happy to announce that WNSF is a co-sponsor of this exciting event.

ONE BILLION RISING began as a call to action based on the staggering statistic that 1 in 3 women on the planet will be beaten or raped during her lifetime.  With the world population at 7 billion, this adds up to more than ONE BILLION WOMEN AND GIRLS.  On February 14, 2013, V-Day’s 15th anniversary, we will join activists, writers, thinkers, celebrities, and women and men across the world as we demand change, strike, dance, and RISE UP in defiance of the injustices women suffer, demanding an end at last to violence against women.

“When we started V-Day 14 years ago, we had the outrageous idea that we could end violence against women,” said Eve Ensler. “Now, we are both stunned and thrilled to see that this global action is truly escalating and gaining force, with union workers, parliament members, celebrities, and women of all backgrounds coming forward to join the campaign. When we come together on February 14, 2013 to demand an end to violence against women and girls it will be a truly global voice that will rise up.”

RISE UP SEATTLE
Chocolate & Champagne Event

February 14th, 5:30-7:30+

The Center for Impact and Innovation

Information and tickets here

$15/person or $25/2 people (All are Welcome)

Ticket includes 2 tickets for champagne and/or microbrew

Be part of V-day, watch sensational dancers, an awe-inspiring singer and see film clips from a recently completed documentary while drinking champagne and enjoying Blommer Chocolates. 

Our RISE UP SEATTLE Chocolate & Champagne event features art forms that celebrate the women and men who rise up to resist violence:

University of Washington Dancers - An Accomplished Singer - Powerful film clips - Amazing dancer Chris Daigre of Ewajo Center, leading participants in a dance of solidarity to end violence against women.

Learn More about the Event's Featured Non-Profits

Thank you to our hosts & sponsors

            

WNSF-Pacific NW website

  Join our LinkedIn Group
Or like us on Facebook


Cynthia Figge, Cofounder and COO of CSRHub is a forerunner and thought leader in the corporate sustainability movement. In 1996 she co-founded EKOS International, one of the first consultancies integrating sustainability and corporate strategy. Cynthia has worked with major organizations including BNSF, Boeing, Coca-Cola, Dow Jones, Noranda 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 SNS Future in Review, Board Director for Compassionate Action Network, and served as President of the Board of Sustainable Seattle. Cynthia has an MBA from Harvard Business School. Cynthia is based in the Seattle area.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on nearly 7,000 companies from 135 industries in 82 countries. By aggregating and normalizing the information from 200 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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