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

A Quick Look at Brand Finance’s 2017 Banking League Table

[fa icon="calendar'] Feb 7, 2017 10:14:04 AM / by Bahar Gidwani

Brand Finance has recently released its analysis of the brand strength for the world’s 500 top banks.  This annual review uses Brand Finance’s royalty relief methodology to estimate how much of a bank’s market value derives from its brand assets.

Over the past few years, we have studied the relationship between brand strength and sustainability.  With help from both Brand Finance and other partners and data sources in the brand measurement space, we’ve determined there is a stable and reasonably strong correlation (between 10% and 30% depending on the source, time, period and type of data) between our data and these gages of corporate success.

Therefore, we were not surprised to see that those banks who had big increases in brand strength also had big increases in sustainability performance and vice versa.  The chart below shows companies who had a two step change in brand strength (e.g., from A to AA- or from AAA to AA+) on the horizontal axis compared to those who had a multi-point change in their overall CSRHub rating.  The top right and bottom right corners show banks where brand and sustainability score changes agree.

Brand Finance - Improved Sustainability - Stronger Brand 2.jpgThere are always outliers in any analysis.  So the presence of one bank (Intesa Sanpaolo) in the top left box didn’t bother us too much.  However, there were four names in the bottom right box, that had brand strength increases but sustainability strength declines.

A quick analysis shows that the driver for the change in perceived sustainability performance for these banks was governance issues—an area we’d previously showed did not have much affect on brand.  These four banks showed relatively little change on the community, employee and environment issues that are most tied to brand.

Bank Governance Issues 2.jpg

We look forward to working with more data from Brand Finance as they populate the rest of this year’s league tables.  Our partnership with Brand Finance allows them to share details of our ratings with their clients.  I’m sure that there will be many banks—and other companies—who will be interested to see how improving their sustainability performance could affect their brand values.

Search a company on CSRHub and see their sustainability performance.

 


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 16,800 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.

 

Read More [fa icon="long-arrow-right"]

[fa icon="comment"] 0 Comments posted in Bahar Gidwani, Brand Finance, brand value, CSRHub, brand strength and sustainability, Bank Governance Issues, Brand Finance’s 2017 Banking League Table

Tears Don’t Mend Broken China

[fa icon="calendar'] Jan 12, 2017 11:32:16 AM / by Bahar Gidwani

renewal.jpgI’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

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.

Read More [fa icon="long-arrow-right"]

[fa icon="comment"] 0 Comments posted in Bahar Gidwani, climate change, CSR, EPA, Profit, sustainability, SEC, CSRHub, Trump, OSHA, Risk

CSRHub's Bahar Gidwani elected member of Global Reporting Initiative Stakeholder Council

[fa icon="calendar'] Nov 9, 2016 8:00:00 AM / by CSRHub Blogging

CSRHub is pleased to announce that our CEO and Cofounder, Bahar Gidwani, has beenGlobal Reporting Initiative's Stakeholder Council elected as a member of the Global Reporting Initiative’s Stakeholder Council. His three- year term will start at the beginning of 2017.

The Stakeholder Council takes a crucial role within GRI’s governance structure, alongside the GRI Board of Directors. The Stakeholder Council is GRI’s formal multi-stakeholder advisory body, which debates and deliberates key strategic and policy issues with a view towards providing advice to the GRI Board of Directors. The Stakeholder Council comprises a balance of stakeholder and geographic constituencies.

 


 

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 16,500 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.

Read More [fa icon="long-arrow-right"]

[fa icon="comment"] 0 Comments posted in Bahar Gidwani, CSRHub, GRI, Global Reporting Initiative's Stakeholder Council

HBR’s Top Performing CEOs List - Financial Results and Sustainability—A Complex Relationship

[fa icon="calendar'] Oct 26, 2016 8:00:00 AM / by Bahar Gidwani

 

The Harvard Business Review (HBR) recently published its 2016 list of the world’s top 100 CEOs.  As in the past, HBR’s staff looked at the financial and ESG (environment, social, governance) performance of the CEOs of 1,200 large companies.  They used a measure of financial performance developed by a team of Harvard academics for 80% of their score.  The remaining 20% came from averaging two overall measures of corporate sustainability performance, including CSRHub.

HBR has been publishing this list since 2010 and CEOs apparently intently study their “rank” and any year-to-year changes.  The list originally included only measures of financial return.  In 2015, HBR started including ESG performance, such as those CSRHub gathers and reports.

Is there a connection between a CEO’s financial performance measure and the corporate social responsibility (CSR) or ESG performance of the CEO’s company?  Those of us who care about sustainability would expect (hope?) the answer is “Yes.”  Unfortunately, details we uncovered during this year’s rating process say that the answer is probably “Maybe” or “It depends.”

 

Are the Top 100 Different From The Rest?

CSRHub rates the perceived ESG performance of 16,550 companies in 133 countries.  We have full ratings on 1,180 of the 1,200 companies that HBR studied.  The table below compares the average performance for the top companies against the rest of the list, for community, employee, environment, and governance issues.  (HBR included 104 companies in its Top 100 list, due to a number of ties.)

 

Comparison of the CSRHub Corporate Social Responsibility Rankings for HBR Top 100 Companies and Those Not Chosen

Comparison of the CSRHub Corporate Social Responsibility Rankings for HBR Top 100 Companies and Those Not Chosen

 

As you can see, the top companies had only slightly better perceived sustainability performance than the rest of the companies.  When we adjust for the different number of companies in each of the two groups, there is a significant (P<0.02) difference only in the Community area.

This suggests that the best CEOs out of this sample of companies pay a bit more attention to issues associated with the sustainability of their Products, have good Philanthropy programs, and care about Human Rights and their Supply Chains.  But, they don’t seem to pay significantly more attention than other CEOs to issues relating to Employees, the Environment, or to their corporate Governance.  And, they still rank in their community efforts below the average of the other 15,000+ companies we track.

 

Are the Top 50 Financial Performers Better Than the Next 50?

What about the “best of the best?”  If we divide the HBR Top 100 into two groups by their HBR financial performance scores, would the top financial performers have better or worse social performance than the bottom group?

The table below shows the answer to this question.  It is probably an answer that many sustainability professionals will not want to hear.  The top financial performers had much worse perceived sustainability performance than those with somewhat worse financial performance.

Comparison of the CSRHub Corporate Social Responsibility Rankings for Top 50 Companies and the next 54 Companies as Ranked By Their HBR Financial Performance Score

 

Comparison of the CSRHub Corporate Social Responsibility Rankings for Top 50 Companies and the next 54 Companies as Ranked By Their HBR Financial Performance Score

 

These results are good evidence that some CEOs may emphasize good shareholder returns (high profit margins, high turnover of assets, strong stock performance, etc.) rather than good social performance (good community relations, happy employees, a clean environment, etc.).  Of course, the HBR study focuses only on very large, publicly-traded companies and there are only 104 companies where we have full data.  But, there is virtually no probability—P < 0.000001—that the top 50 do not trail the next 54 on both overall ratings and on all four categories of social responsibility.

 

Does It Make Sense to Combine Financial With Social?

The table above illustrates why HBR decided to integrate social issues into their ranking.  Using a single financial scale wasn’t teasing out the best CEO performance.  Using only social measures wasn’t doing it either.  Instead, HBR integrated the two measures in a balanced way that resulted in the surprising result shown below.

Comparison of the CSRHub Corporate Social Responsibility Rankings for Top 10 Companies and the next 94 Companies, as Ranked by their Overall HBR Score

 

Comparison of the CSRHub Corporate Social Responsibility Rankings for Top 10 Companies and the next 94 Companies, as Ranked by their Overall HBR Score

 

The financial scores within the Top 100 are pretty similar.  By using a social performance signal to differentiate among these financially similar performers and create an Overall HBR Score, HBR was able to pick a top group that had both good financial returns and strong sustainability performance.  This shows it is possible to both “do well” and “do good.”  Thanks to HBR, CEOs who manage this difficult balance have a shot at getting the recognition they deserve.

 


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 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.

 

Read More [fa icon="long-arrow-right"]

[fa icon="comment"] 0 Comments posted in Bahar Gidwani, Corporate Social Resonsibility, governance, Harvard Business Review, human rights, social, sustainability, ESG ratings, HBR financial performance scores, philanthropy, products, supply chains, CSRHub, employees, environment, HBR, esg performance, top 50 financial performers

CSRHub’s Cynthia Figge to Speak at Sustainable Brand's 2016 New Metrics Conference

[fa icon="calendar'] Oct 25, 2016 8:00:00 AM / by CSRHub Blogging

CSRHub Co-Founder and COO, Cynthia Figge, will be speaking at Sustainable BrandsSustainable Brands New Metrics '16 New Metrics conference, in Boston, Massachusetts, on November 14-16. Cynthia will discuss The Second Generation of ESG Metrics and the Movement to bring “Dark Data” to Light. New Metrics will showcase the macro, corporate and investor landscapes to help business succeed. During the three day conference, new approaches to valuing risk and impact, company goals and KPI’S and new solutions in data management will be among some of the topics discussed.

 

Monday, November 14th, 5:55pm

Rising Waves: The Second Generation of ESG Metrics and a Movement Toward Bringing ‘Dark Data’ to Light

  • Cynthia Figge, Co-Founder and COO; CSRHub

 

Virtually all members of the Sustainable Brands community are asking what changes they can expect in corporate disclosure of ESG metrics over the next few years, and how they can best prepare to transition toward a disclosure landscape that is less confusing, less scattered and more consistent over time. While the first generation of sustainability metrics has been driven mostly by custom self-reported data, combined with hundreds of surveys and ratings, a new wave of ESG disclosure trends is shaping up that promises to meet the needs of all stakeholders. This talk will outline the most important features of the next generation of ESG metrics and explain how ‘dark data’ may play a role in it.

 

Sustainable Brands:

Sustainable Brands is home for the global community of business innovators who are shaping the future of commerce worldwide. Since 2006, their goal has been to inspire, engage and equip today's business and brand leaders to prosper for the near and long term by leading the way to a sustainably abundant future. They do so by offering news and views from thought and practice leaders, live and on-line eventspeer-to-peer learning groups, a robust resource library, a solutions provider directory and more -- all designed to help brand, sustainability and design innovation professionals, social entrepreneurs and the eco-system of value network partners who support them, discover, co-create and successfully execute on new opportunities to profitably innovate for sustainability.

 


 

Cynthia Figge, Co-founder and COO of CSRHub

Cynthia Figge is a forerunner and thought leader in the corporate sustainability movement who co-founded EKOS International in 1996, one of the first consultancies integrating sustainability and corporate strategy. Cynthia is COO and Cofounder of CSRHub. Cynthia has worked with major organizations including BNSF, Boeing, Coca-Cola, Dow Jones, 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 media and technology companies, 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 16,550 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.

 

Read More [fa icon="long-arrow-right"]

[fa icon="comment"] 0 Comments posted in Cynthia Figge, Sustainable Brands, NewMetrics, CSRHub, ESG Metrics

Subscribe to Email Updates

Lists by Topic

see all

Posts by Topic

see all