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

CSRHub recently added Covalence’s ESG ratings to its ESG data aggregation system. Covalence contributed ratings on more than 9,200 companies.

Founded in 2001 in Geneva, Switzerland, Covalence helps investors integrate ESG factors while controlling greenwashing with its AI-powered scoring system and data feeds. The Covalence approach is based on a diversity of sources of information and relies on web monitoring and artificial intelligence together with human analysis. They compare ESG data publicly reported by companies to online narrative content reflecting the perceptions of stakeholders such as the media and NGOs. This approach allows users to track inconsistencies, monitor changes and benefit from timely alternative data.

Hundreds of companies violate US federal, state, and local laws each year. Do these transgressions affect how these companies are rated by ESG (Environment, Social, and Governance) experts? Using an excellent data set called Violation Tracker from Good Jobs First, we show there is a 52% correlation between the change in number of violations over a 15 month period and the change in our Leadership Ethics rating. This result suggests that corporate ESG managers need to keep an eye on their company’s legal problems. It may also indicate that those who use ESG ratings in their investment process could predict future changes in some areas of ESG ratings, based on violation patterns.

Does Corporate Behavior Relate to a Nation’s Soft Power?

We have compared data on nations’ soft power from Brand Finance’s Global Soft Power Index with their ESG (environment, social, governance) ratings from CSRHub. A number of soft power indicators correlate well with the views of the other sources available to CSRHub. We also compared the soft power scores with the aggregate ratings of the perceived ESG performance of companies in these countries. The correlation here was poor. We share several reasons why corporate sustainability ratings may relate to a nation’s soft power score.

Goods Unite Us has spent thousands of hours vetting companies' political expenditures in federal elections. They will tell you about the donations made by the organization and its senior employees along with each company's exclusive Campaign Finance Reform Score. CSRHub measures the environmental, social and governance performance of thousands of companies by aggregating 700 sources to derive consensus ESG ratings.

This past year of social and environment pressures (Covid-19, racism inequity, climate change, global risks) has created a new wave of demand for ESG data and insight. A growing number of corporates, professional firms and financial asset owners and managers are interested in ESG.

As the 2020 ESG (Environment, Social, and Governance) season begins, we appear to be entering the third era of ESG investment integration.

CSRHub is honored to once again have our metrics included in the Drucker Institute Management Top 250 Rankings this year.

The Harvard Business Review (HBR) just released its prestigious ranking of the 100 best-performing CEOs in the world. The top CEO in the S&P Global 1200 is Jensen Huang, CEO of the U.S. technology company NVIDIA. The top ten CEOs are from companies including Nvidia, Salesforce.com, Kering, Texas Instruments, Iberdrola, Adobe, Mastercard, KBC, Microsoft and LVMH. You can see the full list here. 

Do bigger companies get better ESG ratings than small ones?  We believe the answer is “no.”  This seems true across a wide range of companies, whether one measures size by revenue or by market capitalization (a proxy for enterprise value).  Our result indicates that small companies can and should expect to be able to equal or outperform their bigger rivals on environment, social, and governance (ESG) issues.