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

by Bahar Gidwani

Now CSRHub Has 176 Sources with Transparency International 

One of our missions is to promote “transparency.”  We believe that knowledge is power and that good data will lead to good actions.

So, it was natural that we would be drawn to the work of Transparency International.  Through more than 100 national chapters worldwide and an international secretariat in Berlin, Transparency International works with partners in government, business and civil society to put effective measures in place to tackle corruption. Transparency International is politically non-partisan and determines their programmes and activities – no donor has any input into Transparency International’s policies.

We track all 105 of the companies that Transparency International follows.  You can see them all by clicking on this link.  The average overall CSRHub rating for these companies is 55—a healthy step above the 49 average for all companies in our system.  We are sure that Transparency (both the org and the concept) has played a role in this success!

More training partners

We recently added two new training partners to our system.  One 4 All CSR and Centre for Sustainability and Excellence (CSE) both provide instruction on a wide range of sustainability and CSR-related areas.  Like our other partners ISOS and BrownFlynn, these two firms use CSRHub metrics and tools as both a training tool and in their consulting work.

We are starting to track the course schedules for these groups in a new calendar feature that is on our site here.  If you wish to attend one of these courses, please email us at training@csrhub.com.  We will put you in touch with the right person and you will get a discount for being a member of CSRHub.

Subscribe to CSRHub to enjoy all the benefits. Or, request a demo today!

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 5,000 companies from 135 industries in 65 countries. By aggregating and normalizing the information from over 170 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.

The following post is part of a CSRHub series focusing on 10 trends that are driving corporate transparency and disclosure in the coming year. To follow the discussion of each trend, watch for posts on the CSRHub blog every Wednesday.

By Karen Dam

“There is no time for a regulatory business-as-usual approach. After decades of voluntary laissez-faire reporting, the time is ripe for stronger regulatory action.” With this statement, Mervyn King, former Chairman of the Global Reporting Initiative (GRI), called for a more robust regulatory environment at the ESG Disclosure Workshop in 2010. More governments seem to be hearing the call and the trend towards government regulation in CSR appears to be growing.

As noted in the 2010 Carrots and Sticks report by KPMG, the public, NGOs, and investors are demanding that governments take a greater role in sustainability reporting. “Mandating sustainability reporting is a strong signal, sent from regulators to the business community, about the long-term goals and objectives of the country as whole.” (See “The Consequences of Mandatory Corporate Sustainability Reporting”).

Many groups do not trust companies’ ability to regulate themselves. A solution to these questions about voluntary reporting standards would be binding, third party, government standards. These standards could allow stakeholders (and particularly stockholders) to more confidently assess a company’s sustainability, CSR, or ESG efforts. A frontrunner in this regard is the EU, which has consistently emphasized CSR and enhancing economic competitiveness by building trust between business and society.

A number of governments are raising their regulatory bars. In the 2010 Carrots and Sticks report, more than 140 national instruments on ESG reporting were identified, of which about two-thirds are mandatory standards. For example, the Danish Government’s Financial Statements Act of 2001 requires both state-owned companies and companies with revenues over 38 million euro and more than 250 employees to report on their corporate responsibility. The accompanying guidance documents refer to and encourage the use of GRI Sustainability Reporting Guidelines. Austria, Belgium, Canada, Finland, Germany, Netherlands, Norway, Sweden, and the US also formally refer to the GRI G3 guidelines in their regulations. Governments are implementing a mix of voluntary guidelines or codes, incentives, and endorsement of GRI guidelines to mandate at least a minimum level of ESG disclosure.

Not only are governments mandating ESG disclosure, they are showing greater support of CSR activities as a “consumer.” In most countries, government is the single largest individual purchaser of goods and services, so public procurement processes can help advance targeted environmental, social, and governance goals.

For example, the Canadian government via Canada’s Policy on Green Procurement targets specific environmental outcomes where procurement can effectively be used to mitigate the impact of environmental issues such as climate. A number of other governments have initiated ethical and/or green procurement programs that focus on a variety of goods and services including the EU, Japan, New Zealand, Switzerland, the UK, and the US.

With governments taking on a greater role in the CSR field we can expect more ESG disclosure from companies. CSRHub will continue to translate this information into performance ratings so that corporate managers, consumers, and government agencies can make informed decisions about how to improve the sustainability of their society.

Karen Dam is a data analyst at CSRHub. Karen completed her Bachelor of Science in Environmental Sciences at the University of Guelph, and a Master of Environmental Science at the University of Toronto Scarborough. She has enthusiastically filled research roles in the public sector. Karen has experiences in project management and research, including data collection and data management, analysis and synthesis. Karen actively volunteers with NGOs, including conservation authorities, to contribute to ecosystem protection, advocate environmental sustainability and of science literacy. Her hobbies include cycling, reading, and painting. 

By Bahar Gidwani

The term “impulse control” describes how some people are able to delay the gratification of their desires, and resist temptation.  The Wall Street Journal recently pointed out a good study by Fuld & Co. that describes how various groups of corporate managers reacted when faced with an ethical decision.  I’ll let you read the details for yourself.  What interested me was that Fuld & Co. measured (and contrasted) the level of ethical self-control exhibited in different industries.

As you can guess, we can also do a by-industry investigation of ethical behavior patterns with our 5,000-company dataset.  We have two ratings that relate directly to ethics and impulse control—a subcategory called “Leadership Ethics” and one called “Training Health, & Safety.”

The Fuld & Co. study reported that healthcare and pharmaceutical managers had the highest ethical standards, followed by government and education, manufacturing, technology, and financial and business services.

Our ratings are quite different.  We give our highest scores among the industries they mention to the services area for both leadership ethics and on the training issues that should drive employee behavior.  Our lowest scores go to the manufacturing area—especially durable goods manufacturing.

Of course, there is an apples to oranges element to these comparisons.  Fuld & Co. got its answers directly from the responses of senior executives.  Our data comes from the opinions of thousands of outsiders who follow the companies we rate.  Fuld & Co. studied 104 companies--most based in the US.  We track about 5,000 and about half are non-US.

There is also a contrast in the way Fuld & Co. set up its survey.  They asked their subjects a hypothetical question—one that could be seen as a test of their aggressiveness or competitiveness.  In this context, many business people may be tempted (encouraged?) to lean towards a less fundamentally ethical action.  However, when faced with a real world decision—or when asked to provide leadership and direction to the employees who work for them—managers may damp down their hormones and control those bad impulses.

Notice that some of the industries that Fuld & Co. identified as less ethical seem to have better training scores in our system? Perhaps these industries have already realized that managers in their businesses need help with impulse control.  We’ll try to get more details on this study and get more answers to the questions it raises.

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.