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

CSRHub Metrics Included in Harvard Business Review Top CEO’s List 2019

[fa icon="calendar'] Oct 22, 2019 12:35:41 PM / by CSRHub Blogging

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. 

HBR notes that they made an important change in methodology this year.  “Since 2015 our ranking has been based not only on financial performance but also on environmental, social, and governance (ESG) 

HBR Top 100 2019_2

ratings. For the past four years we’ve weighted ESG scores to account for 20% of each CEO’s final ranking. This year we tweaked the formula, increasing that share to 30%. The shift reflects the fact that a rapidly growing number of funds and individuals now focus on far more than bottom-line metrics when they make investment decisions. One sign of this changing sensibility: In August 2019, 181 U.S. CEOs who are members of the Business Roundtable signed a statement affirming that the purpose of a corporation is to serve not just shareholders but four other groups of stakeholders: employees, customers, suppliers, and communities.”

This change in weighting significantly impacted ranking results. For example, Amazon’s CEO Jeff Bezos, a top CEO every year since 2014, fell off the list owing to relatively low ESG scores. “The incorporation of 30% ESG data signals a growing shift of perception in what matters to be the best,” said Cynthia Figge, CEO and Cofounder of CSRHub. “We are honored to have CSRHub’s ESG (environment, social, governance) metrics included in the methodology for the fourth year in a row, and now determine 15% of the HBR Ranking of the World’s Best-Performing CEOs.”

You can see the full report available in Harvard Business Review Magazine, found here.

To learn more about CSRHub, our ESG/CSR metrics or how you can improve your ESG scores, contact us here.


CSRHub offers one of the world’s broadest and most consistent set of Environment, Social, and Governance (ESG) ratings, covering 18,000 companies. Its patented Big Data algorithm combines millions of data points on ESG performance from hundreds of sources, including leading ESG analyst raters, to produce consensus scores on all aspects of corporate social responsibility and sustainability. CSRHub ratings can be used to drive corporate, investor and consumer decisions. CSRHub has been a Certified B Corporation since November of 2010. For more information, visit www.csrhub.com.

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

[fa icon="comment"] 0 Comments posted in Harvard Business Review, CSRHub metrics, Top 100 CEOs

Harvard Business Review Best-Performing CEOs Ranking with CSRHub ESG Metrics

[fa icon="calendar'] Oct 23, 2018 8:54:39 AM / by CSRHub Blogging

Harvard Business Review (HBR) has published its annual global Harvard Business Review_CSRHubranking of the 100 best-performing CEOs, with Pablo Isla of the Spanish fashion retail giant Inditex topping the list for the second year in a row. Following behind Isla in the #2 and #3 spots are Jensen Huang of NVIDIA and Bernard Arnault of LVMH. They’re joined by newcomers to the top 5 this year, François-Henri Pinault of Kering (#4) and Elmar Degenhart of the German automaker Continental (#5). Salesforce CEO Marc Benioff has climbed to the #6 spot, up from #12 in 2017.

The list, which appears in HBR’s November-December issue, is different from other leader rankings in that it measures performance for the entire length of a chief executive’s tenure. “In a business environment that often seems obsessed with today’s stock price and this quarter’s numbers, our ranking takes the long view,” said HBR Editor in Chief Adi Ignatius.

Harvard Business Review’s article stated, “To compile the list, HBR looked at CEOs of the S&P Global 1200 as of April 30, 2018, and calculated overall shareholder return and increase in market capitalization over their entire tenure. It also factored in ratings of corporate environmental, social, and governance (ESG) performance provided by two firms, CSRHub and Sustainalytics. (Read more about the methodology.)” 

The HBR article stated “Among the biggest shifts companies face right now is in the global political environment….Whether and when CEOs speak out doesn’t factor directly into our rankings—but such activism may be captured indirectly in ESG scores, according to the experts at CSRHub and Sustainalytics, the firms that help us crunch the data. For instance, ESG ratings do account for company lobbying expenditures, the degree of disclosure on issues such as carbon use, and the presence of a sustainability officer at the company’s top level, among other measures. A CEO’s political statements (or lack thereof) may also show up in data gleaned from employee review sites such as Glassdoor. The phrase “CEO activism” connotes proactive behavior by leaders—but more and more often, dealing with political realities is just another facet of a multifaceted job.”

“We are honored to have CSRHub ESG (environment, social, governance) metrics included in the methodology to determine the HBR Ranking of the World’s Best-Performing CEOs for the third year in a row” said Cynthia Figge, CSRHub CEO and Co-founder.

See the full report available in Harvard Business Review Magazine, found here.  

To learn more about CSRHub, our ESG/CSR metrics or how you can improve your ESG scores, contact us here.

 


CSRHub is the largest ESG and sustainability rating and information platform globally. We aggregate 180M data points from 550 data sources including 12 leading ESG analyst databases. Our big data patented algorithm aggregates, normalizes, and weights data to rate 18,000 companies in 132 countries across 136 industries. We track 97% of world market capitalization. We cover 12 subcategories of ratings and rankings across the categories of environment, employees, community and governance. We show underlying data sources that contribute to each subcategory’s ratings. CSRHub metrics are a consensus view (any 2 sources may have about a 30% correlation so we make sense of the disparate data). We tag companies for their involvement in 17 Special Issues. We provide Macro-enabled Excel dashboard templates, customizable dashboards, and an API. Our big data technology enables 85% full coverage of data across our rated companies and robust analyses. We provide historical ratings back to 2008.

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

[fa icon="comment"] 0 Comments posted in Best Performing CEOs, Harvard Business Review, ESG Metrics

HBR’s Top 100 CEO’s List Used CSRHub ESG Metrics

[fa icon="calendar'] Oct 27, 2017 10:24:10 AM / by CSRHub Blogging

Harvard Business Logo.pngHarvard Business Review just released their much anticipated The Best-Performing CEOs in the World 2017 list. CSRHub is honored to have our ESG (environmental, social, and governance) metrics included again this year as part of the methodology for ranking the world’s top 100 CEOs. 

HBR wrote in its November 2017 article covering the ranking, “This year’s top performer—his first time in that spot—is Pablo Isla of Inditex… Measured on financial returns alone, Isla comes in 18th in our ranking; his company’s performance on environmental, social, and governance (ESG) factors, which count for 20% of a leader’s score, propelled him to the top spot.” 

“If we judged CEOs solely on the basis of financial performance—as we did prior to 2015—the top-ranked leader would be Amazon’s founder, Jeff Bezos, who topped the list in 2014 and has been the best financial performer in every subsequent year. Since 2015, when ESG ratings became a factor in our ranking, Bezos has climbed from #87 to #76 to #71.”

HBR describes its methodology to measure ESG. Using Sustainalytics and CSRHub to calculate the final CEO ranking, “we combined the overall financial ranking (weighted at 80%) and the two ESG rankings (weighted at 10% each), omitting CEOs who left office before June 30, 2017.” 

The HBR report shared, “Earlier this year Amir Amel-Zadeh of Oxford University’s Saïd Business School and George Serafeim of Harvard Business School published the results of a survey of 413 investment executives, whose firms collectively manage $31 trillion in assets. Half reported using ESG information because they believe it is material to investment performance, and nearly half said they believe that a company with a high ESG score is a less risky investment.” 

At CSRHub we are encouraged by the increase in ESG metrics moving more into the mainstream. We hope that our broad, deep, and transparent CSR/ESG metrics and information will make progressive corporate social responsibility a norm that sustains businesses, society and our planet. As a B Corporation, our mission is to offer a public, affordable, and standardized measure of company ESG (environment, social and governance) performance that empowers our users to improve corporate sustainability.

To learn more about CSRHub, our ESG/CSR metrics or how you can improve your ESG scores, contact us here.


CSRHub provides access to the world’s largest corporate social responsibility and sustainability ratings and information.  It covers over 17,500 companies from 135 industries in 133 countries. By aggregating and normalizing the information from 549 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 Harvard Business Review

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

HBR Publishes List of Best Performing CEOs in the World

[fa icon="calendar'] Oct 19, 2016 8:00:00 AM / by CSRHub Blogging

The Harvard Business Review released their ranking of the world’s 100 best performing Harvard Business ReviewCEOs, based on both financial and ESG (environment, social, governance) measures of the leaders’ entire time in office to highlight those executives that have established a lasting track record. CSRHub is proud to be one of the two research providers for this year’s list.

HBR wrote in its November 2016 article covering the ranking, “one persistent criticism of ESG data is that it can be subjective, and indeed, when you examine how various research organizations rank the same firm using ESG criteria, you’ll often find significant differences.  This year HBR used ratings from CSRHub, a firm that collects and aggregates ESG data to help companies better understand what they can do to improve. By incorporating two ESG components, we hope to increase our accuracy and reduce the odds that any company may unduly benefit from or be penalized by a single firm’s rating.” (For more details, see “How We Calculated the Rankings,” page 6.) “The revised approach, along with ups and downs in world stock markets, brought 33 new CEOs onto the list. At the same time, 30 CEOs have made the list for the third year in a row.”

See which leaders and companies made the top list here, https://hbr.org/2016/11/the-best-performing-ceos-in-the-world.

 

About CSRHub

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.

 
Contact: Cynthia Figge, COO and Cofounder, Cynthia@csrhub.com

 

Csrhub logo

 

 

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

[fa icon="comment"] 0 Comments posted in Best Performing CEOs, ESG, governance, Harvard Business Review, social, sustainability ratings, CSRHub, environment, CSR Rankings, HBR

Subscribe to Email Updates

Lists by Topic

see all

Posts by Topic

see all

Recent Posts