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

CSRHUB Co-Founder and COO, Cynthia Figge, sat down recently with Zecca Lehn of environmental consulting firm West-to-West, to discuss the inspiration behind CSRHUB, its data sourcing and capabilities, business' changing priorities, and why companies with progressive CSR strategies actually have a competitive advantage.

The interview was the first in a series of podcasts that Lehn, West-to-West's Co-Founding Manager, plans to produce about bridging sustainability and technology.

Listen to the full interview.

Friday November 26th was “Buy Nothing Day”, an International Day of protest against consumerism led by Adbusters magazine, which describes it as, “[a] sudden unexpected moment of truth, a mass reversal of perspective, a global mindshift – from which the corporate/consumerist forces never fully recover.”

In spite of the organizer’s claims that it is “sudden” and “unexpected,” Buy Nothing Day was, in fact, scheduled to coincide with “Black Friday”— the Friday after Thanksgiving traditionally set to kick off the Christmas shopping season and perhaps, this year especially, save the economy from its doldrums. I daresay that the winner this year was Black Friday, since presumably most readers haven’t even heard of Buy Nothing Day and, anecdotally at least, people were buying. A friend on Facebook reported on a “Black Friday Traffic Jam” from the Hudson Valley:

“Last night taking late bus back from NYC after splendid day with sons and their friends and wonderful meal, the traffic was backed up 5 miles in every direction from Woodbury Commons trying to get to their midnight to midnight Black Friday sales... it was unbelievable. Talk about shop till you drop. Visa and Master Card are raking it in in the Northeast today.”

Although CSRHUB’s founders believe that business must be part of the solution, CSRHUB is more aligned with the forces of Buy Nothing Day than with Black Friday. As stated on CSRHUB’s “About Us’ page, the CSRHUB founders believe that business can be:

“an agent of positive social change. We believe that providing these corporate [ratings on environmental, social and governance performance] will increase the transparency . . . and encourage critical discussions of how companies treat their employees, impact the environment, adjust their carbon footprint, act in their community, provide innovative products and services for sustainable development, and govern themselves.”

But can businesses actually be a source of public good, and not just for today but for Seven Generations? Clearly, since the start of the Industrial Revolution, business has helped feed, employ and raise the living standards of billions of people.  But what good is this to our children and grandchildren if we have created ever increasing dead zones in our seas (405 dead zones worldwide, the largest 27,000 sq. miles), an ever increasing ozone hole in our skies (resulting in increasing ultraviolet radiation), widespread species extinction (according to a report published in Nature, 15-37% of known plant and animal species will be extinct by 2050 from climate change alone), and we are heading toward a literal climate meltdown?

If overconsumption is a problem, how can businesses -- generally motivated to maximize sales and profits -- solve that problem?  How can business be remade to be Triple Bottom Line – not just for profits, but for people and planet also?

One solution is to encourage companies to produce less or to manufacture products that have a social good, through tax and other incentives,.  Since corporations are individually chartered by the state, it’s possible to create a new type of corporate entity -- a “benefit corporation” -- that is highly protective of the environment, its employees and society in general, and to provide tax and other benefits to such entities.  One major step in this direction is the B Corporation movement, which requires B Corporations to: 1) achieve a passing score on the B Ratings System, a comprehensive tool to assess a company’s social and environmental performance; and 2) agree to legally expand the responsibilities of the corporation to include the interests of its employees, suppliers, consumers, community, and environment. So far there are 327 B Corporations with $1.6 billion in revenues in 54 industries (including CSRHUB which was recently approved).  And, indeed, earlier this year, two states, Maryland and Vermont, passed legislation actually codifying and making it possible for businesses to be chartered as “benefit corporations.”

Another possibility is to create mechanisms for businesses to make more money by selling less. Although this isn’t currently practical for most businesses, it is possible and is being done in regulated businesses.  In the electric utility business, for example, state public services commissions have decoupled profits from sales, and created a mechanism for utilities to make more money by selling less by utilizing efficiency and conservation methods.

CSRHUB seeks to solve this problem by “rewarding” businesses that perform well on environment, social and governance issues with good ratings.  CSRHUB Users, for example, can see which companies perform best on environmental issues and can make decisions about what to buy, who to work for, and who to do business with based upon those ratings.  CSRHUB also uses tags to allow users to identify companies that are involved in a wide range of behaviors such as coal production, nuclear power or pesticides and pollutants, or that have been rewarded for being one of the “100 Low Carbon Pioneers”, a member of the “Carbon Disclosure Project,” or an EPA Climate Leader.

So far, these are all small steps.  But for those of us who have been part of and watching this movement for numerous years, they are important ones that are starting to snowball and create new consciousness. CSRHUB is proud to part of this new ecology.

Stephen Filler is a CSRHUB Cofounder and Advisor. An intellectual property attorney, he is the Director of Business Development for Prism Solar Technologies, Inc., a solar photovoltaic module manufacturer. He has provided legal services to and served on the boards of sustainable, environmental and renewable energy businesses, technology and media companies, non-profit organizations and trade associations. Stephen serves on the Boards of NY Sloop Clearwater, NY Solar Energy Association, Sustainable Hudson Valley Business Network. He received his JD from Boston University Law School.

After two years of hard work, we launched CSRHUB's alpha site this week.  There are pages on the site that talk about us, about our data sources, and about how we build our database and set up our "schema."

However, these pages probably don't give you a sense of what we want to accomplish.  Here are some things we don't and do want to do:

• We don't believe anyone can create "absolute" rankings for the companies we cover.  Instead, we believe that the relative performance of companies depends on the personal views of our users.
• We don't think that a single source or criteria should be used to evaluate how a company performs socially.  Instead, by combining multiple sources and ratings on twelve different subcategories, we can fairly compare a broad range of companies.
• We know that different countries have different standards for corporate social and sustainability behavior.  However, we feel it is fair to compare companies from different countries--as long as we use the same criteria and aggregation methods.
• Some people may try to use our data to make personal or even professional investment decisions.  We don't encourage this--our data concerns social behavior, not financial performance.  There are studies that show that strong social performance leads to good financial performance.  However, to take advantage of this connection, an investor needs comparative valuation information and other financial data that we do not supply.
• We are not qualified journalists or a source of news.  Instead, we provide "transparency."  We make it easier for those who want to study company performance.
• We do not help people choose which product to buy.  Most products contain components from a long supply chain of companies.  We can help identify which companies in this chain may have social values that conflict with those of our users.  But, there are many other factors we cannot yet quantify and accurately track. 

NYU Professor Jay Rosen recently pointed out that new on-line sources of information could "make the opaque world of power more transparent."  We like the idea that we can help offset the power of corporations and their ability to command attention from media and investors, with a transparent, easy-to-use information hub.  We will be adding features, company coverage, and new data sources over the next few months.  We hope you will tell us more about what you would like us to do and what you feel we should not try to do, as we move forward, together.