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

Green Bond Issuers Appear to Have Higher Than Average Perceived Sustainability Performance

[fa icon="calendar'] Oct 21, 2015 10:10:40 AM / by Bahar Gidwani

By Bahar Gidwani

 

Overview

The Green Bond concept was developed in 2007/2008 by the World Bank and Skandinaviska Enskilda Banken (SEB).  They created this fixed income product to respond to demand from investors who wanted to support projects that address climate change.  By 2010, almost $4 billion of green bonds were being issued by a variety of institutions such as the World Bank and the European Investment Bank.  Corporate borrowers began issuing Green Bonds in 2011, followed by municipalities and local governments.

Green bond issuance has exploded

https://www.climatebonds.net/market/history

The initial market for Green Bonds was with socially responsible investors (SRI), who seek to both earn a return and to generate a positive social impact.  The market’s growth has encouraged mainstream investors to participate—and has encouraged a wide array of corporate and governmental entities to initiate Green Bond-fundable projects.  With more than $36 billion of green bonds issued in 2014, they have become a distinct “asset class.”

Green Bond buyers may expect the entities who originate Green Bonds to have better social and sustainability behavior than entities who do not.  This study tests this assumption by examining the perceived social performance of a set of Thomson Reuters-tracked Green Bond issuers, using CSRHub data on perceived social responsibility performance.  We found data on the social performance for 83% of issuers on Thomson Reuters list.  Together they accounted for 99% of the $951 billion cumulative face value of the Green Bonds issued by the 90 distinct entities we reviewed for this study.

To see the full research report, download a complimentary copy here or below.

download report


About the Author

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. Bahar was recently interviewed on Brian Lehrer TV. He plays bridge, races sailboats, and is based in New York City.

About CSRHub

CSRHub provides access to the world’s largest corporate social responsibility and sustainability ratings and information.  It covers over 15,000 companies from 135 industries in 132 countries. By aggregating and normalizing the information from 400 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.

 

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[fa icon="comment"] 1 Comment posted in Bahar Gidwani, European Investment Bank, fixed income product, Skandinaviska Enskilda Banken (SEB), World Bank, Uncategorized, invest, socially responsible investors, sustainability performance, CSRHub, green bonds, SRI

A Link Between Stock Exchange Membership and CSR Performance

[fa icon="calendar'] Jun 1, 2015 3:42:44 PM / by Bahar Gidwani

By Bahar Gidwani

CSRHub recently examined corporate social responsibility (CSR) and sustainability rating data for the 18,991 companies in fourteen major stock exchanges.  Despite the fact that CSRHub includes 64 million pieces of data from more than 380 sources, there is enough data to rate only 17% of the companies on these exchanges.  For some exchanges, only 1% of their companies could be rated.  The NASDAQ had the highest percentage of rated companies, with data available on 57% of its companies.

The average perceived sustainability performance of the companies varied, across the fourteen exchanges.  Companies on exchanges that require sustainability reporting had higher average ratings than those that did not.  We expect sustainability reporting to increase dramatically over the next few years in all parts of the world, as both exchanges and exchange regulators mandate more disclosure of material non-financial information.  Even without mandated disclosure, we should be able soon to assess the sustainability performance of most public companies, just as we currently measure their credit score or brand value.

Relative Performance

CSRHub measures twelve different areas of sustainability performance across four main categories of interest: community, employee, environment and governance issues.  There is enough data to fully measure the performance of 2,427 of the companies we studied—13% of the total.  We used this data to give an overview of the performance of the companies by exchange, as compared to all 9,300 companies we track.

CSRHub CSR Stock Exchange Link

To see the full discussion including variations in coverage, the current and future international reporting requirements and future implications, download a full report here.


Bahar GidwaniBahar Gidwani  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. Bahar is a member of the SASB Advisory Board. He plays bridge, races sailboats, and is based in New York City.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 14,400+ companies from 135 industries in 127 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.

 

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CSRHub Simplifies Sustainability Benchmarking: An Interview with CSRHub Co-founder Cynthia Figge

[fa icon="calendar'] Nov 4, 2014 9:35:51 AM / by CSRHub Blogging

As previously seen in the WiznessBlog.

benchmarking

Wizness and CSRHub have joined forces to simplify sustainability benchmarking against Cynthia Figge, Co-founder and COO of CSRHubcompetitors. CSRHub co-founder Cynthia Figge answered questions about her company and how the new benchmarking product will benefit users.

Q: What is CSRHub’s goal and purpose?

A:  CSRHub aggregates information about corporate social performance into one place so companies and individuals can track sustainability worldwide. It’s the first easy way to discover how companies perform and compare on sustainability and CSR issues.

 

Q: What was the genesis of CSRHub?

A: My partner Bahar Gidwani and I founded CSRHub in 2007 to solve the CSR data problem. Back then, there were many often conflicting data sources – sound familiar? We were the first company to recognize that the growing body of CSR information would soon require a Big Data solution. We figured out how to combine the data into a single rating that incorporates an ever-growing number of sources. We started with the premier environment, social, governance, the ESG firms, also known as socially responsible investment or SRI — we aggregate nine now — and added data from 300 sources so far and counting, NGOs plus government agencies, social networking groups, indexes and publishers. Our proprietary tools combine more than 60 million pieces of data on sustainability and CSR performance into a consistent set of ratings.

Q: Who are CSRHub major ESG/SRI data sources?

A: Our sources include premier ESG organizations ASSET4 (Thomson Reuters), CDP (Carbon Disclosure Project), EIRIS, GovernanceMetrics International, IW Financial, MSCI (ESG Intangible Value Assessment and ESG Impact Monitor), RepRisk, Trucost and Vigeo.

Q: What is the CSRHub schema?

A: Our data schema lays it out in detail, but generally our ratings are based on four categories: Environment, Employees, Community, and Governance. Each category has three subcategories. For example, within the Environment category there are Environmental Policy and Reporting, Energy and Climate Change, Resource Management. For Employees, Diversity and Labor Rights, Compensation and Benefits, Training Health and Safety, and so on.

Q: How are people using CSRHub ratings?

A: The market uses us for six applications:

First, for benchmarking. Our ratings and analysis tool covers 9,296 companies across 135 industries to track competitors over time.

A lot of our users analyze performance by stakeholder for CSR and Sustainability Reports. We offer a, single powerful interface to over 348 sources of information.

Professors and students conduct academic research and projects. Our tool analyzes six years of data and over 60 million data points, and is currently used in hundreds of universities globally.

Sustainability is increasingly important to company brand. Companies use us to build authentic brand values and increase customer loyalty.

CSRHub is used to build a world-class sustainable supply chain. Our APIs can map into a company’s supply chain network across 106 countries.

Finally, we find that sustainability performance is increasingly a factor in economic decisions. People search for places to work, brands to buy, and partners to support based on their values.

Q: How does CSRHub enable comparisons between companies? Can we really integrate apples and oranges?

A: The CSRHub schema maps data elements from all these data sources into the twelve subcategories, then aggregates and normalizes the data for comparability. The schema isn’t unique, but the aggregation and normalizing absolutely is. Bahar and I together had the perfect skillset to attack this challenge. We met at Harvard Business School. I went on to cofound EKOS International, one of the first consultancies to integrate sustainability and corporate strategy, way back in 1996 if you can believe it. Bahar has a CFA and built and ran Web-based and technology-based businesses on Wall Street with Kidder, Peabody and for McKinsey.

Q: Why is knowing my CSRHub rating and ranking in my industry important?

A: Benchmarking is key to competing successfully and creating value. Knowing your CSRHub rating and ranking enables your company to gain an independent perspective about how well you perform compared to other companies, identify specific areas for improvement, and monitor company CSR performance over time. Integrating CSRHub benchmarking across divisions enables a company to prioritize improvements and provide greater transparency of progress.

Q: How will CSRHub and Wizness work together?

A: CSRHub and Wizness are collaborating to create a Benchmark Template Report available on the Wizness Publisher website. Our reports will be streamlined, digital, social and mobile solutions for key stakeholders interested in sustainability data and progress.

Q: When will this benchmarking tool be available?

A: An early preview of the report is available now in PDF form at the following address: https://publisher.wizness.com/csrhub

Photo courtesy of Wizness.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 9,200+ companies from 135 industries in 106 countries. By aggregating and normalizing the information from 348 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.

 

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[fa icon="comment"] 0 Comments posted in Big Data solution, community, Compensation and Benefits, CSR, CSRHub schema, Cynthia Figge, Diversity and Labor Rights, EIRIS, Energy and Climate Change, Environmental Policy and Reporting, ESG, governance, GovernanceMetrics International, sustainability benchmarking, Wizness, RepRisk, Uncategorized, IW Financial, MSCI, NGO, Resource Management, Trucost, Vigeo, CDP, employees, environment, SRI, Thomson Reuters, Training Health and Safety

A Big Data Approach to Gathering CSR Data

[fa icon="calendar'] Oct 28, 2014 9:19:20 AM / by Bahar Gidwani

The following is part 2 of a 3-part series on “Big Data.”

By Bahar Gidwani

We have previously defined “Big Data” and shown how we feel a Big Data system built by CSRHub could help address some problems that exist in collecting corporate social responsibility (CSR) and sustainability data on companies.  We have also further described the problems with the currently dominant method of gathering this data—an analyst-based method.

CSRHub uses input from investor-driven sources (known as “ESG” for Environment, Social, and Governance or “SRI” for Socially Responsible Investment), non-governmental organizations, government organizations, and “crowd sources” to construct a 360 degree view of a company’s sustainability performance.

The illustration below shows the steps in our process.

CSRHub Ratings

The steps are:

  •  Convert measurement from each data source into a 0 (low) to 100 (high) scales.  This  requires understanding how each source evaluates company performance.
  •  We next connect each rating element with one or more of our twelve subcategory  ratings.  (Some elements may also map partially or exclusively to special issues such as  animal testing, fracking, or nuclear power.)
  •  We compare each source’s ratings with those for all other sources.  Each company we  study gives us more opportunities to compare one source’s ratings with another.  The  total number of comparisons possible is very large and growing, exponentially.  We  use the results of our comparison to adjust the distribution of scores for each rating  source so that they fall into a “beta” distribution that has a central peak around 50.
  •  Some sources match up well with all of our other data.  Some sources don’t line up.  We add weight to those who match well but continue to “count” those who don’t.

We then repeat steps A to D as many times until we have found a “best fit” for the available data.  Each time we add a new source, we go through an initial mapping, normalization, and weighting process.

An Example

It may help explain our data analysis process by using a specific example.  Hewlett Packard is a heavily tracked company.  We have 154 sources of data for this company that together provide 17,571 individual data elements.  Only 62 of these data sources provided data for our July 1, 2014 rating—the rest of the data sources provided data for previous periods (our data set goes back to 2008).  The 62 current data sources provided 575 different types of rating elements and a total of 610 different ratings values that do not affect/apply to special issues.

After their conversion to our 0 to 100 scale, we map the rating elements into our twelve subcategories.  We now have 1,403 ratings factors.  We selected our subcategories to allow an even spread of data across them. You can see that we have a reasonably even spread for Hewlett Packard:

CSRHub Category

Number of Data Elements

Board

95

Community Dev & Philanthropy

78

Compensation & Benefits

63

Diversity & Labor Rights

95

Energy & Climate Change

149

Environment Policy & Reporting

154

Human Rights & Supply Chain

77

Leadership Ethics

205

Product

93

Resource Management

156

Training, Health & Safety

48

Transparency & Reporting

190

Total

1,403

Before we can present a rating, we need to check first that we have enough sources and enough “weight” from the sources we have, to generate a good score.  In general, we require at least two sources that have good strength or three or four weaker ones, before we offer a rating.  As you can see, we have plenty of sources to rate a big company such as HP.

CSRHub subcategory sources

Even after normalization, the curve of ratings for any one subcategory may have a lot of irregularities.  However, we have enough data to provide a good estimate of the midpoint of the available data, for those ratings we report.  Below you can see that some sources have a high opinion of HP’s board while others have a less favorable view.  The result is a blended score that averages to less than the more uniform Leadership Ethics rating.

CSRHub subcategory rating variations


The overall effect of our process is to smooth out the ratings input and make them more consistent.  As you can see in the illustration below, the final ratings distribution is organized well around a central peak.  The average overall rating of 64 is below the peak, which is around 80.  The original average rating was 61.

analysis charts part 2

By making a few assumptions about how the errors in data are distributed, one can assess the accuracy of ratings.  In a previous post, we showed that CSRHub’s overall rating accurately represents the values that underlie it to within 1.8 points at a 95% confidence interval.

In our next post, we will discuss the benefits and drawback of using this complex and data intensive approach to measuring company CSR performance.

See part 1, Using “Big Data” to Rate Corporate Social Responsibility: One Company’s Approach.


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. Bahar is a member of the SASB Advisory Board.  He plays bridge, races sailboats, and is based in New York City.

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 9,200+ companies from 135 industries in 106 countries. By aggregating and normalizing the information from 348 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.

 

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How to Cope With Survey Fatigue?

[fa icon="calendar'] Aug 19, 2014 9:00:11 AM / by CSRHub Blogging

CSRHUB-Logo

Will responding to 200 questionnaires per year get your company a good sustainability rating?

 

Large companies get asked for sustainability information from hundreds of different groups. Wall Street research houses, mutual fund groups, “engagement-oriented” investors, stock exchanges, government regulators, not-for-profit groups, community organizations, consumer researchers, major customers (via supply chain questionnaires), activists, and academics each ask for data. These groups do not harmonize their requests, use common definitions for the terms they use, or work on the same schedule.

Join CSRHub Co-founder and CEO, Bahar Gidwani and notable CSR leaders for the next CRA-sponsored webinar event as they discuss the following issues:

  • Does not responding to some or all of the questions asked, affect how a company is perceived?
  • Which groups should a company respond to and which can it safely ignore?
  • How can a company get maximum value out of the ratings and input it receives from those to whom it chooses to report?

Panelists include:

Bahar Gidwani, Co-founder and CEO, CSRHub
Niki King, Senior Manager CSR Program Office, Campbell Soup Company
Maia Kutner, Director, Technical Reporting, CDP
Benoit Terpereau, Product Manager, Enablon/Wizness

How to Cope With Survey Fatigue?
Wednesday, September 10, 2014 | 12:00PM - 1:00PM EDT

Free webinar

Corporate Responsibility Association

Register today! This is a free webinar, and space fills up quickly.

See the complete CRA webinar series to watch previous webinars and review upcoming webinars.


CSRHub provides access to corporate social responsibility and sustainability ratings and information on 8,900+ companies from 135 industries in 102 countries. By aggregating and normalizing the information from 325 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.

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