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

CSRHub CTO and Co-Founder, Bahar Gidwani, will be speaking at the 2020 BattleFin Ensemble & Discovery Days event. The conference will take place virtually September 29th - 30th, 2020.  

BattleFin's panel lineup is broad and current, including discussions on the recovery of the travel industry, tech and consumer stock insights, macroeconomic trends, and even a panel focusing on the current election. 

The two-day conference aims to use alternative data insights to predict some of the changing impacts Covid-19 will have on Q3 earnings.

Bahar will take part in a roundtable discussion on the Institutional Investor's Perspective sponsored by AWS on Tuesday at 11:35am ET alongside executives from:

• Sentieo - Financial Research for a Market Edge
• American Century Investments - Leading Asset Management Firm
• Worldwide World Pensions Council - The Asset Owners' Think Tank

For the full agenda, a complete list of speakers, and the opportunity to register, click here.

Bahar Gidwani has built and run large technology-based businesses for many years. Bahar holds a CFA (Chartered Financial Analyst) and was one of the first people to receive the FSA (Fundamentals of Sustainability Accounting) designation from SASB. Bahar worked on Wall Street with Kidder, Peabody, and with McKinsey & Co. He has founded several technology-based companies and is a co-founder of CSRHub, the world’s broadest source of corporate social responsibility information. 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 offers one of the world’s broadest and most consistent set of Environment, Social, and Governance (ESG) ratings, covering 20,000 companies. Its 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. For more information, visit www.CSRHub.com. CSRHub is a B Corporation.

 By Bahar Gidwani

As a CFA (Chartered Financial Analyst) and past denizen of Wall Street, I am always interested to see studies that relate data or trends to the performance of a group of stocks.  The SRI (Socially Responsible Investment) industry has been producing some interesting work in this area, recently.

For instance, our data was used as part of a study by Governance & Accountability on the relationship between sustainability and stock performance for the S&P 500.  Our friends at GovernanceMetrics put out a study that showed a connection between the Accounting and Governance Risk (AGR) data and default in the CDS market (11 times more likely for companies in the bottom decile vs the top decile).  And, our friends at Trucost have just released an extensive report on the State of Green Business (co-produced with GreenBiz).

Now MSCI’s research group has published a fascinating study that inspects three commonly-used strategies for integrating ESG (Environment, Social, and Governance) factors into portfolio management:

• “ESG exclusion” describes a process that strips out “bad” stocks and overweights a portfolio with the top rated companies among the “good” stocks.
• “Simple ESG tilt” underweights “bad” stocks and overweights “good” stocks.
• “ESG Momentum” focuses on stocks that are showing changes in their sustainability performance.  It overweights companies that are improving and underweights those that are lagging behind.

If you want to see the details of MSCI’s analysis of these strategies, you should download their report.  I was surprised to learn that the momentum strategy dominated the other two over the four year horizon of the study.  It was also reassuring to see that all three ESG strategies produced active return benefits.

MSCI will host a webinar on March 21, where they will discuss their results.  You can register for it, here.  Please send me other interesting ideas in this area, and help me stay up to date on the latest development in SRI and ESG.

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 7,000 companies from 135 industries in 82 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.