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

Who is the (your) top company for CSR?

[fa icon="calendar'] Nov 8, 2010 7:42:21 AM / by Bahar Gidwani

When people find out I am involved in a site that tracks Corporate Social Responsibility (CSR) ratings, their first question is generally, “Who is the top company in CSR?”  When I answer, “Which company ranks highest depends on your perspective,” they generally roll their eyes and decide that I am “weaseling out.”

However, I believe that CSR and sustainability measurement cannot be done without an understanding of the bias of the person who is doing the measurement.  People talk a lot about “transparency,” as it applies to companies telling us about their behavior.  I believe we need just as much transparency about our personal standards and viewpoint.

To give an example, a user who has a strong bias towards environmental performance (good climate change behavior, low resource management, good reporting and tracking, etc.) could have these five top companies:

Company Overall Rating
Hewlett-Packard Company (HP) 71
International Business Machines Corporation (IBM) 69
Cisco Systems, Inc. 68
Southwest Gas Corporation 67
Intel Corporation 66

(To see this type of list, go to our site and select the “Eco-oriented default” profile in the “Switch to a different profile” pull down menu.  Then do a geography = North America + USA search.)

If instead you value most how a company performed on community issues (e.g., supply chain issues, product safety and quality, philanthropy and community development) your top five would look like this:

Company Overall Rating
Hewlett-Packard Company (HP) 70
International Business Machines Corporation (IBM) 69
Cisco Systems, Inc. 68
Shore Bancshares, Inc. 68
Federal Agricultural Mortgage Corporation 68

(For this perspective, switch to the Community-default profile.  All your search settings should be saved and you will see the new numbers.)

Each of these perspectives is reasonable—they just focus on different things.  The rank order shifts as you change perspective.  Companies that are not on the top five for either list are necessarily worse than the top five—they may instead have a different philosophy or emphasis in their social performance agenda.

The situation gets more complicated (and our system gets more sophisticated) when you use a profile from an individual user.  For instance, my public profile (you can search for it and find it via the profiles search page under My CSRHUB as “Bahar View”) shows that I value governance more than community and labor treatment a bit more than environment.  It also shows that I have fairly strong views on social issues such as involvement in the military, nuclear power, animal testing, the Tea Party and NRA boycott lists, how working women are treated, involvement in Burma, and Gay and Lesbian rights.  These special issue settings affect my personalized ratings—as they should—and create a “me-centric” view of CSR.

Company Overall Rating
Intel Corporation 66
Charlotte Russe 65
drugstore.com, Inc. 65
Limelight Networks, Inc. 65
Pinnacle Financial Partners, Inc. 65

Note that only one of these five companies were on either of the other two lists!  When you use our system create your own profile (you need to register first, but that is free), you get to see who your top five companies are.  You also get a new form of transparency and an easy way to exchange and compare your views with others.  After all, we may not all agree on what is “right,” but we should at least know why our viewpoints differ!

Other people have suggested or offered personalization systems such as the one CSRHUB provides.  However, as far as I know, ours is the first that is publicly available to anyone who wants to use it.  Register, create a profile, and see the world with your own particular lens color and prescription!  Then, when someone asks you who the top five companies are, give them what I believe is the right answer—tell them which companies match your personal social performance profile.

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[fa icon="comment"] 0 Comments posted in Bahar Gidwani, bias, corporate social responsibility, CSR, Uncategorized, leaders, personalization, top ten, transparency, me-centric, my view, top five, personal values, relative values, social values, top rated

Transparency and the Mega Trend

[fa icon="calendar'] Apr 30, 2010 5:41:16 PM / by Cynthia Figge

By Cynthia Figge

A recent article in the Harvard Business Review by David Lubin and Daniel Esty should bring cheer to anyone who has been concerned about how slowly corporations seem to be adopting sustainability strategies.  The article titled “The Sustainability Imperative” argues persuasively that incorporating sustainability practices into corporate behavior is a “mega trend”.

A section titled “Reporting and communication” made me especially happy.  The authors say, “Developing metrics that allow companies to measure benefits and understand costs is essential to adapting and refining their strategy, as well as communicating results.”  Companies need an external measure of their sustainability progress —and they need benchmarks that compare them to their competitors, so they know how much further they need to go.  We have spent two years developing a measurement instrument we call CSRHUB—a tool we hope can provide this type of broad and uniform metric.

The authors go on to point out something I and my partners at EKOS International have seen in many of the companies we have worked with.  “When the assessments were based only on publicly available information and a company’s external reporting, we got scores that were almost always lower, and often significantly so, than scores developed in consultation with the company and with full inside information.”  In other words, many companies may be doing better on sustainability issues—and on their corporate social responsibility performance in general—than is publicly known.

For example, if you look at the default ratings on the CSRHUB site for Wal-mart and Costco, you will find Wal-mart gets a score of 56 and Costco gets a 48 (on a scale of 0 to 100).  As a Costco customer I hope that this difference may be overstated, but it’s difficult to know. Some of the difference our sources perceive between these two companies may be driven by their varying policies of disclosure. One explanation for the rating difference is that it’s the penalty for lack of transparency.   Costco is followed by fewer data sources:  Only twelve sources report on Costco compared to seventeen for Wal-mart. Wal-mart has expanded its website coverage of CSR, while Costco has only recently published a first report on sustainability.

If you are a subscriber to our system, you can see more of the picture.  Subscribers will see that Costco gets a 39 on its corporate transparency and reporting compared to 52 for Wal-mart, and 45 on its environmental policy and reporting compared to 63 for Wal-mart.  In contrast, we show closer ratings for a more fundamental element—environmental resource management (Costco gets a 51 rating while Wal-mart gets a 59).

I hope more companies come to understand both points this HBR article makes regarding communication. First, companies need to develop metrics that enable them to track their own progress.  Second, companies should contribute to the metric-forming process by revealing their policies and practices.  Doing both will strengthen transparency, and give good-performing companies credit where due for the improvements they have made, and hopefully serve as a catalyst to “manage sustainability as a business megatrend”.

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[fa icon="comment"] 4 Comments posted in benchmarks, comparison, competition, corporate social responsibility, Costco, CSR, CSRHUB opinion, Cynthia Figge, Harvard Business Review, megatrend, sustainability, transparency, social performance, Wal-Mart, corporate communications, environment, measurement, metrics

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