Sustainable Brands took a bold step forward this year. With the support of members and our advisory board, we launched the SB Voyager Program creating an even more inclusive community. It enables companies that have a publicly stated commitment to transform controversial business models for the better to actively engage with SB Corporate Members in regular meetings and online.
Since then, we’ve been working with key research and evaluation partners to widely examine corporate ESG (environment, social and governance) reputation and performance data. Our goal is to set a minimum threshold for Corporate Membership and recommend the Voyager program for any brands that have yet to meet it. One key partner helping us to power this analysis is CSRHub. It’s been a pleasure working with them and a revelation to see how much value this tool can provide Corporate Members beyond this project.
In this interview, we speak with Cynthia Figge, CEO and co-founder of CSRHub. She shares why CSRHub was founded, how it helps brands unveil major opportunities to improve perception of ESG performance, how SB Corporate Members fare versus other organizations, and an exclusive offer.
SB: Hi, Cynthia. What's your background? Cynthia: I studied Economics and went on to Harvard Business School. My objective in life differed from those of my classmates. I dreamed of helping business be an agent of environmental prosperity and social change and justice.
After graduating, I was fortunate to start up a greenfield mill with Weyerhaeuser, help 25 nonprofits form for-profit subsidiaries in New York, and develop new wireless ventures at McCaw Cellular. However, it was in 1996, when I cofounded EKOS International—one of the early sustainability consulting firms, that I was able to pursue my interest in integrating business and ESG thinking.
After 10 years working with a number of major companies including Coca Cola, BNSF and REI, I recognized the need for a broad, consistent measure of corporate sustainability performance. In 2007, I recruited a friend from Harvard, Bahar Gidwani, and started CSRHub to create this type of measure.
Bahar had previously founded Index Stock Imagery, the world’s first electronic photo repository. He pioneered several of the technologies required to categorize and distribute large, disparate data sets, so he was comfortable dealing with the complexities of ESG data. We believed that CSRHub could be an attractive commercial opportunity and a means for improving corporate sustainability. Therefore, we committed to making the company a B Corp—a “benefits” corporation that has both a profit-driven and a social impact mission.
SB: For those who have yet to discover it, what is CSRHub?
Cynthia: CSRHub provides consensus ESG ratings to help companies benchmark their performance, study their supply chains, and improve their reporting. There are hundreds of groups out there that rate various aspects of corporate sustainability performance. CSRHub has aggregated over 600 of these sources and more than 6,000 different types of sustainability measurements into a simple, powerfully comparable set of consensus ratings.
While other ratings systems assess only a few hundred to several thousand companies and have huge amounts of unknown or estimated data elements, CSRHub covers 32,000 entities worldwide and offers complete ratings on more than 8,500 companies—97 percent of world market capitalization. Because we started aggregating leading sources of ESG data in 2008, we now have over 10 years of monthly data history.
SB: Why did you feel there was a need for it?
Cynthia: Companies lack tools for benchmarking their ESG performance across various stakeholders (e.g., investors, analysts, nonprofits, government agencies, crowd-based sources etc.). That creates a real challenge, because ESG data and ratings are used by so many of them to make critical decisions involving your business.
For instance, ESG data and ratings are used by investors to determine company risk, opportunity and value, by managers and analysts for business improvement and investment decisions, by professors and graduate students for research and discovery, by app developers to guide consumers for shopping and other economic decisions, and more. However, all of the ESG ratings systems out there tend to yield disparate and conflicting views of company performance, making them hard to use for decision making and improvement. That’s where CSRHub steps in.
SB: How does CSRHub help companies and stakeholders make sense of all this data?
Cynthia: Rather than pushing a particular view of what is “good” or “bad” about a company’s sustainability performance, CSRHub provides a consensus opinion. We normalize the ratings so they can be compared across industries and geographies. Users of CSRHub’s system can then contrast their own views or those of other data providers against a stable, consistent consensus view and look for systematic misperceptions and biases.
Each CSRHub user can create a profile that expresses his or her own “weight” for each area of ESG. We also enable users to adjust ratings for special issues such as the use of animal testing; the presence of GMOs in an entity’s products; involvement with regimes such as Iran or Burma and participation in coal or nuclear power. Each user’s ratings can be uniquely tailored—making them a reflection of the world he or she would like to see.
We also provide companies with an excellent opportunity to understand how they are being perceived by different ESG rating sources and how to prioritize efforts to improve reporting. Through a quadrant approach, CSRHub assesses which focus areas carry the most weight and which rating sources are most influential. As a result, you’ll know which areas to focus on and fix and which you can save for later.
SB: When you look at SB Corporate Members as a whole, what stands out to you?
Working with Sustainable Brands, we have benchmarked the Corporate Members as a group and found that this group of companies are sustainability leaders.
CSRHub’s average overall score across all fully rated companies worldwide is about 50 (on scale of 0 to 100). The curve of ratings has a strong central tendency like a bell curve, so not many companies score below 40 or above 70. The average score for the SB Corporate Members is 59! While this is not an A+, this score translates into an average percentile ranking of 82 percent—a strong A-.
SB: If a Corporate Member wanted to try CSRHub, how would they do it?
Cynthia: CSRHub is licensed as an annual subscription. We offer a money-back guarantee of satisfaction with our product. Through the end of 2019, we’re also offering SB Corporate Members an exclusive discount—20 percent off our Professional Annual Subscription, normally priced at $4,995. Members can feel free to reach me at cyn[email protected] to learn more.
We believe that companies are under increasing pressure to disclose their metrics, improve their performance, and tell their story in ways that meet the needs of a diverse set of stakeholders. We have built a virtuous circle feedback loop for business intelligence and improvement. We have enjoyed collaborating with SB Corporate Members and look forward to continuing to support their journey towards a more sustainable future.