Are Companies Really Striding Forward On Climate Change?

By Bahar Gidwani

Climate Counts recently released its fifth update of its well-known Climate Scorecard.  In the report that accompanied the release, Mike Bellamente, the new director of Climate Counts, pointed out that 79 of the 136 rated companies had scores that showed they were “striding” towards improving their climate performance.

It was good to hear this encouraging news.  We at CSRHUB would like to believe that companies are making progress towards helping us all avoid further climate change.  In a prior post, we pointed out that our CSRHUB environment category ratings correlate well with Climate Count’s scores.  We thought we’d take a retrospective look and see if our systems concur about the direction and degree of change over time in company performance.

CSRHUB recently added a feature that allows its subscribers to see historic ratings data.  All subscribers can see a graph of a company’s ratings changes.  A professional subscriber ($50 per month) can actually roll back a company’s score, month-by-month, to the date we launched in 2010.  They can also compare any company’s score to those of its peers, on this monthly basis.

Using this new feature, we were able to get year-ago scores for 112 of the companies that Climate Counts rated in both 2010 and 2011.  As you can see below, our two systems have a somewhat different view of how company performance has changed over the past year.  The average change for CSRHUB’s environment score is higher (up 22%) than for Climate Counts (up only 12%).  But, Climate Counts has more companies with positive changes (85 vs. 67) and a sharper peak in the distribution of changes. 

CSRHUB and Climate Counts appear to disagree somewhat on the direction of change, for many companies.  As you can see below, we both believe companies are improving about 40% of the time and we both agree they are falling back about 10% of the time.  For the other half of the companies we studied, we have different views on whether or not they made progress over the past year.

We are not discouraged by this disagreement in direction.  Climate Counts is new data—CSRHUB’s score is based on everything available until this point, from everyone we could find (we now have 7.5 million data points in our system from 135 sources).  We trust that the careful analysis of the team at Climate Counts accurately portrays where the CSRHUB scores for these companies will head, over the next three to six months.  We expect our scores to continue to remain highly correlated with those from Climate Counts, as Climate Counts continues to probe and explore for new information and perspective on corporate climate change behavior.

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 is a corporate social responsibility (CSR) ratings tool that allows managers, consultants, academics and activists to track the sustainability performance of major companies. We aggregate data from more than 125 sources including seven leading socially responsible investing (SRI) analysts, Carbon Disclosure Project, indexes, NGOs, crowd sources, and government agencies to provide our users with a comprehensive source of employee, environmental, community, and governance information on nearly 5,000 publicly traded companies in 65 countries. CSRHUB is a B Corporation.

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