Giving People Time to Give Thanks

By Carol Pierson Holding
 

Amidst the national stories about the recent take-over of the U.S. Senate by RepublicansThanksgiving and their ardent intentions to eviscerate both the environment (see Big Oil’s Wish List) and human rights (as in reproductive rights, minimum wage and so on), a bit of sunshine peaked out of my Seattle Times: two of our top chain retailers, Costco and Nordstrom, are opting to stay closed on Thanksgiving Day.

 

Why? To respond to the public backlash, of course, but also to ensure their employees spend Thanksgiving the way it’s supposed to be spent, with family and friends.

 

Closing on Thanksgiving isn’t the only way these companies are good to their employees. They lead Forbes 2014 Best Retail Companies to Work for Right Now list, with Costco at #1 and Nordstrom Rack at #2. Both companies not only have family-friendly policies, they pay their employees better.

 

In 2011, Nordstrom paid 60% more in hourly wages than the industry average. A typical Costco worker earned $45,000 in 2011 according to a survey by Glassdoor, compared to Sam’s Club workers’ average annual salary of $17,486.

 

Certainly, there is a strong economic argument to be made for treating employees better. Frederick F. Reichheld’s 2001 study The Loyalty Effect proved that customers are loyal not so much to a store as to its employees. Reichheld maintained that a five percent increase in the employee retention rate can increase a customer’s lifetime value by as much as 75%, in part because of the high cost of bringing in new customers. It seems to be working: as reported in Huffington Post last year, Costco’s profits soared 19 percent even as the retailer paid substantially higher wages. Nordstrom Rack’s sales increased 10.2%.
 
It’s clear that employees and economics benefit from Costco and Nordstrom’s decent treatment of employees. But closing on Thanksgiving could actively hurt consumerism, possibly over the long-term: once stores close down for one day, aren’t these retailers in danger of teaching their customers how not to shop, especially in their stores?

 

I was struck once again at the differences between the Pacific Northwest and the rest of the country. Certainly, chains headquartered in other places are also closed on Thanksgiving. Barnes & Noble, GameStop, Joanne Fabric, Pier 1, Marshalls, TJ Maxx and Top 10 retailers Burlington (projected to be #6 in profits for 2014) and Dillards (#2) are joining in.
 
But you have to wonder why any retailer would want to take an action to stem consumerism, their very life-blood, and why two of the chains closing for Thanksgiving would be headquartered in the Seattle area?

 

One clue is its politics. Washington State’s Governor Jay Inslee is best known as the “greenest governor.” But he is also a crusader for worker’s rights. He calls it “protecting our most vulnerable, and protecting our environment” and champions raising the State’s minimum wage even higher than it already is, which at $9.32 is the highest state-wide minimum wage in the country. Seattle’s city council voted this June to gradually raise its hourly minimum to $15.

 

This might seem counterintuitive. The party line, especially in red states, is that environmental protection and jobs are in a heated battle for resources. Yet the Pacific Northwest is growing economically even while it fights against fossil fuel consumption, closing coal plants, denying coal port permits, increasing investment in renewables and reducing energy use.

 

And the dogma that lifting wages will bankrupt businesses? Nordstrom’s and Costco wouldn’t agree.

 

Have a lovely shopping-free Thanksgiving!

 

 

Photo courtesy of ilovebutter via Flickr cc.

 


 

Carol Pierson HoldingCarol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council’s Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 9,300+ companies worldwide. Carol holds degrees from Smith College and Harvard University.

 

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 9,300+ companies from 135 industries in 106 countries. By aggregating and normalizing the information from 343 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.
 

Tagged , , , , , , , , , , , ,

Will SASB succeed in putting nonfinancial reporting on the map?

As previously seen on GreenBiz.com

 

By Bahar Gidwani

 

ShutterstockHurst Photo

 

This is the second in a two-part series about the use of SASB standards as a safe legal harbor for U.S. public companies.

 

The Sustainability Accounting Standards Board is more than halfway through its initial standards setting process. It has received American National Standards Institute accreditation as a standards-setting body. It boasts big names on its board and has created a “social norm” that will encourage many publicly traded U.S. companies to consider its guidance when making disclosure decisions.

 

So, what happens next? Will SASB succeed in building a safe harbor for nonfinancial disclosure? If so, what will this mean to the rest of the metrics area?

 

There are two ways for SASB to succeed. First, if a modest fraction — 10 percent to 20 percent of the country’s roughly 30,000 public companies — start conforming to the SASB standard, its issues will become de facto standards.

 

For example, both GRI and CDP remain below this level, with fewer than 1,000 companies reporting under either system over the past three years. Based on the number of companies that have participated in its working groups and the number of times its standards have been downloaded (3,800 times), SASB could be adopted by more than 3,000 companies over the next three years.

 

 

Second, a shareholder might file a lawsuit against a major company over the accuracy or quality of its nonfinancial reporting. The company could claim that it conformed to SASB standards and therefore should not be blamed for any omissions or deviations, or the plaintiffs could win because a company failed to follow SASB.

 

Should both events occur, SASB’s victory could mean good news long-term for sustainability metrics.

 

The long view on metrics

Investors, for example, will get better quality data. Investors have supported SASB because they want uniform, well-described sets of data across all companies within an industry. These data sets could appeal to mainstream investors who had not previously incorporated sustainability factors into decision-making. Note that investors who already include sustainability in their thinking may find it harder to get an edge over competitors.

 

Another plus: Metrics suppliers that rely on assessments by human analysts should continue to be in demand. For instance, environment, social and governance research firms, such as MSCI, Thomson Reuters, EIRIS, Vigeo and Trucost, should be able to dig out facts and form opinions that go beyond what companies report under SASB.

 

In addition, government agencies, including the SEC, should be encouraged to press for data to suit their own agendas. There are already requirements to disclose greenhouse gas emissions and use of conflict minerals. Other agencies may decide to impose their own “unfunded mandate” and justify it as similar to SASB’s work.

 

Sustainability practitioners also will be included in quarterly SEC reporting. In most public companies, quarterly reporting is a tortuous, stress-filled process that any sane manager would seek to avoid. However, being involved in quarterly reporting should raise the profile of sustainability professionals.

 

Finally, SASB will stay ahead of emerging risks. It updates its standards, as needed, to reflect new issues that are likely to be material. SASB flags emerging issues for each industry it reviews. These are issues that do not yet have sufficient evidence of financial impact or investor interest, but might become material given impending regulation or other developments. Each time SASB reviews its standards, it asks its working groups to consider if these issues have reached the threshold of materiality. As a result, I expect to see a steady increase in the scope of SASB’s standards.

 

Potential downsides

With success could also come some issues. Companies, for example, could reject more requests for information from outside stakeholders. Even if the sustainability folks in a company want to fill out a survey or publish a press release, both the company’s in-house lawyers and auditors may object. But I doubt that companies will shut down their sustainability area or stop measuring and reporting sustainability factors.

 

Also, groups that rely primarily on surveys may get lower responses rates. For instance, companies may be less willing than in the past to complete Robeco’s extensive Dow Jones Sustainability Index questionnaire. Nonfinancial stakeholder groups, such as supply chain auditors, NGOs and government agencies, also may see lower response rates when they ask for information. Metrics users may have to rely more heavily than in the past on crowdsources that pull data from individuals and other anonymous sources.

 

Software providers may not generate much revenue from integrating SASB reporting into their tools.  Each industry has only eight to 12 issues to track, and the methods for measuring each have been well defined. This may make a new SASB reporting module a “giveaway” item that will be bundled into broader suites of more internally focused sustainability measurement and reporting tools.

 

Standardization might reduce innovation. Given that SASB’s working groups tend to choose issues that are already well understood and widely reported, SASB’s issues are backward-looking and “conservative.” SASB, however, has attempted to avoid this risk by explicitly including innovation in business models as one of its objectives.

 

SASB’s approach is industry-centered rather than issue-centered. Outside stakeholder groups, such as Climate Counts or Transparency.org, examine the reported policies and performance of the companies they cover. Their measurements cross industry and geography boundaries. They look for good or bad performance, relative to an absolute standard of behavior. In contrast, each industry within a SASB industry group decides its own list of issues that are likely to be material. It defines how it will report data on these issues and one industry could report an issue differently from the way another industry reports it.

 

Finally, companies may issue fewer separate CSR reports. Legal and auditor pressure may curtail the information companies release on the CSR area of their corporate websites. About 45 percent of the 9,296 companies we track have a CSR area on their website. Companies could instead focus an excessive amount of attention on the issues that SASB’s standards cover. Both these changes would reduce the amount of “primary” information available to those of us interested in company sustainability performance.

 

On balance, the downsides of SASB’s success seem to be outweighed by the benefits. Many companies will appreciate the reduction of risk and costs that a SASB regime may create.

 

Should we stay put or sail back into the storm?

SASB’s success could disrupt many aspects of sustainability reporting. A few changes it prompts may not be positive, and a focus on SASB-related issues could inhibit or reduce the release of data that is important to noninvestor stakeholders.

 

SASB seems likely to drive more than U.S. nonfinancial reporting. Foreign groups carefully will examine SASB’s standards. Many who download SASB standards are outside the U.S. Large foreign companies with securities that trade in the U.S. are subject to U.S. security law. Groups such as the World Federation of Exchanges may decide that SASB standards are akin to Generally Accepted Accounting Principles for nonfinancial reporting, and mandate conformance to SASB for the companies they list. As they do this, SASB’s influence quickly could spread beyond the confines of the U.S. market and penetrate into reporting for public companies in other world markets and private companies.

 

 

SASB has created a safe harbor in which I expect to see many of corporate America’s “boats” moor soon. But to move corporate reporting forward, we need to find ways to brave the storms and reach distant, more sustainable shores.

 

I believe that outside groups will continue to push for broad disclosures that cross industry and geographic boundaries and for specific data on each company’s social performance. I also believe that corporate sustainability managers will continue to push for internal reporting and metrics that go far beyond what SASB requires. To sail the ocean, we need both harbors and maps for finding them.  There is still a lot of open ocean for us to explore.

 

 

 


 

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.

 

Tagged , , ,

Why companies should shelter in SASB’s safe harbor

As previously seen on GreenBiz.com

 

By Bahar Gidwani

 

SASB safe harborImage: Shutterstock/Ferenz

 

Since Jean Rogers founded the Sustainability Accounting Standards Board in 2011, more than 1,800 stakeholders have participated in its standards–setting process. One hundred-plus industry experts, including me, have joined it as advisers and it has issued standards for 35 of more than 80 industries it plans to target.

 

SASB continues to move ahead quickly. It expects to complete 45 industry standards by the end of this year. Recently, Michael Bloomberg and Mary Schapiro accepted roles as chairperson and vice chairperson, respectively.

 

People often ask me if SASB will replace the Global Reporting Initiative, compete with the International Integrated Reporting Committee or eliminate the need for research by socially responsible investment firms and other sources of sustainability information. Based on these questions, I have concluded that very few people actually understand what SASB is or how it fits into the world of sustainability metrics.

 

I personally believe that SASB is creating a “safe harbor” for nonfinancial, sustainability-related reporting, meaning legal and regulatory protection for companies regulated by the U.S. Security and Exchange Commission.

 

“The Private Securities Litigation Reform Act provides a safe harbor to companies who disclose forward-looking information that is accompanied by meaningful cautionary statements. SASB disclosures involve information about the company’s ability to create value in the future,” the organization says on its website.

 

A legal safe harbor is “usually found in connection with a vaguer, overall standard,” according to Wikipedia. If SASB is successful, it will create a safe haven within the vague, diffuse world of nonfinancial reporting, a place where companies voluntarily can use SASB standards as guidance that help them comply with existing regulation.

 

SASB standards require companies to reveal the items the standards deem to be material and effectively allow them to not disclose other nonmaterial items. Companies that comply with the SASB standard should reduce their chance of being sued by shareholders or examined and criticized by the SEC.

 

Rough Waters

Why do companies need a safe harbor for their nonfinancial reporting?  Take a look at this CSRHub chart showing the number of groups measuring company performance and the types of data they use for each of four areas of sustainability reporting.

 

 

There are literally hundreds of groups measuring company performance in each area and they are using thousands of measurement approaches. Even with all this data available, stakeholder groups keep coming up with new types of data they feel they need. The result is that a new measurement system sweeps through the metrics area every few months, creating waves, roiling the waters and buffeting companies with disparate requests for information. Rather than giving out more, better data, some companies “batten down the hatches” and try to wait out the storm.

 

A way to calm the waters

I think many people initially thought SASB was just going to produce another questionnaire to fill out or box to tick. Instead, SASB is creating standards that help companies comply with an existing SEC law called Regulation S-K. By tying its work into an existing regulatory framework, SASB recruits support from government regulators and a legion of securities lawyers and investment analysts.

 

The SEC regulates the way publicly traded companies disclose information to U.S. investors. It expects publicly traded companies to reveal any information material to the company’s current or future performance. Before a public company makes a disclosure decision, it generally turns to its auditors and lawyers for advice. A company’s auditors will say if they think they can measure a proposed disclosure item accurately. Auditors can’t “sign off” on financial statements that contain unsupported statements masquerading as facts. A company’s lawyers will warn when they feel that disclosing an item might open the company up to legal actions, either by investors or other stakeholders.

 

SASB’s disclosure standards define and streamline this process. Attorneys and auditors could insist that companies reveal the things that SASB says they should. Shareholder activists and litigators will probe a company that is not forthcoming. As a result, tens of thousands of U.S. publicly traded companies could start releasing hundreds of thousands of well-defined nonfinancial metrics.

 

SASB’s standards are unlikely to trigger more shareholder lawsuits than occurred in the past. But if a lawsuit claims that a company failed to reveal material facts relating to its sustainability performance, SASB standards are likely to be referred to in the claim, the defense argument or both.

 

Building the breakwater

Other groups have created or tried to create sustainability reporting standards. For instance, there are International Standards Organization standards for environmental data reporting (ISO14000) and for more general business sustainability reporting (ISO26000). There are also accounting standards and efforts by various industry groups to organize the data their members gather and distribute.

 

SASB’s innovation has been to use “social norms theory.” It is “a social norm is a sociological concept that refers to explicit or implicit rules that guide behaviors that occur in a social context … transmitted through formal channels such as organizational policies, or by informal channels such as stories, rituals, role-modeling, or nonverbal communication,” according to the National Social Norms Institute.

 

For example, in order to study investment banking and brokerage companies, SASB convened a working group of industry executives, investors who were interested in financial companies and other experts. This group decided that investors should be told about nine nonfinancial investment banking and brokerage company issues, such as employee inclusion, which the group defined as the percentage of gender and racial/ethnic group representation for executives and other employees. SASB’s staff then helped design procedures for determining how to count each type of racial and ethnic group and decide which level of a company’s management were “executives.” While the input from SASB’s industry working groups is extremely important, it ensures broad support for its standards through this staff support, evidence-based research, a 90-day public comment period for each standard and review by an independent Standards Council.

 

The SASB working group sought to identify the data items that would be most important for companies in their industry. In particular, they focused on things that investors already ask for. Issues that 75 percent of the working group members felt were important generally make it into the standard. Some issues that receive a lower consensus receive further research and vetting by SASB’s Standards Council.  The resulting list of nonfinancial issues for investment banks was narrow, fairly easy to measure and relatively noncontroversial.

 

So far, SASB has convened working groups for 50 industries in seven sectors. Each has included corporate professionals associated with a lot of big companies. Even more important, many companies are well regarded for their sustainability reporting. We track and rate most companies associated with SASB working group members. The chart below shows the average rating for these companies vs. all U.S. companies.

 

SASB members have strong CSR

 

 

The “100 percent” club companies (more than 50 percent of the working group members) are the ones that other companies might like to follow. When a large group of well-respected peers endorse the standard, it becomes a “norm” that other companies will want to join.

 

This is the first in a two-part series about the use of SASB standards as a safe legal harbor for U.S. public companies. Bahar Gidwani is an adviser to SASB but does not represent the organization.

 

 

 

Tagged , , ,

Why Use Big Data to Measure CSR?

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

 

By Bahar Gidwani

 

arrows going upIn the past several posts, we have defined Big Data, shown the problems we hope it will address, and described how CSRHub has implemented a Big Data approach to creating corporate social responsibility (CSR) and sustainability ratings.  It is time now to discuss the benefits and drawbacks of the “Big Data” approach.

 

The assumption is that this approach offers many benefits which are not available under traditional analyst-based ratings methods:

 

  • A broad measure of perceived performance.  Input from most of the “stakeholders” who evaluate a company’s sustainability performance is captured.  Investor input from the ESG/SRI sources, community input from NGOs and government groups, and input from suppliers, employees, and customers via supply chain tools, employee surveys, and product ratings are included.  While no one can claim to measure true company performance—no external system can do this, it is possible to give an accurate overall multi-stakeholder-based estimate of how a company is perceived.
  • Increased transparency and accountability.  The system described automatically reveals to users which sources have reported on each company rated.  Via subscriber-accessible tables and custom reports, users can inspect the details of the data gathered.  This allows companies and their stakeholders to identify the data elements that affect how they are perceived (transparency) and to respond to or correct data that may not be accurate (accountability).
  • Reduced impact from errors and bias.  If a source contains a lot of factual errors or an undisclosed bias, this system automatically reduces the weight given to the source.  In this way, the effect on our results of poor quality sources is minimized and corrected for systemic biases.  Because sources generate their information independently, there is good statistical accuracy for our aggregated scores.
  • Regular update and trend tracking.  Some sources update their information daily, some quarterly, some only once per year.  However, because there are so many sources, our ratings are updated each month.  This allows the system to show trend charts that connect actions and outcomes with perception.
  • Broad coverage of industries, geographies, and company types.  An aggregation system is dependent on its sources for coverage.  We do not yet have full data on small companies or on those in remote geographies or unusual industries.  But, the system allows us to use whatever is available.  We may not be able to rate all aspects of each new company we add to our system, but any ratings we can generate should be consistent across our system.

 

We Don’t Yet Measure Thousands of Smaller Corporate, Not-for-profit, and Government Entities

 Tpe of Organization part 3

  • This approach supports a fourth Big Data “V”—“Veracity.”  There is free access to basic ratings information to everyone.  As a result, any stakeholder can check scores and audit results.
  • Users can adjust ratings to fit their own personal views.  There is sufficient data from a wide enough range of sources that we can present alternate sides of many contentious issues.  Users can record a profile that adjusts our ratings to match their own view.  Users can emphasize the priority of environment, employee, community or governance issues, be in favor of nuclear power or against it, or focus on the risks from mercury in fish.  They can then share their personal overall ratings of company sustainability with the other users.

 

This approach to ratings has a few drawbacks that are common to Big Data systems:

 

  • Perception is not reality.  The data that companies self-report is focused mostly on its policies and intent.  A company that is good at communicating and “spinning” its story could raise its ratings on the system to a level they do not deserve.  Of course, as more data is secured—especially from bottoms up “crowd” sources—this type of behavior will likely eventually be detected.  A GovernanceMetric tool called Audit Integrity does this type of sleuthing on corporate financial reports.
  • Best practices are not immediately obvious.  It is fairly easy to discover that certain activities seem connected with better ratings.  For instance, companies who use the Global Reporting Initiative (GRI) guidelines or who participate in the UN Global Compact have statistically better ratings than those who do not.  However, it is hard to tell if a program at one company has more effect on its perceived CSR performance than a different program at another company.  The system described can only provide a base of data—the study and explanation of ratings differences must be done by CSR professionals.
  • We cannot correct individual company errors that are found.  There are conflicts in the views of disparate sources, on a regular basis.  These discrepancies can’t be “resolved” even when we suspect that some are caused by a source’s data collection or analysis error.  The best that can be done is to report a suspected error to the source and allow it to research and correct the error, in its own way.

 

We believe the benefits of using a Big Data approach to measure corporate social responsibility and sustainability performance far outweigh the drawbacks.  A Big Data system can be extended to include thousands of smaller companies and organizations.  We hope to expand our universe of coverage while we keep narrowing down the “error bars” in our ratings and to see if we can discover some of the drivers that change them.  For instance, as we build up a tail of detailed historic data, we may be able to prove that certain actions lead to ratings changes and others do not.  As more data become available the approach outlined above can be applied to virtually any company regardless of size and location.

 

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

See part 2, A Big Data Approach to Gathering CSR Data.

 

 


 

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.

 

 

Tagged , , , , , , , , , ,

Keeping up with the Green Joneses – Solar and EV Adoption

By Carol Pierson Holding

 

 

The most recent column on “groundbreaking innovation” Co-Exist from Fast  solarCompany was titled “If Your Neighbor Gets a Solar Panel, You’re Going to Want One Too: Whether  your neighbor has a solar installation is more likely to influence your decision than politics or income level.”

 

The articles’ author Ben Schiller cites studies which mapped 3,843 solar units installed in Connecticut between 2005 and September 2013. What they found was “‘considerable clustering of adoptions’ in ‘wave-like centrifugal’ patterns. When they looked at the dates of the installs, they found one decision in a neighborhood tended to lead to another.”

 

Pretty cool, but isn’t this old news? Back in 2005, a study in San Diego compared the influence on energy consumption between potential money savings vs concern for the environment vs peer pressure. The results clearly supported social influence, which reduced consumption by 10 percent.” Influence guru Robert B. Cialdini weighed in on the remarkably effective tactic of adding a smiley face to bills for energy reduction, which further reduced energy use: “People don’t just want to conserve energy, they want to be acknowledged for conserving energy.”

 

Electric Vehicle (EV) adoption also spread in clusters. Not surprisingly, EV and hybrid purchases have been most concentrated in affluent communities with early-adopter characteristics. But far more interesting and perhaps even more relevant, 50.5%  of all registrations are clustered in just three suburbs, Atherton and Los Altos (in Silicon Valley), and Santa Monica in Southern California. California has created an infrastructure for EV/Hubrids and is first in ownership, but if affluence was the defining attribute, wouldn’t EV/Hybrids be spread evenly across California’s many wealthy communities?

 

Now that many low- and mid-priced vehicles are offered in hybrid varieties (i.e., Toyota Camry, Honda Civic, and Ford Fusion), green social influence is moving from novelty for the affluent to smart money for the mainstream. It happened before with residential solar:  the highest concentration of Connecticut solar installations clustered in middle income, Republican-voting areas of the state.

 

Peer influence is also having an impact in the corporate world, where renewable energy  is replacing fossil fuels in industry clusters. Benchmarking in industries and companies – comparing your sustainability performance against your peers – leads to greater adoption of renewable energy.

 

As reported in the solar industry’s third annual Solar Means Business, solar installations cluster by industry, with retail leading the pack. Walmart remains the top solar user overall, spurring its leading competitor Target to move from 16th to 8th ranking with the addition of 15 new solar systems. Retailers’ large flat store roofs are well-suited to roof-top solar apps and their razor-thin margins make energy cost reduction perhaps a higher priority, but other industries are following suit. Apple, which once eschewed environmental concerns, is now fourth in solar installations. Their acknowledgement? Apple appeared first alongside Google and Facebook (their data farms run on wind power) in the Greenbiz article “Apple, Facebook, Google score in Greenpeace data center ratings.”

 

Peer influence, whether in a corporate or a residential setting, modifies environmental behavior. Can peer shaming work too? Freakonomics economist Steven Levitt, would argue yes. In his words: “…society actually likes it when other people get shamed. … it’s actually a really incredibly efficient mechanism for punishing people who do things we don’t like.”

 

Another experiment tests peer shaming empirically. San Francisco and Berkeley have both passed legislation requiring that as of March 1, 2015, gas station owners must put climate change warning labels on all gas pump nozzles. The labels say how much carbon dioxide is emitted for every tank of gas burned, saying explicitly how using gas as fuel is contributing to climate change.

 

Reflecting in The Guardian on a University of Minnesota study that again showed the power of social influence, Adam Corner of the University of Cardiff says, “We may currently compete through demonstrations of conspicuous material consumption, but material goods are simply a marker for social status. It’s the social status that’s important – and the markers we use to signify it can easily change.”

 

“Image courtesy of Lauren Wellicome via Flickr cc”

 


Carol Pierson HoldingCarol Pierson Holding writes on environmental issues and social responsibility for policy and news publications, including the Carnegie Council’s Policy Innovations, Harvard Business Review, San Francisco Chronicle, India Time, The Huffington Post and many other web sites. Her articles on corporate social responsibility can be found on CSRHub.com, a website that provides sustainability ratings data on 9,300+ companies worldwide. Carol holds degrees from Smith College and Harvard University.

 

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 9,300+ companies from 135 industries in 106 countries. By aggregating and normalizing the information from 343 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.

 

Tagged , , , , , , , , , , , , , , , ,