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.

 

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CSRHub Simplifies Sustainability Benchmarking: An Interview with CSRHub Co-founder Cynthia Figge

As previously seen in the WiznessBlog.

 

benchmarking

 

Wizness and CSRHub have joined forces to simplify sustainability benchmarking against Cynthia Figge, Co-founder and COO of CSRHubcompetitors. CSRHub co-founder Cynthia Figge answered questions about her company and how the new benchmarking product will benefit users.

 

Q: What is CSRHub’s goal and purpose?

A:  CSRHub aggregates information about corporate social performance into one place so companies and individuals can track sustainability worldwide. It’s the first easy way to discover how companies perform and compare on sustainability and CSR issues.

 

Q: What was the genesis of CSRHub?

A: My partner Bahar Gidwani and I founded CSRHub in 2007 to solve the CSR data problem. Back then, there were many often conflicting data sources – sound familiar? We were the first company to recognize that the growing body of CSR information would soon require a Big Data solution. We figured out how to combine the data into a single rating that incorporates an ever-growing number of sources. We started with the premier environment, social, governance, the ESG firms, also known as socially responsible investment or SRI — we aggregate nine now — and added data from 300 sources so far and counting, NGOs plus government agencies, social networking groups, indexes and publishers. Our proprietary tools combine more than 60 million pieces of data on sustainability and CSR performance into a consistent set of ratings.

 

Q: Who are CSRHub major ESG/SRI data sources?

A: Our sources include premier ESG organizations ASSET4 (Thomson Reuters), CDP (Carbon Disclosure Project), EIRIS, GovernanceMetrics International, IW Financial, MSCI (ESG Intangible Value Assessment and ESG Impact Monitor), RepRisk, Trucost and Vigeo.

 

Q: What is the CSRHub schema?

A: Our data schema lays it out in detail, but generally our ratings are based on four categories: Environment, Employees, Community, and Governance. Each category has three subcategories. For example, within the Environment category there are Environmental Policy and Reporting, Energy and Climate Change, Resource Management. For Employees, Diversity and Labor Rights, Compensation and Benefits, Training Health and Safety, and so on.

 

Q: How are people using CSRHub ratings?

A: The market uses us for six applications:

 

First, for benchmarking. Our ratings and analysis tool covers 9,296 companies across 135 industries to track competitors over time.

 

A lot of our users analyze performance by stakeholder for CSR and Sustainability Reports. We offer a, single powerful interface to over 348 sources of information.

 

Professors and students conduct academic research and projects. Our tool analyzes six years of data and over 60 million data points, and is currently used in hundreds of universities globally.

 

Sustainability is increasingly important to company brand. Companies use us to build authentic brand values and increase customer loyalty.

 

CSRHub is used to build a world-class sustainable supply chain. Our APIs can map into a company’s supply chain network across 106 countries.

 

Finally, we find that sustainability performance is increasingly a factor in economic decisions. People search for places to work, brands to buy, and partners to support based on their values.

 

Q: How does CSRHub enable comparisons between companies? Can we really integrate apples and oranges?

A: The CSRHub schema maps data elements from all these data sources into the twelve subcategories, then aggregates and normalizes the data for comparability. The schema isn’t unique, but the aggregation and normalizing absolutely is. Bahar and I together had the perfect skillset to attack this challenge. We met at Harvard Business School. I went on to cofound EKOS International, one of the first consultancies to integrate sustainability and corporate strategy, way back in 1996 if you can believe it. Bahar has a CFA and built and ran Web-based and technology-based businesses on Wall Street with Kidder, Peabody and for McKinsey.

 

Q: Why is knowing my CSRHub rating and ranking in my industry important?

A: Benchmarking is key to competing successfully and creating value. Knowing your CSRHub rating and ranking enables your company to gain an independent perspective about how well you perform compared to other companies, identify specific areas for improvement, and monitor company CSR performance over time. Integrating CSRHub benchmarking across divisions enables a company to prioritize improvements and provide greater transparency of progress.

 

Q: How will CSRHub and Wizness work together?

A: CSRHub and Wizness are collaborating to create a Benchmark Template Report available on the Wizness Publisher website. Our reports will be streamlined, digital, social and mobile solutions for key stakeholders interested in sustainability data and progress.

 

Q: When will this benchmarking tool be available?

A: An early preview of the report is available now in PDF form at the following address: https://publisher.wizness.com/csrhub

 

Photo courtesy of Wizness.

 

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.

 

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A Big Data Approach to Gathering CSR Data

The following is part 2 of a 3-part series on “Big Data.”

 

By Bahar Gidwani

 

We have previously defined “Big Data” and shown how we feel a Big Data system built by CSRHub could help address some problems that exist in collecting corporate social responsibility (CSR) and sustainability data on companies.  We have also further described the problems with the currently dominant method of gathering this data—an analyst-based method.

 

CSRHub uses input from investor-driven sources (known as “ESG” for Environment, Social, and Governance or “SRI” for Socially Responsible Investment), non-governmental organizations, government organizations, and “crowd sources” to construct a 360 degree view of a company’s sustainability performance.

 

The illustration below shows the steps in our process.

 

CSRHub Ratings

 

 

The steps are:

  •  Convert measurement from each data source into a 0 (low) to 100 (high) scales.  This  requires understanding how each source evaluates company performance.
  •  We next connect each rating element with one or more of our twelve subcategory  ratings.  (Some elements may also map partially or exclusively to special issues such as  animal testing, fracking, or nuclear power.)
  •  We compare each source’s ratings with those for all other sources.  Each company we  study gives us more opportunities to compare one source’s ratings with another.  The  total number of comparisons possible is very large and growing, exponentially.  We  use the results of our comparison to adjust the distribution of scores for each rating  source so that they fall into a “beta” distribution that has a central peak around 50.
  •  Some sources match up well with all of our other data.  Some sources don’t line up.  We add weight to those who match well but continue to “count” those who don’t.

 

We then repeat steps A to D as many times until we have found a “best fit” for the available data.  Each time we add a new source, we go through an initial mapping, normalization, and weighting process.

 

An Example

 

It may help explain our data analysis process by using a specific example.  Hewlett Packard is a heavily tracked company.  We have 154 sources of data for this company that together provide 17,571 individual data elements.  Only 62 of these data sources provided data for our July 1, 2014 rating—the rest of the data sources provided data for previous periods (our data set goes back to 2008).  The 62 current data sources provided 575 different types of rating elements and a total of 610 different ratings values that do not affect/apply to special issues.

 

After their conversion to our 0 to 100 scale, we map the rating elements into our twelve subcategories.  We now have 1,403 ratings factors.  We selected our subcategories to allow an even spread of data across them. You can see that we have a reasonably even spread for Hewlett Packard:

 

 

CSRHub Category

Number of Data Elements

Board

95

Community Dev & Philanthropy

78

Compensation & Benefits

63

Diversity & Labor Rights

95

Energy & Climate Change

149

Environment Policy & Reporting

154

Human Rights & Supply Chain

77

Leadership Ethics

205

Product

93

Resource Management

156

Training, Health & Safety

48

Transparency & Reporting

190

Total

1,403

 

 

Before we can present a rating, we need to check first that we have enough sources and enough “weight” from the sources we have, to generate a good score.  In general, we require at least two sources that have good strength or three or four weaker ones, before we offer a rating.  As you can see, we have plenty of sources to rate a big company such as HP.

 

CSRHub subcategory sources

 

Even after normalization, the curve of ratings for any one subcategory may have a lot of irregularities.  However, we have enough data to provide a good estimate of the midpoint of the available data, for those ratings we report.  Below you can see that some sources have a high opinion of HP’s board while others have a less favorable view.  The result is a blended score that averages to less than the more uniform Leadership Ethics rating.

 

CSRHub subcategory rating variations


The overall effect of our process is to smooth out the ratings input and make them more consistent.  As you can see in the illustration below, the final ratings distribution is organized well around a central peak.  The average overall rating of 64 is below the peak, which is around 80.  The original average rating was 61.

 

 

analysis charts part 2

 

 

By making a few assumptions about how the errors in data are distributed, one can assess the accuracy of ratings.  In a previous post, we showed that CSRHub’s overall rating accurately represents the values that underlie it to within 1.8 points at a 95% confidence interval.

 

In our next post, we will discuss the benefits and drawback of using this complex and data intensive approach to measuring company CSR performance.

 

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

 


 

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.

 

 

 

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CSRHub and Wizness Announce Benchmarking Service Partnership

CSRHub and Wizness Publisher

CSRHub is pleased to announce it has formed a partnership with Wizness, powered by Enablon, to sell benchmark reports on their Publisher platform. The Publisher solution enables companies to easily design and publish interactive CSR reports that are social-friendly and mobile ready. Through their collaboration, CSRHub and Wizness Publisher will allow users to create a custom benchmark report piping in CSRHub ratings comparing five companies. The report will be available online through laptop and mobile devices, but also downloadable as a PDF.

 

Wizness and CSRHub have joined forces to let you benchmark your Sustainability Scores against your competitors. Your benchmark is presented through a responsive report which you can easily share with your team.

 

Benchmarking CSR_Wizness and CSRHub

 

Wizness Publisher and CSRHub plan to launch the service soon, but interested users can already register for an early preview at the following address: https://publisher.wizness.com/csrhub

 

About Wizness

 

Wizness is an online platform which enables companies to collect their Sustainability data, create their online Sustainability profile, design & publish interactive CSR reports, and engage in interactive conversations with their stakeholders. Through its services, Wizness enables organizations to reduce their reputational risks and communication costs as well as reinforce their brands.

 

Wizness is powered by Enablon, the world’s leading software provider of Sustainability, EH&S and Risk Management solutions.

 

For more info about Wizness, please visit https://publisher.wizness.com/

For more info about Enablon, please visit http://enablon.com/

 

About CSRHub 

 

CSRHub provides access to the world’s largest corporate social responsibility and sustainability ratings and information, covering on 9,300 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.

 

CSRHub is a B Corporation, an Organizational Stakeholder (OS) with the Global Reporting Initiative (GRI), a silver partner with Carbon Disclosure Project (CDP), and an Advisory Council Member of Sustainability Accounting Standards Board (SASB).

 

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Using “Big Data” to Rate Corporate Social Responsibility: One Company’s Approach

The following is part 1 of a 3-part series on “Big Data.”

 

By Bahar Gidwani

 

“Big Data” is a useful tool for rating corporate social responsibility (CSR) and sustainability performance.  We believe that the Big Data system that CSRHub has developed is one answer to dealing with the rise in new ratings systems (it seems there is a new one announced each month) and with the disparities in scores that occur among these different systems.

 

In 2001, Doug Laney (currently an analyst for Gartner), foresaw that users of data were facing problems handling the Volume of data they were gathering, the Variety of data in their systems, and the Velocity with which data elements changed.  These “three Vs” are now part of most definitions of the “Big Data” area.

 

Ratings in the CSR space appear to be a candidate for a big data solution to its three “V” problems.

 

  • Volume:  There are many sources of ratings.  CSRHub currently tracks more than 330 sources of CSR information and plans to add at least another 30 sources over the next six months.  Our system already contains more than 55,000,000 pieces of data from these sources that touch more than 140,000 companies.  We hope eventually to expand our coverage to include several million companies.
  • Variety:  Each of these 330 sources uses different criteria to measure corporate sustainability and social performance.  A number of comprehensive sustainability measurement approaches have been created.  Unfortunately, each new entrant into the area seems compelled to create yet another system.
  • Velocity:  With hundreds of thousands of companies to measure and at least 330 different measurement systems, the perceived sustainability performance of companies constantly changes.  Many of the available ratings systems track these changes only on a quarterly or annual basis.

 

Most systems for measuring the CSR and sustainability performance of corporations rely on human-based analysis.  A researcher selects a set of companies to study, determines the criteria he or she wishes to use to evaluate their performance, and then collects the data needed to support the study.  When the researcher can’t find a required data item in a company’s sustainability report or press releases, he or she may try to contact the company to get the data.

 

Some research firms try to streamline this process by sending out a questionnaire that covers all the things they want to know.  Then, they follow up to encourage companies to answer their questions and follow up again after they receive the answers, to check the facts and be sure their questions were answered consistently.  An NAEM survey showed that its members were seeing an average of more than ten of these results in 2011, and some large companies say they receive as many as 300 survey requests per year.

 

 

Graph on External Data

 

NAEM Green Metrics That Matter Report—2012 for 35 members.

 

Both the direct and survey-driven approaches to data gathering are reasonable and can lead to sound ratings and valuable insights.  However, both are limited in several important ways:

 

  • The studied companies are the primary source of the data used to evaluate them.  While analysts can question and probe, they have no way to determine how accurately a company has responded.
  • Different areas of a company may respond differently to analyst questions.  It’s hard to determine objectively from the outside, which area of a company has the right perspective and which answer is correct.
  • When companies get too many surveys and requests for data, they stop responding to them.  This “survey fatigue” leads to gaps in the data collected.  Note that only a few thousand large companies have full-time staff available to answer researcher questions.
  • Often analysts cannot financially justify studying smaller companies.  There is little interest in smaller companies from the investor clients who pay for most CSR data collection.  As a result, most analyst-driven research covers a subset of the world’s 5,000 largest companies.  There are only a few data sets bigger than this, and they cover only limited subject areas.  There is very little coverage for private companies, public organizations, or companies based in emerging markets.

 

Large Companies Get Heavy ESG Attention

 

Large Companies Get Heavy ESG Attention

 

  • A human-driven process will always involve a certain amount of interpretation of the data.  This in turn can lead to biases that are hard to detect and remove.
  • Each human-driven result is based on its own schema and therefore they are hard to compare.  Companies do not understand why their rating varies from one system to the next and this reduces their confidence in all ratings systems.

 

It may be useful to take a look at some details of one company’s approach to a “Big Data” based analysis of CSR ratings. Our next post explains how CSRHub applies its methodology to address “Big Data” problems while also noting that every system has some limitations.

 


 

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.

 

 

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