Green Bond Issuers Appear to Have Higher Than Average Perceived Sustainability Performance

By Bahar Gidwani

 

Overview

 

The Green Bond concept was developed in 2007/2008 by the World Bank and Skandinaviska Enskilda Banken (SEB).  They created this fixed income product to respond to demand from investors who wanted to support projects that address climate change.  By 2010, almost $4 billion of green bonds were being issued by a variety of institutions such as the World Bank and the European Investment Bank.  Corporate borrowers began issuing Green Bonds in 2011, followed by municipalities and local governments.

 

Green bond issuance has exploded

 

https://www.climatebonds.net/market/history

 

 

The initial market for Green Bonds was with socially responsible investors (SRI), who seek to both earn a return and to generate a positive social impact.  The market’s growth has encouraged mainstream investors to participate—and has encouraged a wide array of corporate and governmental entities to initiate Green Bond-fundable projects.  With more than $36 billion of green bonds issued in 2014, they have become a distinct “asset class.”

 

Green Bond buyers may expect the entities who originate Green Bonds to have better social and sustainability behavior than entities who do not.  This study tests this assumption by examining the perceived social performance of a set of Thomson Reuters-tracked Green Bond issuers, using CSRHub data on perceived social responsibility performance.  We found data on the social performance for 83% of issuers on Thomson Reuters list.  Together they accounted for 99% of the $951 billion cumulative face value of the Green Bonds issued by the 90 distinct entities we reviewed for this study.

 

To see the full research report, download a complimentary copy here or below.

 

download report

 

 

 


 

About the Author

Bahar 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 was recently interviewed on Brian Lehrer TV. He plays bridge, races sailboats, and is based in New York City.

 

About CSRHub

CSRHub provides access to the world’s largest corporate social responsibility and sustainability ratings and information.  It covers over 15,000 companies from 135 industries in 132 countries. By aggregating and normalizing the information from 400 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 improve corporate sustainability performance.

 

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Data-Driven Storytelling: Is your Company Collecting the Right Data to tell its CSR Story

The catchphrase of 2014/2015 was, and is, big data- Good Done Greatdata sets that are so vast and complex that they need intensive resources to process. But what is the point of data if we cannot process it, analyze it, and effectively communicate it to our stakeholders?

 

Within the Corporate Social Responsibility sector, data legitimizes our efforts and encourages support from internal and external stakeholders. Without properly collecting and communicating the results of our volunteering and giving, CSR efforts can be diminished.

 

Join Good Done Great and CSRHub for a one-hour webinar discussing data-driven story-telling within the Corporate Social Responsibility space discussing topics such as how to collect the correct data, analyze it, and share it with both external and internal stakeholders.

 

Questions to be addressed include:

-          Why is CSR data important?

-          What data should CSR departments collect?

-          How do CSR departments make sense of this data?

-          How do CSR departments effectively communicate this data?

-          Which companies are correctly collecting data & communicating their stories?

 

Your CSR programs are only as effective as the impact and the stories they tell! Don’t miss out on this interactive session with two thought leaders in the technology, CSR, and data analytics space!

 

Tue, Oct 27, 2015 1:00 PM – 2:00 PM CDT

 
Register for GDG
Register, here.

 

Company Descriptions:

 

About Good Done Great:

Good Done Great revolutionizes the way corporations and individuals give back to the communities and causes they care about. Through strategic consulting supported by our integrated software solutions, the Good Done Great team helps Fortune 500 and other companies maximize their corporate social responsibility (CSR) programs.

 

About CSRHub:

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 15,143+ companies from 135 industries in 132 countries. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

 

Presenter Profiles:

 

Christina Bowen leverages over 25 years of public relations, corporate giving, and strategic planning experience in her role as Vice President at Good Done Great. She works directly with Fortune 1000 groups, including Grainger, PPL, Ecolab, and Barrick Gold to deliver integrated CSR programs that increase employee engagement while delivering upon real business goals.

 

Cynthia Figge, Co-Founder and COO of CSRHub, is a forerunner and thought leader in the corporate sustainability movement who co-founded EKOS International in 1996, one of the first consultancies integrating sustainability and corporate strategy. Cynthia has worked with major organizations including BNSF, Boeing, Coca-Cola, Dow Jones, and REI to help craft sustainability strategy integrated with business. She was an Officer of LIN Broadcasting/McCaw Cellular leading new services development and started a new “Greenfield” mill with Weyerhaeuser. She serves as Advisor to media and technology companies and served as President of the Board of Sustainable Seattle. Cynthia has an MBA from Harvard Business School. Cynthia is based in the Seattle area.

 

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Obama Gets Personal on Climate Change

By Carol Pierson Holding

 

Koch problem

 

The climate change movement took a powerful leap in 2012, when Bill McKibben identified a single enemy for climate activists to battle: the fossil fuel industry. He painted that industry as what branding experts would call “black hats,” referring to old Westerns where the bad guys were so identified, in direct contrast to the white-hat’d good guys, which would be McKibben and his followers.

 

This black hat/white hat dichotomy works best if you can reduce it to individuals as symbols. McKibben is obviously the white hat for the environment. In 2013, his status was confirmed with a Gandhi Peace Award.

 

And the black hat’d individual(s)? Charles and David Koch, of course. These two and their company, Koch Industries, are well known bad guys, whose prosecuted crimes include a wrongful death judgment, six felony and numerous misdemeanor convictions, and trading with Iran, and whose crimes against the environment led to record civil and criminal EPA-imposed financial penalties.

 

From about 1997 on, the Kochs took up the black hat mantle as outspoken funders of the climate denier machine.

 

The Kochs, once firmly libertarian, decided they couldn’t affect policy in a minority party and so moved to control Republican office-holders, who routinely cite the Kochs’ economy and jobs-vs-climate mantra. The Koch brothers intend to spend $900 million influencing the 2016 elections.

 

The Kochs are bad actors, no doubt. But they’re so rich and so powerful, how can McKibben ever be effective? It would almost take the leader of the free world to do battle with these determined climate killers.

 

And here he comes, white hat in hand and Kochs in his sights. Why does President Obama finally feel it’s OK to pile on? After all, he depends on the Kochs for support on issues such as rewriting Federal sentencing laws.  So on the environment, he was, as it turns out, relatively gentle with the Kochs — or at least critical only in generalities — back in August when he now famously called their efforts to push back renewable energy standards “…not the American way.”

 

In this issue’s Rolling Stone, Obama wallops the Kochs on specifics. Responding to a question from author Jeff Goodell about why he called the Kochs anti-American, Obama says:

 

“… (the Koch brothers) are actually trying to influence state utilities to make it more expensive for homeowners to install solar panels. …And by the way, they’re also happy to take continued massive subsidies that Congress has refused to eliminate, despite me calling for the elimination of those subsidies every single year.”

 

It’s stunning to see a President whose environmental leanings have been shy of 100 percent commitment take a stance that’s not only pro-climate action, but points fingers at rich and politically powerful individuals.

 

Obama’s stance is here to stay. As the article makes clear, Obama’s pro-climate position has become hardened by two very personal factors.

 

First, his sadness over the natural world’s destruction. Raised in Hawaii and Indonesia, he enjoyed playing in magnificent coral reefs, as he describes them, “that were lush and full of fish” then, “that now, if you go back, are not.” These marvels along with the disappearing Alaskan glaciers he witnessed this month are photogenic examples that are hard to forget.

 

Second, as his daughters grow up, Obama has started to imagine grandchildren and the world they will live in. As he told Goodell,

 

“I think about Malia and Sasha a lot. I think about their children a lot. …When we were out on the water yesterday, going around those fjords, and the sea otter was swimming on its back and feeding off its belly, and a porpoise jumps out of the water, and a whale sprays — I thought to myself, I want to make sure my grandchildren see this.”

 

Even though this cerebral President has talked about climate action since his first election campaign in 2007, he, like all of us, responds most fervently when it hits him personally.

 

Obama ends the interview with a rousing statement that confirms he’s climate change’s white-hat-in-chief:

 

“What I don’t want is for people to get paralyzed thinking that somehow this is out of our control. And I’m a big believer that the human imagination can solve problems. We don’t usually solve them as fast as we need to. It’s sort of like two cheers for democracy. We try everything else, I think Churchill said, and when we’ve exhausted every other alternative, we finally do the right thing.”

 

 


 

Carol2Carol Pierson Holding is President and Founder, Holding Associates. Carol serves as Guest Blogger for CSRHub. Her firm has focused on the intersection of brand and social responsibility, working with Cisco Systems, Wilmington Trust, Bankrate.com, the US EPA, Yale University’s School of Environmental Sciences, and various non-profits. Before founding Holding Associates, Carol worked in executive management positions at Siegel & Gale, McCann Erickson, and Citibank. She is a Board Member of AMREF (African Medical and Research Foundation). Carol received her AB from Smith College and her MBA from Harvard University.

 

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 15,000+ companies from 135 industries in 132 countries. 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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Does Improving a Corporation’s Sustainability Performance Also Improve Its Business Operations?

sipa_logo

Recently graduate students from Columbia University SIPA participated in a Capstone research project in collaboration with CSRHub. The purpose of this project was to further explore the relationship between perceived corporate sustainability performance and operational performance, represented by cost of debt. Through use of a set of corporate social responsibility factors from the CSRHub database and data on the cost of corporate debt from the Bloomberg database, the Capstone team was able to investigate the relationship between the two. The team found that CSRHub’s 12-subcategory model for sustainability explained 9.3% of the variance in the cost of debt, or an estimated $343.4 billion in interest expenses for a group of 1,625 companies.

 

“The sustainability factors that had the most effect on debt varied by industry category and for those companies that had higher interest rates compared to those with lower ones. In general, better Board and Compensation & Benefits scores decreased debt cost. Strong Product and Energy & Climate Change scores can potentially enable companies with higher cost of debt to decrease their interest expenses. Companies with average and below average cost of debt in service and heavy industries benefited from strong Environmental Policy & Reporting and Resource Management practices, while those in light industries were helped by stronger Human Rights & Supply Chain performance.”

 

To see the outcome of the group’s research, click here or download below.

 

Capstone

 

 

 


 

About CSRHub
CSRHub provides access to corporate social responsibility and sustainability ratings and information on 15,000+ companies from 135 industries in 132 countries. By using the world’s most comprehensive CSR metrics database and analysis tools, managers, researchers and activists can benchmark company performance, learn how stakeholders evaluate company CSR practices and improve a company’s sustainability.

 

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CSRHub’s Bahar Gidwani presents at SB New Metrics

CSRHub co-founder Bahar Gidwani presented to Sustainability Brands New Metrics Sustainable Brands New Metrics '15(#newmetrics) our thoughts about how to close the gap between sustainability and profitability.  More than 1,000 leaders in the sustainability area are attending this well-respected conference, this year.

 

To see Bahar’s presentation, click here or below.

 

See slides in pdf

 

 

 

 

 


 

Bahar GidwaniBahar Gidwani  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.  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 15,100+ companies from 135 industries in 132 countries. 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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