How Long Is the Journey
As previously seen on the CSRHub blog.
By Bahar Gidwani
CSRHub has been generating consensus ESG ratings for 16 years. We started with data on about 5,000 entities. In 2024, we’re able to publish data on more than 56,000 entities (companies, not for profits, government bodies).
Entities may start their reporting process by joining an organization, submitting data to a government database, or issuing a sustainability report. Some of the entities we uncover stay at an unrated or partially rated state. However, more than 26,000 entities are currently emitting enough information to enough ratings sources for us to give them complete consensus scores across the twelve subcategory topics we track. (You can read more about our rating methods here.)
How long does it take between the time when we first notice an entity and the time when we are able to give it full ratings? As the chart below shows, when we first began CSRHub, this part of the “ratings journey” took an average of over four years to complete. By 2018, the “normal” time span between when an entity starts to reveal data and when it becomes fully rated declined to less than a year.
We believe there are at least two likely explanations for this speed up in the “maturity cycle” for entity ratings. One is that CSRHub has steadily added sources over the past 16 years. We currently add millions of new ratings details each month via sources in North America, Europe, Asia, Africa, and South America. We ingest the views of other ratings firms, not-for-profit groups, publications, expert organizations, and government databases. We have data points on more than 200,000 entities we do not yet expose on our site. If an entity starts sharing ESG data, several of our sources are likely to analyze it and express an opinion about what it means. We can then aggregate their views and start to provide a consensus score of how that entity is performing on ESG issues.
A second plausible explanation is that the rules for generating data and the pathways for distributing it have improved over the past ten years. We now have several accepted ESG reporting standards, a growing number of ESG-related regulations, and a general sense that all entities should generate and share ESG information. Even so, many entities may be surprised that anything they say will be judged—swiftly! Sustainability managers should probably wait until they have a well thought out story with metrics, before they begin their entity’s journey into ESG reporting.
We doubt that the journey from first report to rating will accelerate further—at least as far as CSRHub is concerned. We need multiple sources from various perspectives, to drive our ratings engine. We must wait to rate until a third, fourth or fifth source discovers a new entity, so that we can generate a solid estimate of its current sustainability performance. In the meantime, we expect newly-minted sustainability managers to continue to ask us about the best way to begin their journey and give them advice about how to find their best path forward.
Bahar Gidwani is CTO 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. He plays bridge, races sailboats, and is based in New York City.
About CSRHub
CSRHub offers the most comprehensive global set of Consensus ESG (Environmental, Social, and Governance) ratings, information, and tools. CSRHub’s business intelligence system measures the ESG business impact that drives corporate and investor sustainability decisions. Founded in 2007, CSRHub covers 55,000 public and private companies, and provides ESG performance scores on over 35,000 companies from 135 industries in 210 countries. Our Big Data platform uses algorithms to aggregate, normalize and weight ESG metrics from 933 sources to produce a strong consensus signal on corporate sustainability performance.
