At a Glance: CSRHub ESG Business Intelligence DataFeed

CSRHub utilizes a proprietary Big Data platform to aggregate, normalize, and weight over 600 sources of Corporate Social Responsibility (CSR) data, including ratings from 10 leading ESG analyst databases, to create transparent and comprehensive ESG consensus scores.

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 The Basics

CSRHub utilizes a proprietary Big Data platform to aggregate, normalize, and weight over 600 sources of Corporate Social Responsibility (CSR) data, including ratings from 10 leading Environmental, Social, and Governance (ESG) analyst databases, to create transparent and comprehensive ESG consensus scores. The process is powered by patented algorithm and machine learning techniques that harmonize the disparate data sources to produce a stable signal useful for understanding a company’s non-financial performance.

The Coverage and Feed Structure

 

The CSRHub DataFeed covers over 18,000 public and private companies, government organizations and not-for-profit organizations in 136 industries and 136 countries globally. The DataFeed has monthly history back to 2008.

region Count Type Start Date
Africa 530 Entities 2008
Asia 5,840 Entities 2008
Europe 3,740 Entities 2008
Latin America 830 Entities 2008
Middle East 350 Entities 2008
North America 5,740 Entities 2008
Pacific 830 Entities 2008

The DataFeed contains a main table with company level scores. Included are 12 subcategory scores that roll-up to four category scores and a total score following the methodology detailed below.

The Differentiators

The CSRHub ESG Business Intelligence DataFeed was specifically designed to overcome the unique set of challenges facing companies and investors hoping to apply Corporate Social Responsibility and ESG/SRI measures to their benchmarking and investment analysis processes. One of the biggest challenges facing investors is the huge number of CSR and ESG/SRI sources which include ESG Analyst Databases, company filing information, news publications, NGOs, industry reports, and more. Compounding the problem is the reality that each source has its own coverage universe, frequency and methodology making it difficult to aggregate everything in a meaningful way.

CSRHub’s ratings system removes the potential for bias and inconsistency by following a robust mechanical process. First, each element of data received from a source is mapped to one or more of 12 subcategories, which in turn, roll up to four top-level categories.  Each individual data element is then converted from its raw state to a numeric rating on a 0-100 scale (100 best). The scores from each source are then compared on a company-by-company basis to identify and eliminate biases per source. After making these adjustments, source level data is aggregated by company into subcategory scores. CSRHub weights the score from each source based on its estimate of that source’s credibility and value. Finally, CSRHub will drop ratings for companies without enough information to publish a score. This process results in a broad universe of coverage with stable and meaningful scores.

Example Use Case

CSRHub’s ESG Business Intelligence DataFeed provides users with the market consensus view of a company’s CSR/ESG profile. There tends to be a wide dispersion in company-specific ESG metrics caused by the huge amount and variety of sources providing ESG-relevant information. CSRHub provides an aggregate measure of these sources and their scores are uncorrelated with any individual ESG provider and other measures of company financial performance. This gives investors an orthogonal risk and alpha factor to incorporate in quantitative investment processes.

For fundamental portfolio managers or research analysts, CSRHub’s Business Intelligence DataFeed provides an approachable and easy to understand measure of a company’s ESG performance. This data can be used to understand the quality of a company’s supply chain, how industry peers compare, and to understand a company’s long-range commitment to CSR/ESG principles. This information can be included into Long/Short pair trade strategies, momentum driven approaches, or for positive/negative screening of companies based on ESG profile.

If you have questions or would like to learn more, please contact us at OFSupport@factset.com

Please visit the CSRHub ESG Business Intelligence DataFeed product page on the Open:FactSet Marketplace for more information.

 

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