Below, please find the Executive Summary and top-line details from our 2021 Methodology. For a complete overview of our processes, please view our Full Ranking Methodology.
Every year, we ask the American public to identify what actions companies should take to be more just and to prioritize the issues that matter to them most when it comes to just business behavior. Those issues become the foundation by which we annually evaluate and track companies. This analysis powers everything we do to incentivize corporate change – from the Rankings of America’s Most JUST Companies and ongoing thematic analysis to products like the JUST Exchange-Traded Fund (ETF).
This methodology provides a detailed look at how JUST Capital calculated the Rankings of America’s Most JUST Companies for 2021. Since 2016, JUST Capital has ranked the largest, publicly traded U.S. corporations, producing a list that reflects how well each company measures up against the American public’s definition of just business behavior. JUST Capital released its inaugural industry-level ranking in 2016, and in 2017, we released our first ever overall ranking of companies, comparing them across different industries. Over the past three years, we have continued to build upon this foundation, bringing more data collection in house, refining our measures and methodologies, and engaging with more companies on their path to practicing more just corporate behavior.
JUST’s ranking methodology evolved this year to add an important component of just business behavior today: the corporate response to the coronavirus pandemic, including 38 COVID-19-specific data points from the COVID-19 Corporate Response Tracker. In total, this year’s ranking model is comprised of 19 core issues, including 339 unique data points across five stakeholders, including workers, customers, communities, the environment, and shareholders.
As part of the development of this methodology and our annual rankings, we solicited input from both the American public and subject matter experts – such as academics, investment practitioners, and corporations – on our choice of measurements and our means of transforming the raw data to use in our ranking model. These checks and balances have been critical to ensuring that our work and our rankings remain as informed, objective, and accurate as possible.
To produce the annual Rankings of America’s Most JUST Companies, our methodology follows a four-step process:
- Survey Research: JUST Capital conducts both qualitative focus groups and quantitative surveys of a representative sample of the American public on a regular basis in order to understand what issues represent just corporate behavior, how these issues should be defined, as well as their relative importance or weight.
- Company Evaluation: In as fair, unbiased, and rigorous a way as possible, JUST Capital develops metrics and collects data on how companies in the Russell 1000 Index – the largest, publicly traded U.S. companies – perform across these issues. These data are used in developing each company’s score and rank.
- Company Data Review: After JUST Capital collects the data for each of the companies in the Russell 1000 universe, companies are given the opportunity to review the data and submit suggestions for revisions to the data before company scores and ranks are determined.
- Rankings: As a final step, JUST Capital develops a ranking model that leverages our survey research and company evaluations to score and finally rank companies from the Russell 1000 Index. We generate an overall ranking of companies in the Russell 1000 universe as well as industry-level rankings so that companies can be compared to their peers.
JUST Capital’s survey research consists of both qualitative and quantitative work, in the form of focus groups and surveys. Since 2015, we have surveyed over 110,000 Americans – representative of the adult U.S. population – adding more than 17,000 respondents in 2020 alone.
Our survey research begins with focus groups that are conducted each year across the country to get detailed, unfiltered input from Americans of all backgrounds on what business behaviors should look like at just companies. The findings from the focus groups are used to inform quantitative surveys that confirm the importance and relevance of these business behaviors and activities. The surveys use a Max-Diff discrete choice modeling technique, which asks respondents what business behaviors are most and least important to defining a just company and then assigns a weight to each business behavior based on the probability that a member of the American public would choose that Issue as most important.
This year, our qualitative and quantitative survey research yielded 19 business behaviors, or Issues, and their relative importance to the American public. The 19 Issues are grouped into five Stakeholders, or overarching topic areas. In order of importance to the American public, thIs year’s Stakeholders and their related Issues are:
More details on the results of our 2020 Survey, as well as an in depth Polling Methodology, can be found here.
The Issues identified by the American public form the basis for JUST Capital’s evaluation of companies. As a first step in evaluating companies, we develop Metrics, or conceptual measures of corporate performance for each of our 19 Issues.
As a second step in JUST Capital’s evaluation of companies, our analysts determine appropriate Data Points that can be used to calculate the Metrics on company performance. These Data Points are highly granular and each year, analysts collect them from a variety of reliable sources. This year, JUST Capital collected 339 Data Points to calculate the Metrics on companies’ just behaviors.
Company Data Review
Once the Data Points have been collected, JUST Capital provides each ranked company with an opportunity to review its data and submit suggestions for revisions. Over the course of four weeks, representatives from each of the companies we rank are invited to review their data on the JUST Capital Corporate Portal, a secure, web-based comment platform. JUST Capital analysts assess each suggestion submitted by the companies to ensure that all data are accurate, relevant, and consistent with our metrics and methodology and are publicly disclosed.
The fourth and final step of JUST Capital’s methodological approach is producing a cross-industry ordinal rank of each company in our universe.
To construct the Rankings, JUST Capital calculates a series of Metric scores from Data Points, and then averages these Metrics to get scores at the Issue level. In select cases where companies do not have the underlying Data Points needed to compute a Metric Score, we apply a missing data treatment. Data Points are further normalized to account for variations in company size and scale. To account for other cases where a company’s Data Point value or Metric score appears to be an outlier, we winsorize or cap its Metric and Issue level scores. A company’s overall score is then determined by calculating the sum of its scores across all Issues, weighted by each Issue’s importance as derived from the Max-Diff survey results. The overall score directly relates to a company’s rank, where a higher overall score results in a better rank.
In addition to producing an ordinal rank of each company in our universe, JUST Capital also generates an industry-specific rank. A company’s industry-specific rank is obtained by comparing a company’s overall rank to other companies within its industry. Companies with a higher cross-industry rank are ranked higher in the industry-specific rankings.
For more in-depth detail on how we created JUST Capital’s 2021 Rankings, please see our full methodology.