Here’s What New in the 2018 Rankings Methodology

December 9, 2018

2018 Polling Updates

The priorities of the American public remained largely unchanged from 2017 to 2018. Overall, some issues are slightly higher in 2018, which means others are slightly lower, but the changes are small. This consistency shows that the American people are steadfast in their values and what they think defines a just company. Here are the year over year changes:

As they did last year, Americans placed the most importance – 25% – on worker pay and treatment in this year’s survey, and therefore this issue will comprise a quarter of a company’s overall score in our 2018 Rankings model. Across demographics, there is striking consistency, with groups prioritizing the needs of workers at roughly 25%.

To see the complete list of Issues, Components, and their prioritization, which power our Rankings model, please download the 2018 Survey Report or visit the Issues section of our website.

2018 Methodology Enhancements

Identifying the best data to collect, analyze, and rank companies is an evolving art and science. We are always looking for ways to improve our approach and converge on a more fine-tuned and comprehensive model. There are two main ways we improved the methodology in 2018 to provide more accurate measures of just business behavior:

Enhanced in-house data collection

In an effort to increase transparency, data quality (more accurate representation of the priorities of American people based on our polling), and coverage (number of companies with data points), we identified better ways to measure data within several issues by bringing more collection in-house and reducing the amount of data coming from third-party vendors.

Increased data precision

To add more precision to the model wherever possible and to differentiate high performers from others, we changed the way we scored companies on specific data points, moving away from binary scores to scaling grades for evaluating companies.

Enhancements to Each Issue Area

Workers

Our survey and focus groups identified that the American population today cares about issues we did not specifically measure in 2017, such as whether a company has paid parental leave, tuition reimbursement, or a outplacement services policies. Our model now integrates these new data points into the model. We also found a better way to measure a company’s commitment to ensuring a safe workplace, and are now collecting this data in-house rather than using a third-party vendor.

Customers

In an effort to increase data quality and coverage, we changed our data sources for evaluating customer service ratings.

Products

In 2018, we changed the way we assess whether companies make products that are beneficial to health, environment, or society. This year, we polled the American public to determine what products were more or less just, and we scored companies based on whether they offer such products. This year, we also improved our methodology for recalled products. We now include in our analysis the number of incidents reported, the number of products recalled, the company’s overall revenue, and its responsiveness (how many months the product was on the market). This new approach provides a better way to level the playing field and reflect the scale of the recall.

Environment

Measurement on this Issue changed substantially this year. We discontinued use of third-party data that aggregated performance across a range of environmental criteria and switched to sources that provide more specific coverage. We changed vendors for the Minimizes Pollution Component to allow us to have a more comprehensive view of companies’ greenhouse gas emissions. In 2018, we stopped measuring companies’ overall water usage and instead honed in on measuring their chemical (cancerous and non-cancerous) water discharge. We also stopped measuring electricity and fuel usage, focusing more on pollution outputs instead of resource inputs.

Jobs

Through our survey and focus group work, the American people identified that creating jobs on a global scale mattered when defining just corporate behavior. As a result, we introduced a new Component this year – Creates Jobs Globally – which accounts for 13% of a company’s Jobs score.

Communities

As part of our efforts to enhance data quality and precision related to Communities, we focused on measuring more granular nuance. The scoring of a company’s supplier code of conduct is more detailed in 2018, enabling us to better distinguish companies with more robust policies. We have also diversified and added more specificity to our measures of charitable giving, moving away from binary scores in areas such as corporate giving sources and employee gift matching, to more nuanced scaling grades. Companies that offer matching employee gifts programs for a wide range of causes receive a higher score than those that only match giving to select causes or institutions, or companies that do not have an employee gift matching policy.

Company Leadership and Shareholders

This year, we made adjustments for one-time tax expenses and benefits related to the Tax Cut and Jobs Act, which did not exist in prior years and added a new measurement of whether a company discloses a tax strategy that is in line with best practices. We also improved our board diversity evaluation to exclude diversity of nationality (country of birth), which experts agree is not the best measure to represent what people understand as diversity.

There’s no doubt that this work represents a much-needed improvement to the status quo for tracking and analyzing companies on the issues that matter most to the American public. We will continue to refine it as we learn more, and as companies increase transparency and data disclosures.

For additional detail, please read the Full Ranking Methodology.

If you have feedback or questions about our Methodology: We want to hear from you!