The 100 Best Corporate Citizens

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Our 18th annual ranking of responsible organizations 100 Best based on seven categories and 260 data points is revealed.

Being a good corporate citizen is a goal of most leading organizations, but actually achieving this can be a challenge in today’s business climate. There are many working pieces of a responsible operation—risk management, diversity and inclusion, and the supply chain for example—that make efficient and effective operations quite onerous. So when a company succeeds at being transparent, responsible, and accountable—with all aspects backed up by data—they end up earning a coveted spot on Corporate Responsibility Magazine’s 100 Best Corporate Citizens List.

Compiling the 18th annual list of the 100 Best Corporate Citizens began with our research team documenting 260 data points of disclosure and performance measurements for the entire Russell 1000. The data was gleaned from publicly available information and each company was ranked in seven categories:

• Environment;

• Climate change;

• Employee relations;

• Human rights;

• Corporate governance;

• Financial performance; and

• Philanthropy and community support.

More details on our methodology follow the list.

We offer the companies named to the 2017 100 Best Corporate Citizens List our congratulations. They delivered on their commitments to transparency and accountability in highly competitive industries.

List Methodology

Learn more about the process of how the winners are determined.

Accountability is a key part of corporate responsibility, and it is CR Magazine’s overarching mission. We believe it’s vital for investors, regulators, customers, suppliers, and employees to know as much as possible about the companies they invest in, do business with, and work for.

Our Corporate Citizenship Methodology realizes that task by urging companies to make their information available. Through this process, we put hard data into the hands of the people who have the most direct influence over these companies—and who corporate behavior affects the most.

By advancing accountability and transparency through this research, we allow stakeholders and customers to make better decisions and ultimately evaluate these companies at face value. With this effort, we all move closer to a world where everyone has the information they need and markets function more effectively.

A Group Effort of the CR Community

CR Magazine and the Corporate Responsibility Association (CRA) share a common purpose in advancing corporate accountability and responsibility. Together within direct input from the CR community we’ve developed and manage a fully transparent, objective, fact-based methodology for evaluating corporate accountability and responsibility.

Through its Ranking and Rating Committee (composed of a cross-section of corporate responsibility experts, including active practitioners, academics, NGOs, investment firms, and other relevant communities), the CRA stewards the methodology to ensure its relevance, transparency, and efficacy. The association plays a vital role as a convener, consensus builder, and promulgator of standards and practices. Together the CRA and CR Magazine regularly open the discussion up to public comment. CR Magazine independently verifies the data and publishes it for all to view and use. This simultaneous breadth of input and separation of powers forms the very foundation of our commitment to our own transparency and to advancing accountability and responsibility.

Research

The current corporate universe for all CR Magazine corporate citizenship lists is made up of Russell 1000 companies. The 100 Best Corporate Citizens database is built on publicly-available data sources; all data must be publicly available in order to be included in the data set.

Data

The CR Magazine Corporate Citizenship database encompasses 260 data elements among seven data categories (outlined in the table at the right). The methodology weights the seven data categories differently to account for different relative values, as determined by the Methodology Committee.

Data in each category fall into one of three subcategories:

• Disclosure Ex: Does the company disclose the total amount of energy conserved through its energy conservation programs?

• Policy Ex: Are incentives given to employees for meeting company energy conservation goals?

• Performance Ex: What is the disclosed total water use? Data also take one of two forms, binary or numeric:

• Binary “True” counts as a positive value; “False” and blank fields count as zero values.

• Numerical Numerical values are compared with all other companies’ numerical responses answers in order to generate a ranking. Non-reporters in these numerical cases rank worse than worst numerical respondent in any group.

Data Collection and Analysis

All data in CR’s Corporate Citizenship database are collected and analyzed by IW Financial, a Portland, Maine-based financial analysis firm serving the environment, social, governance (ESG) investment community. IW Financial collects companies’ data from several sources.

Company web sites, sustainability reports, company 10-Ks: IW Financial reviews the entire company website, starting with any CSR/sustainability or similar page or section and branching out across the entire web site to collect all data publicly available there. IW Financial further searches both the company’s own site as well as other sources to find any reports the company has published to glean additional information for the database. IW Financial reviews companies’ 10-K reports filed with the Securities and Exchange Commission (SEC) for additional publicly available information.

Other public sources: Finally, IW Financial regularly reviews other publicly available sources of information in collecting data for the database, including the Toxic Release Inventory, the Emergency Response Notification Systems), the EPA EnviroFacts data set. It also uses Governance Metrics International (GMI), Morningstar, the Carbon Disclosure Project (CDP), Glass, Lewis & Co and The Foundation Center.

Calculating the Rankings

The calculations that ultimately build to the overall ratings start out at the most basic level, the data element. Within any subcategory, each individual data element is equally weighted. For example, all 27 data elements within the climate change disclosure category are equally weighted.

While the number of data elements within any subcategory may be different, the subcategories are equally weighted. For example, there are 22 data elements in the climate change disclosure subcategory, 25 data elements in the climate change policy subcategory and three data elements in the climate change performance subcategory, but each subcategory is equally weighted at 33.3 percent, or a third of the total of three subcategories. For categories in which there are no subcategories, all data elements are equally weighted.

Once IW Financial has calculated the underlying score for each category, they rank order the full Russell 1000 within that category, with one being the best rank. When all categories are ranked, IW Financial applies the category weightings to generate an overall weighted average ranking for each company, again with the lower ranking being the better score.

Loose Ends

Tie gaps: A “tie-gap” happens when several companies are tied for the same score, creating a gap between that score and the next closes score. As in the Olympics, for example, when two competitors tie for the top score, each gets a gold medal, and the next-highest score earns a bronze medal. The silver medal is sacrificed for the “tie-gap.”

Within our ranking, for example, if 26 companies tie for the No. 1 rank, the company or companies in that category that earned a No. 2 rank would actually be placed at No. 27, the next “available” ranking after the gap. Yellow/red cards: Each year, based on the numbers, some companies make the Best 100 List despite some self-caused reputational damage, which usually appears as a pending or completed administrative or official legal sanction. To address those kinds of issues, we use a two-level system—the yellow card for caution; the red card for expulsion.

A yellow card icon next to a company’s listing indicates a caution: a significant but pending investigation/situation, initiated in the research year by a recognized authority. Yellow-carded companies remain on the list without impact on their ranking unless and until the investigation/situation is resolved. Red cards recognize a significant adverse event or judgment in the research year against the company, an event so widely recognized that no reasonable person would expect to find the company on a listing of the best corporate citizens. These companies are excluded from the list for at least one year, and an explanation is included with the full listing.

Derivative Lists

CR Magazine publishes several additional lists that derive from the Corporate Citizenship Methodology and database. All of these lists share the exact same methodology as the 100 Best Corporate Citizens listing, but include additional data slices or processes.

Best Corporate Citizens by Industry

The 100 Best Corporate Citizens by Industry Sector list utilizes the same methodology as the 100 Best. We identify the top 10 companies by industry sector in the following sectors: Climate change, Employee relations, Environmental, Governance, Human rights, Philanthropy and Community Support.

100 Best Ladder Awards

CR Magazine also has an annual Ladder Awards list – the companies in the 100 Best who have climbed the most “rungs”— advancing the most number of spaces on the 100 Best list. We use the same methodology for this list as well. The list is comprised of the companies that have advanced the most places and made the most dramatic developments in their commitment to corporate responsibility and social impact.

Posted April 20, 2017 in 100 Best