C = Median cost of living where the company’s work is done
P = Yearly pay given at each of six percentiles

“Pay” simply means how much someone at each of the six percentiles is paid for their work. So, how much money does someone at the bottom make in one year, how much does someone at the 10^th percentile make in one year, etc. This includes all forms of compensation—wages, health care, stock, pensions, tips, bonuses, etc.

“Median Cost of Living,” meanwhile, is essentially how much it costs on average to live near one’s job. More specifically that means the amount of money needed to sustain a family of four by paying median housing, utilities, food, transportation, and health care costs in any given locality. If these median costs for a locality do not already ensure adequate access to safe housing, clean water, sanitary waste disposal, the fulfillment of basic caloric needs, a K-12 education for all children in the family, and reliable internet access, then the gap between the average estimated cost of fulfilling any of these basic needs and the actual median living costs will be added to the Median Cost of Living monetary sum for each county/city. This is an important distinction in areas where, say, the average person doesn’t have adequate access to clean drinking water or to the internet. The median cost of living for such a locality would therefore still include however much it costs to install plumbing and internet infrastructure.

Even if a company distributes its pay evenly among all employees (which would score it a high ranking on the Distribution of Wealth metric), this still might not ensure the employees are actually paid well. In other words, it could be the case that everyone gets paid similar yet low amounts. A factory owner in China, for example, could pay all one thousand of his employees the same $5 a day. Surely we would not want to just reward such a company with high rankings for its equality of pay if the employees don’t make enough to buy food and pay rent. On the flip side, a company could get a low ranking on the Distribution of Wealth ranking even while it actually still pays its lowest employees rather well compared to their peers. A US car company might, for example, pay its executives hundreds of millions yet still pay its factory workers more than those who assemble cars in Japan and Korea. That company should still get low rankings for its poor distribution of pay, sure, but it should also be rewarded for giving its factory workers enough to live well.

Thus, in addition to the Distribution of Wealth metric we have the Pay Relative to Local Standard of Living metric. The PRLSL metric ranks each company by how well its lower-paid half of workers can get by on their salaries.

It’s important to note here that many would defend such low-paying jobs in the market because, hey, we all start somewhere. That low pay should then motivate you to pull yourself up by your bootstraps and fight for something better, they say. To some degree that’s absolutely true. Some amount of inequality in the workplace is quite a healthy motivator. Why would anyone go back to school and apply for new, more difficult jobs if it didn’t mean getting higher pay? That being said, though, some people will always have to work the lower-paying jobs. Someone will always have to be the one to serve the food, to sweep the floors, and to answer the phones. Shouldn’t those hardworking someones still be paid enough to live decent lives? As income inequality rises, however, getting enough pay to make ends meet becomes harder and harder for those at the bottom. The PRLSL metric would work to reverse that trend.

More specifically, the PRLSL metric pushes companies to do two important things. First, it encourages them to pay their workers well enough to get by even where it’s more expensive to live. Want to locate a hedge fund office in Manhattan? Okay, great. However, the cost of living there is much higher than it is in, say, Ohio. So if you want to pay your janitors and security guards the same $10 wage that you do at your Cincinnati office, then be prepared to get a lower CR Ranking with the PRLSL metric. Like all other companies, that hedge fund would be pushed to pay its low-wage workers enough to get by, even in more expensive locations.

Second, the PRLSL metric would push businesses to legitimately pay their low-wage workers well where the cost of living is lower, too. In other words, businesses often move their operations to places where the cost of living is low. If your employees would pay less for rent in Cincinnati, then why not move the business to Cincinnati because you won’t have to pay as high of salaries for your employees to live just as well? For the most part such trimming of costs just makes good economic sense. After all, it means cheaper products for the rest of us to buy. The problem is when moving jobs to where the local cost of living is the lowest turns into exploitation. Moving your jeans company to Bangladesh to take advantage of a lower cost of living isn’t necessarily bad in itself. What’s bad is to not pay these workers enough to escape substandard housing and to have decent health care. At $19 a month,^1,2 the minimum wage often paid to factory workers there is definitely not enough to afford such basics. The PRLSL metric would push such companies to shape up and pay livable wages no matter where its workers live.

For more on the benefits brought from the Pay Relative to Local Standard of Living metric, see the Problems CRR Would Help Fix within the Why CRR page—specifically the sections on Income Inequality, Diseases of Poverty, Racial Pay Gap, Obesity Rates, and Exploitation of Unpaid “Internships.”

E = Total number of full-time employees (with each part-time employee counting as a fraction of one relative to how many hours were worked during the year)
F = Fault of employer for illness, injury, or death, as judged subjectively by physician or, when self-reported, employee on a 0 to 10 scale
I = Number of injuries, illnesses, and deaths per each type
P = Total number of points from seven Employee Rating of Safety & Health questions given to all employees (part-time employees will have their points multiplied by same fraction used to calculate E, that is, the part-time worker’s yearly hours as a fraction of the average full-time employee’s yearly hours)
S = Average severity of each injury/illness type, as assigned subjectively from 0 to 100 by the CRB

The first half of the Safety & Health metric ranks companies by the number of work-related injuries, illnesses, and deaths it has helped cause in the prior year. These ailments would be those reported by the business itself, by any physicians that see the employees as patients, and/or by the employees themselves. The fewer injuries, illnesses, and deaths per one hundred employees (and the less harmful the illnesses and injuries at that), the higher the CR Ranking.

The second half of the Safety & Health metric will rank a company by how well its employees rate its protection of their safety and health. Seven questions will be added to the Individual Tax Return that every working American fills out every year, each to be rated from 0 to 10:

• How well do you feel your company ensures your safety at the workplace, specifically in terms of providing proper housing and equipment?
• How well do you feel your company ensures your safety at the workplace, specifically in terms of keeping the workplace free of hazardous materials and chemicals?
• How well do you feel your company ensures your safety at the workplace, specifically in terms of preventing and punishing harassment and assault (sexual or otherwise)?
• If you work full-time (35 or more hours a week), to what extent would you say you are overworked (i.e., made to work more hours than you desire and/or have requested to work)?
• How well do you feel your employer provides healthful food and beverage options at work and/or makes it easy for you to provide such healthful options yourself?
• To what extent does your employer give you the time off and scheduling flexibility to consistently take care of your family, health, and career development needs (all without punishing you for doing so)? This includes but is not limited to:
  • Child care
  • Caring for an ailing relative
  • Physical exercise
  • Mental health breaks
  • Pursuing a degree or other outside education
• How would you rate your average on-the-job stress levels?

As with all other CRR metrics, the average overall score per employee for each company with these seven questions will then be ranked relative to all other companies.

On top of those two measures, the CRB would also have the right to subjectively reduce (or increase) a company’s Worker Safety & Health ranking based on that company’s listed violations of safety standards, as provided by the Occupational Safety & Health Administration or any other applicable government agency.

That would first mean bringing up the safety standards of unsafe workplaces, mostly those overseas where regulations aren’t as strict as they are here in the US (like the decrepit factory that collapsed in Bangladesh in 2013 and killed over a thousand people).

However, it would also mean getting companies everywhere to go far beyond the bare minimum that they now strive to merely pass. Despite the rules we currently have on the books for worker safety, businesses still regularly expose their workers to plenty of toxic chemicals. Employees regularly get injured and even die in preventable accidents. Our workforce is chronically overstressed. Our inflexible work schedules tend not to allow enough time for physical exercise. That same scheduling inflexibility is also one of the leading reasons that women get paid less than men. All of these problems put quite an unnecessary burden on our workforce and drive up our already-out-of-control health care costs. The Worker Safety & Health metric would push businesses to not just pass local safety laws, but to go much further, to do everything they can to improve the safety and health of their employees.

For more on all of the positive change that the WS&H metric would bring, see Problems CRR Would Help Fix in the Why CRR page—more specifically the sections on National Health Care Bill; Gender Pay Gap; Cancer Rates; Workplace Harassment and Assault; Obesity Rates; and Workplace Injuries, Illnesses, and Deaths.

SUD = Service Unit Dollars = (Total service units sold) x (Universal mean price per service unit)
CDE = Carbon Dioxide Equivalent =
C_D = Carbon dioxide equivalent released per square mile of land destroyed, per ecosystem type
C_E = Tons of carbon dioxide equivalent released per one kilowatt of electricity in location of product sale (given breakdown of electricity sources there)
C_g = Tons of carbon dioxide released per one gallon of gasoline burned
D = Net destruction of all land, in square miles and by ecosystem type and location
E = Total yearly electricity consumed by company (in kilowatts)
E_P = Electricity consumption per hour of use per specific product (in kilowatts)
F = Amount of fuel directly burned, in kilograms and by fuel type
f = Tons of nitrogen fertilizer used
G_F = Tons of each greenhouse gas directly or indirectly produced per kilogram of fuel type burned
G_E = Tons of each greenhouse gas directly or indirectly produced per kilowatt of electricity produced, per type of electricity source (i.e., coal vs solar vs nuclear, etc)
g = Gasoline consumption per hour of use per specific device (in gallons)
L = Livestock owned, per type of animal
l = Estimated average product lifetime of all service units in that category (in years)
M = Tons of methane produced per year, per animal type
N_f = Tons of nitrous oxide produced per kilogram of nitrogen contained in fertilizer
P = Percentage of company’s electricity coming from each type of energy source (i.e., coal vs solar vs nuclear, etc)
S = Service Units
U = Average usage per year of one item in that service unit category (in hours)
W_G = GWP of greenhouse gas in question
W_M = GWP of methane
W_N = GWP of nitrous oxide

*GWP is a gas’s Global Warming Potential, which tells us roughly how much one ton of that gas warms the planet versus a ton of another gas. Carbon Dioxide has a GWP of 1 since it’s the baseline unit that all others are compared to. Methane has a GWP of about 32. Nitrous oxide is about 281, etc. GWP numbers are always estimates, but CR rankings would be based on the best, most recent estimates (i.e., by default the IPCC’s latest GWP estimates for a 100-year timespan).

The general formula for all of the Environment metrics is Service Unit-Dollars / Environmental Impact. In other words, the more environmental impact a company has per one dollar’s worth of product it creates for the world, the lower its ranking will be. For a company’s Carbon Footprint, that means the more tons of carbon dioxide it creates per one dollar’s worth of computer it sells—or per one dollar’s worth of bicycle, toothbrush, or whatever—the lower its Carbon Footprint ranking.

Carbon Dioxide Equivalent essentially means the total tons of carbon dioxide produced. The only difference with CDE is that all warming gases other than CO₂ (like methane or nitrous oxide) are also converted to how many tons of CO₂ would be needed to get the same warming effect and then added to the CDE total. The CDE formula thus equals a company’s total global warming impact—from all fuel burned, electricity used, livestock kept, fertilizer used, forests cut down, and products used (i.e., the electricity and fuel consumption directly used by the products a company sells). So for Ford, that last part means its Carbon Footprint ranking accounts for the warming effects of not only the making one of its trucks but also the average amount of gasoline such a truck would use throughout its lifetime. The same goes for the electricity or battery use of, say, a vacuum cleaner, dishwasher, or any other power-using device.

For more on global warming and the impact CRR would have on it, see our more detailed discussion of the issue in Problems CRR Would Help Fix in the Why CRR page.

H = Harmfulness factor for each pollutant
P = Tons of each pollutant

In other words, this metric measures the weighted harm done per service unit-dollar by all non-greenhouse air, water, and land pollutants. The harm of each pollutant is calculated as the tons of said pollutant produced per service unit multiplied by the weighted harmfulness factor. A pollutant’s harmfulness factor is a number which gives its relative harmfulness to the world as compared relatively to all other known pollutants. The CRB will create, manage, and regularly update a list with the HF of all known pollutants, giving a score of 100 to what is believe to be the most harmful then ranking all others subjectively from 0 to 100 accordingly. This list will be made using any and all available scientific knowledge of each pollutant for guidance.

For more on what the Non-Greenhouse Pollution metric would accomplish, see Problems CRR Would Help Fix in the Why CRR page. More specifically, check out the sections on Antibiotic Resistance; Nuclear Waste; Cancer Rates; Outdoor Air Pollution; Cultural Eutrophication; Wetland Destruction; Mountaintop Removal; Acid Rain; Species Endangerment and Extinction; Accumulation of Plastic in the World’s Oceans; Landfills; Workplace Injuries, Illnesses, and Deaths; and Toxic Chemical Ingestion.

The denominator portion of formula should be run for each type of material produced, with result from each added up for the final denominator. (We would have more accurately shown this here with subscripts 1, 2, etc, but that would’ve made an already rather complex formula maddening to look at and comprehend.)

c = Percent consumer frequency of recycling material versus throwing it in trash (weighted average in localities of sales)
e = Ease of separating and recycling the recyclable parts of product/packaging (on 0-5 scale, to be decided subjectively for each product by CRB)
f = Percent of material sold in localities with both free municipal pickup of material and recycling facilities to process the material
M = Tons of material produced
m = Tons of material recycled directly by company
n = Average number of times material type can be successfully recycled before becoming trash
t = Time in years for material to biodegrade

The Biodegradability and Recyclability metric probably has the most tricky math of all the CRR metrics. As with the other Environment metrics, the general formula is Service Unit-Dollars / Environmental Impact.

Overall, that entire denominator combines together to form an estimate of the mass of unrecycled and non-biodegradable material produced. We get this by combining three parts: first, the mass of the material type in question that is not recycled directly by the company M – m[n/(n+1)] multiplied by, second, the average estimated percent of the remaining mass that will not end up being recycled by the consumer [1 – n/(n+1) x f/100 x c/100 x e/5] multiplied by, third, the unrecycled mass’s non-biodegradability factor [t²/(t²+500)] that is, by how much that material will not biodegrade. What we get afterwards is the estimated amount of material left over that will not be recycled or biodegrade. Each company is then ranked by how much such material is created per service unit-dollar (i.e., per amount of service provided to the world).

The Biodegradability & Recyclability metric would push companies to make their products steadily more biodegradable and recyclable. This metric would, in other words, push companies to start caring not just about how much the consumer will like their product, but also about how their products will affect the world once they’ve been thrown out. The B&R metric would bring cleaner oceans, fewer landfills, more efficient use of waste, and less global warming.

To learn more about all of the good that the Biodegradability & Recyclability metric would do, see Problems CRR Would Help Fix in the Why CRR page. More specifically, take a look at the sections on Species Endangerment and Extinction, Accumulation of Plastic in the World’s Oceans, and Landfills.

S = Water scarcity factor
SUD = Service unit dollars
W = Total liters of water used

The Water Scarcity Factor is a number from one to five that the CRB would designate for all locations globally. The factor ranges from areas of the most plentiful water (1) to the greatest water scarcity (5).

The only added layer here is the Water Scarcity Factor. The more scarce water is where a business uses it, the more any water use will count towards that company’s Water Use ranking. So, in other words, using one liter of water in the desert will count the same as using five liters in an area of plentiful water. That way, companies are incentivized to be extra careful with their water use in drier areas—and, really, to start moving more of their water-intensive activities to wetter areas.

Agriculture and industry alone account for 88% of all global water use,³ and yet quite a lot of that water gets wasted. An estimated 60-70% of water used by farms, for example, never even makes it to the crops thanks to issues like leaky irrigation channels, evaporation, and water inefficiently draining straight into rivers.^4,5 CRR’s Water Use metric would push businesses to use less water and to then be more efficient with the water they do use.

For more on the ways the Water Use metric would positively affect the world, check out the Water Scarcity section of Problems CRR Would Help Fix in the Why CRR page.

e = Percent of total employees working in each locality
R_E = Total corporate tax rate in each locality where employee(s) work
R_S = Total corporate tax rate in each locality where products/services have been sold
s = Percent of total sales completed in each locality
T = Total corporate taxes paid

To calculate this metric, we first assess a company’s effective tax rate, or in other words what percentage of its income did it pay in taxes to various applicable governments. This percentage would then be compared to the actual average tax rate, first, where the company’s employees work and, second, where it sells its products and services. So a company with an actual tax rate of 25% that pays the full 25% would do well here. On the other hand, a company that hides its money in tax havens overseas to avoid paying what it should will rank quite poorly in this metric.

To read more about what the STTB metric would do for our communities, see Problems CRR Would Help Fix on the Why CRR page. More specifically, check out the sections on Corporate Tax Avoidance and National Deficit and Debt.

D = Total donations to charitable organizations (in money, goods, and services)
R = Total yearly revenue

Donations would obviously include money, but also goods and services. If a grocery store wants to donate excess bread to a food bank or a consulting firm wants to donate its consulting expertise to a non-profit, great! The world should benefit just as much from these donations as from direct cash.

Upon hearing of the need for more charitable funding, though, most people lament that we citizens should be giving more. Well, perhaps we should, but we actually on average already give over 5% of our income to charity.^7-9US corporations, on the other hand, made over eight trillion dollars in profits in 2015 but only gave a tiny sliver of those profits (0.98%) to charity.^10-12 Arguably corporations should keep the majority of those profits, to invest in new products, research, etc. But just 0.98%?! For a lot that loves to brag in cheesy commercials about how profoundly giving they all are, that’s abysmal.

With the Charitable Giving metric, CR Rankings would encourage companies to give more, to compete to see which company could give the largest percentage of its profits to charity. Most companies can clearly afford to give more, and with this push from the CG metric we could eventually see a doubling, tripling, or even bigger increase in the amount of money given to charities each year. That’s a huge boost for innumerable great causes.

For more on the good that the Charitable Giving metric would do, see Problems CRR Would Help Fix in the Why CRR page. More specifically, check out the sections on Food Waste, Funding for Charities, Cancer Rates, and Landfills.

E = Total number of full-time employment positions filled at company in question (with each part-time employee counting as a fraction of one full-time employee relative to how many hours were worked during the year)
M₅ = Number of employment positions that have been terminated or relocated at least twenty miles away in the past five years
M₁₀ = Number of employment positions that have been terminated or relocated at least twenty miles away in the past ten years
M₁₅ = Number of employment positions that have been terminated or relocated at least twenty miles away in the past fifteen years

As is the case with all other metrics, the higher the number that comes out, the higher the ranking. Ranking companies by how many jobs are terminated or moved, though, would initially give out rankings in the opposite order. Thus to flip the numbers, we subtract each of those numbers from one (just like we do with the Distribution of Wealth metric). We then add all three of the resulting numbers and divide by three to get the average.

So if your offices and factories have stayed put in the same places for decades, then you will rank well with the JLS metric. Move your jobs to different states or countries every time you hear of some slightly cheaper tax rate, then you won’t do so well. More specifically the JLS metric would rank companies by the percentage of employee positions eliminated or relocated at least twenty miles away from the previous location in the last five years, ten years, and fifteen years.

So much of what makes for a strong community is stable, reliable jobs. Such jobs allow a community’s workers to have a sense of security and to work their way up in the world without having to uproot and cut ties with friends and family if they don’t want to do so. The more companies globalize, though, the more easily they can move their jobs around according to whatever the slight economic benefit of the week is. While that job movement might make the company a bit more money, it can wreak havoc on our communities. When a factory or office division shutters its doors to go somewhere else, it often leaves that town to suffer higher unemployment, a decreasing population, and a bevy of psychological disorders like depression and opioid addiction. Corporations will inevitably have to end some job positions and move others, but this metric encourages them to only do so when it is truly necessary.

For more on the problems the Job Location Stability metric would help fix, see Companies Abandoning Communities in the Problems CRR Would Help Fix page.

Such additional factors include but are not limited to:

Workers

• Discrimination in hiring, firing, or pay (i.e., on the basis of gender, race, religion, sexual orientation, age, or national origin)
• Not delivering on any promised payments or misleading workers about the nature of any such payments (e.g., health care options, pensions, overtime pay, severance pay, maternity pay, stock options, etc)
• Violation of local child labor laws and/or exceeding basic guidelines on child labor set forth by the International Labor Organization
• Evidence of sexual harassment and/or assault that goes beyond what the Worker Safety & Health score reflects, including specific claims of harassment and/or assault reported by individuals directly to the CRB

Environment

• Doing irreparable damage to the environment, in solitary or continued acts that are above and beyond that of normal pollution (e.g., mountaintop removal, rainforest destruction, wetland destruction, oil spills, any other actions contributing to species endangerment or extinction, etc)
• Pollution that more directly endangers human health than usual (e.g., the release of toxic chemicals directly into waterways and/or in the near proximity of homes or workplaces)
• Positive projects that help mitigate or undo environmental damage done (e.g., carbon sinks, wetland restoration, land conservation, donation to alternative energy research, etc)
• Invention of new technologies that lead to greater environmental sustainability beyond the company’s direct reach

Community

• Injuries, sickness, or other direct harm done to consumers by the company’s products or services
• Development of new vaccines, drugs, and other treatments for diseases of poverty

In general, as well, these additional factors include any company’s attempt to subvert the government’s collection of data to construct these Corporate Responsibility Rankings

In other words, this metric handles all corporate behavior that isn’t quantifiable and/or universal. As mentioned above, to work as one of the main metrics for CR rankings, a measure of irresponsibility must be both quantifiable and universal. That is, such a metric must be measurable with objective data and must apply to most if not all companies.

For instance, pretty much every business pollutes, pays taxes, uses water, etc. Furthermore, such actions are measurable with objective data. Each company generates a specific number of tons of each pollutant. Each company pays a certain number of dollars in taxes. Each company uses a certain number of gallons of water. A company could always try to illegally fudge the facts a bit with such metrics and might even get away with it every once in a while, sure, but ultimately what matters most is that we can actually get objective, rather accurate measurements that apply to pretty much all companies.

However, there will inevitably be other important factors of responsibility that that don’t quite fit those two basic requirements of being both quantifiable and universal. For example, consider an oil spill like the Exxon Valdez catastrophe of ’89 or the more recent Deepwater Horizon oil rig explosion in the Gulf of Mexico. Such oil spills caused massive environmental damage to the ecosystems involved, and the perpetrating companies should rightly deserve to have their rankings docked in such situations (had CR Rankings existed at the time). The problem, though, is that any attempt to quantify the damage done would be, at best, awkward and inevitably rather inaccurate. The simplest task of all, assessing the number of gallons of oil spilt into the gulf in the more recent spill, proved hardly simple at all. At the time, British Petroleum estimated 1,000-5,000 barrels of oil were gushing out a day.¹³ The Flow Rate Technical Group, on the other hand, estimated a quite different 62,000 barrels a day.¹⁴

In addition to not being easily quantifiable, oil spills also fail the other main requirement of a standalone metric: being universal. How many other companies have been involved in oil spills? Almost none. This is an important distinction because CR Rankings work by being relative. Each company is compared to all others with each factor of corporate responsibility. How much carbon dioxide does it create compare to all other companies. How well does it pay its workers compared to all other companies. You cannot rank companies relatively, though, with a factor that only applies to a random few companies and no others. It would make little sense, in other words, to create an Oil Spill metric where 99.9% of companies get perfect 10’s, with Exxon-Valdez and BP put down in timeout at the bottom with 0’s. What good would that do? The same goes for many other instances of corporate irresponsibility that are clearly bad but are hardly universal and, therefore, very hard to include in data-driven comparisons: mountaintop removal, child labor, human trafficking, wetland destruction, etc. As such, the Additional Factors metric will add or subtract points from any company’s rankings for all such factors beyond the scope of CRR’s other metrics.

One key way companies could boost their CR Rankings with the AF metric would be innovation points. Any company that makes discoveries that would help the world at large (beyond the good derived from its own direct actions) would be rewarded with innovation points. Those points would then translate to higher CR Rankings. New green energy technologies and new treatments for diseases of poverty, for example, would garner high innovation points. Note that this isn’t the same as just buying new, more energy-efficient truck engines and using them in your shipping fleet. If you design that more energy-efficient engine, though, then your design will go to carbon reductions among shipping companies that use your new type of engine all around the world, and thus your company would earn innovation points. For more on innovation points, see the Additional Notes section below.

For more on what the Additional Factors metric can accomplish overall, check out Problems CRR Would Help Fix in the Why CRR page. More specifically check out the sections on Global Warming, Rainforest Destruction, Diseases of Poverty, Gender Pay Gap, Racial Pay Gap, Antibiotic Resistance, Child Labor, Wetland Destruction, Mountaintop Removal, and Species Endangerment and Extinction