If you want financial information about public companies, there are plenty of places to go. Yahoo Finance, for instance, lists everything from profits and expenses to price-earnings ratios and major shareholders. But if you want to know if a company pays its workers properly? Good luck. In fact, across a range of social issues—from worker treatment to community involvement—there's barely any good data available at all.
It's this gap that Just Capital aims to fill, and it has a strong argument for why such information should be public: The people want it. Through large surveys, it finds that Americans are increasingly wary of corporations and hungry for information on "justness" issues. Last year, it found that 51% of people think "corporate America" is going in the wrong direction, that 54% "distrust" corporations, and that 42% think companies have become "less just" over the past decade. A strong majority (62%) still thinks business is generally good for the country. But many Americans want to see corporations do better by their workers, their community, and the environment, and to be transparent about it, Just Capital says.
"Our idea is to provide a series of information points and analyses that the American public has said is important," says Rob Brown, the firm's head of research. "If the public says something is important, and they're employees, consumers and investors, it's hard for a company to say that it's irrelevant to how they run their business."
Founded by the hedge fund manager Paul Tudor Jones, Just Capital has spent the last two years surveying the nation (it spoke to 43,000 people last year). Its initial poll identified 188 corporate "justness" issues Americans cared about. Then, a second poll narrowed that down to 36 issues grouped in order of importance. This November, it plans to release its first company ranking, with the issues weighted accordingly. Pay and benefits topics, including whether companies offer 401K plans, health insurance, or paid time off, are likely to be uppermost.
The ranking differs from others that look at reputation or sustainability issues. These tend to focus on "material" non-financial issues that could affect the bottom line (like, say, a company's climate change risk). Just's work focuses on wider issues of fairness—how well a company treats its workers and local community.
"To be relevant, a lot of the sustainability movement has focused on financial materiality," says Martin Whittaker, Just Capital's CEO. "We're not saying these 36 elements of justness are all material. We're not doing this to create an investment signal or boost shareholder value. We're shedding light on what the public cares about." (Whittaker says if the public had said it cares only about money, it would have focused on that, though it's a little hard to believe.)
Coming up with hard, comparable numbers across the 36 categories is a big challenge. Take the issue of whether companies pay a "living wage"—that is, enough money to cover standard expenses. Three quarters of respondents to Just's survey said companies had a duty to pay workers at such a level. But companies generally don't disclose data on pay, because they're not required to.
To get around this, the organization goes through a multistep process. First, it looks up a company's locations in MIT's Living Wage Calculator, which shows what it costs to live in every county. Then, from local tax filings and other sources, it works out how many employees a company has in each location. Then, it scours postings on Glassdoor and LinkedIn for actual wage data. And then, finally, it checks its findings against Bureau of Labor Statistics wage averages for the type of work involved.
Given the complexity, Just Capital is a little of wary of getting its data wrong at launch time. So it will probably start modestly, ranking only some companies in each sector. Companies will be split into industries and you won't be able to compare, say, the No. 3 company in software with the No. 3 company in oil and gas, Whittaker says. The firm hopes to release its full Just100 list in 2017. In the meantime, it wants to get feedback on its methodology so far.
The big question is whether more and better information will help shift corporate behavior. Some people argue that the problem isn't informational; it's that corporations are legally obliged to serve shareholders before stakeholders, whatever people working there might think or say. But Brown and Whittaker say better data helps executives make the case for enlightened action, both internally and externally.
"We talk to a lot of executives, and they say they'd like to do something but they need cover, they need an excuse," Brown says. "Their M.O. is to satisfy shareholders on a quarterly basis. But they know there are other stakeholders, and that they should be better actors. We're trying to help."
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