On this page we provide answers to some of our most frequently asked questions. If you have a question about the Global 100 that is not listed below, please contact us at email@example.com
How is the Global 100 decided?
The Global 100 is determined through a two-step process. First, all companies in the starting universe are put through four screens. The companies that pass the screens constitute the Global 100 shortlist. Second, all companies in the shortlist are scored on the ‘priority KPIs’ for their respective industry group. A priority indicator is any of the 12 key performance indicators (KPIs) used in CK’s research model that was disclosed by at least 10% of all companies in a given industry group for 2011.
The Global 100 is comprised of the top-performing companies in the shortlist, subject to the number of slots reserved for each sector. Slots are reserved on the basis of each sector’s contribution to the total market capitalization of the MSCI All Country World Index (ACWI), the benchmark for the Global 100.
Who is eligible to be ranked on the Global 100?
For the 2013 Global 100, all publicly traded companies that had a market capitalization in excess of US$ 2 billion as of October 1, 2012 were considered.
What do you measure?
The Global 100 is the most transparent and quantitatively driven corporate sustainability assessment in the world. The ranking measures companies on those sustainability indicators that are the most widely disclosed in their respective industry.
How can you compare a bank to a mining company? Their operations are completely different.
In the same way that Grade Point Average (GPA) is used to compare the academic performance of an engineering student and a political science student, the Global 100 compares the sustainability performance of companies using a set of industry-specific metrics. While companies from all geographies are eligible for consideration in the Global 100, companies are only evaluated against their same-industry group peers. Banks are assessed against other banks, and mining companies are assessed against other mining companies. It is not until all companies have been scored on this basis that they are sorted in descending order based on their Global 100 score.
Where do you get your data?
We collect most of our data from corporate sustainability reports, financial statements, MD&A disclosures and proxy statements. Data are collected through a combination of primary research and secondary research (Bloomberg).
How are the KPIs weighted?
Since companies are only scored on those KPIs that have been determined to be ‘priority KPIs’ for their respective industry groups, the weight of a given KPI can be different for companies in different industry groups. In industry groups where all 12 KPIs are ‘priority KPIs’, each KPI will have a weight of (100%/12) = 8.3%
What happens if a company doesn’t disclose a data point?
If a company does not disclose data on a non-priority KPI, there is no bearing on its score. If a company does not disclose data on a priority KPI, it effectively receives a score of 0 for that KPI, thereby reducing the probability that it will qualify for the Global 100.
How does the Global 100 correspond with the GRI?
All 12 KPIs used in the Global 100 have corresponding GRI codes.
What year’s data is considered in your rankings?
In the 2013 Global 100, we are using 2011 performance year data.
What distinguishes the Global 100 from other rankings?
The Global 100 differs from other corporate sustainability rankings in four key respects. First, Global 100 scoring is based on a company’s performance vs. its industry group peers, which we believe is the best reflection of an industry’s resource demands (e.g. it allows us to compare banks to mining companies). We don’t want to suggest that one industry is inherently more “sustainable” than another, although this might be true – rather, we want to recognize those companies that have gone above and beyond. Some other rankings don’t score in this relative context and may, for example, be quite heavy on financial, telecom, and IT firms. Second, the Global 100 is based on performance, and uses a 100% rules-based, transparent framework, based on objective metrics. Other raters look at a broad array of factors, including qualitative aspects like the existence of policies. Third, we’ve gone with a “less is more” philosophy (maximum 12 metrics), scoring companies only on those metrics that are disclosed by a critical mass of their industry group peers. This ensures there is a solid basis of comparison, and it makes the results much easier to understand for all parties. Finally, the Global 100 is based only on publicly-disclosed data (not a submission). There are a lot of benefits to this: everyone can participate, it’s transparent, and it rewards good disclosure which we believe is an essential ingredient for the capital markets to reward high-performing companies.
Does the Global 100 methodology change from year to year?
Yes, the methodology is updated from year to year to reflect changes in corporate reporting practices as well as new information and data about the financial materiality of all KPI-Industry Group match ups.
Any changes to the Global 100 methodology must be approved by the Global 100 Council of Experts.
The table below outlines recent changes to the methodology.
|Subject||Old methodology||New methodology||Rationale|
|Selection of KPIs||•Companies scored on all KPIs||•Companies only scored on ‘priority KPIs’ for their respective industry groups||•KPIs differ across industries in terms of their financial materiality and their prevalence in corporate disclosures.|
|Number of KPIs||•Ten KPIs were used in the 2011 Global 100. An eleventh KPI –Employee Turnover- was added to the 2012 Global 100.||•A twelfth KPI –Pension Fund Status- was added to the 2013 Global 100. However, companies may not be scored on all twelve KPIs (see above).||•Corporate Knights closely monitors trends in corporate sustainability disclosure practices. In line with previous years, new KPIs may be added to future iterations of the Global 100.|
|Screening criteria||•Corporate Knights used a variety of partners to perform an initial screen, which reduced the starting universe to a shortlist||•Companies in the starting universe are screened by Corporate Knights for disclosure practices, financial health, product category and financial sanctions.||•The screening process has been brought in house, such that Corporate Knights can transparently document the Global 100 universe at each project phase.|
|Percentage Tax Paid||•Cash tax / taxes owed at statutory rate
•Ratio measured over trailing four year basis
|•Cash tax / EBITDA •Ratio measured over trailing five year basis||•Through stakeholder engagement we identified several problems with statutory tax rate as a normalizer. These included discrepancies across geography, and challenges with blended revenues. EBITDA is a clearer and more appropriate normalizer.•Five year window is now used in all KPIs that use trailing averages|
|Leadership Diversity||•Percentage of a company’s board comprised of female directors•No percent-ranking||•Percentage of a company’s board comprised of female directors AND percentage of a company’s senior executive team that is comprised of female managers
•Companies percent-ranked against industry-group peers
|•Boards of Directors tend to be relatively ‘illiquid’, and the diversity strategy at many firms is focused on management•A blended assessment provides a more accurate snapshot of corporate strategy•Percent-ranking is now consistently used across all KPIs, with single exception of Clean Capitalism Pay Link.|
|Pension Fund Status||•Not part of the set of KPIs||•Total liabilities / total employees ratio used as meta-screen•For qualifying companies, companies scored on (Total assets / total liabilities) / market capitalization ratio||•Retirement benefits are an important facet of a company’s commitment to its workers|
|Safety Performance||•Revenue / (Number of fatalities x $US 1 M) + (Number of lost time incidents x $US 1 k)||•(Percent-rank of lost time injury rate x 0.5) + (Percent-rank of fatalities / total employees x 0.5)||•Through stakeholder engagement we identified several problems with previous approach of assigning arbitrary financial value to each ‘fatality’ and ‘lost time incident.’•The renamed Safety Performance (from “Safety Productivity”) indicator reflects this methodological change|