Methodology

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Environmental Harm

For each company in our universe, the cost of their environmental damage is the sum of:

  1. Emission Cost. The damage due to their greenhouse gas emissions

  2. Waste Cost. The damage due to their unrecycled waste disposal

  3. Water Discharge Cost. The damage due to their untreated water discharge

 

Emission Cost

The emission cost is the product of:

  1. Emission Intensity. Estimate of the total greenhouse gases emitted per dollar of revenue. Our AI Data Platform provides real-time surveillance of corporate emission indicators which is combined with corporate disclosures

  2. Revenue Forecast. The consensus of industry analysts estimates for 2021 revenue

  3. Unit Cost. Estimate of the cost of carbon capture and storage per metric ton. We view this as a floor for the true damage done by these emissions.

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Waste Cost

The emission cost is the product of:

  1. Waste Intensity. Estimate of the total unrecycled waste disposed per dollar of revenue. Our AI Data Platform provides real-time surveillance of corporate waste indicators which is combined with corporate disclosures

  2. Revenue Forecast. The consensus of industry analysts estimates for 2021 revenue

  3. Unit Cost. Estimate of the blended cost of complete recycling per metric ton. We view this as a floor for the true damage done by this waste.

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Water Discharge Cost

The water discharge cost is the product of:

  1. Water Discharge Intensity. Estimate of the total untreated water discharged per dollar of revenue. Our AI Data Platform provides real-time surveillance of corporate water discharge indicators which is combined with corporate disclosures

  2. Revenue Forecast. The consensus of industry analysts estimates for 2021 revenue

  3. Unit Cost. Estimate of the cost of treating water per cubic meter. We view this as a floor for the true damage done by this discharge.

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Customer Harm

For each company in our universe, the cost of their anti-competitive practices is defined by calculating:

  1. The excess margins due to industry concentration

  2. The impact on product/service quality and pricing

  3. Customer Harm Cost 

The excess margins due to industry concentration

For each company in our universe, we estimate the excess margins attributable to high industry concentration. This utilizes historical relationships established between concentration & margins. We use our data surveillance to define the true competitors and the correct concentration level.

Impact on product/service quality and pricing 

For each company in our universe, our data surveillance identifies how its industry concentration impacts on the quality and pricing competitiveness of its products and services. We examine all sources of customer and third-party opinions, ratings and satisfaction indicators. 

Customer Harm Cost

The overall customer harm cost is estimated using the forecast for 2021 Revenue to define the excess US dollar profit attributable to industry concentration and scale this value higher or lower depending on the severity of the impact on product/service quality and pricing.

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Employee Harm

For each company, the cost of their adverse working conditions is the sum of:

  1. Discrimination Cost. The damage due to gender and ethnicity discrimination

  2. Hostile Workplace Cost. The damage due to workplace-related stress & illness

  3. Job Risk Cost. The damage due to job losses due to poor governance

Discrimination Cost

The discrimination cost for an individual company is defined by:

  1. Global Cost of Discrimination. The amount of foregone GDP as a result of the suppressed contribution to the economy of women and minorities. 

  2. Company Discrimination Index. Our Data Platform provides surveillance of employee views on diversity and inclusion, combined with corporate disclosures. This is aggregated into an Index Level for each company.

  3. Company Discrimination Cost. The contribution to the global cost of discrimination is estimated for each company based on their Discrimination Index.

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Hostile Work Place Cost

The hostile workplace cost for an individual company is defined by:

  1. Global Cost of Workplace Stress & Illness. The overall global cost of workplace stress & illness.

  2. Company Hostile Workplace Index. Our Data Platform provides surveillance of employee views on their workplace, combined with corporate disclosures. This is aggregated into an Index Level for each company.

  3. Company Hostile Workplace Cost. The contribution to the global cost of workplace stress & illness is estimated for each company based on their Hostile Workplace Index.

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Job Risk Cost

The job risk cost for an individual company is defined by:

  1. Governance Index. Our Data Platform provides surveillance of the governance of the company and aggregates this data with corporate disclosures. 

  2. Probability of Default. The probability of default estimated using the relationship between the Governance Index and Default Probabilities.

  3. Employee Cost from Default. The estimated Present Value of the impact on their future income as a result of a corporate default.

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Citizen Harm

For each company in our universe, the cost of their tax avoidance is calculated using:

  1. Statutory Tax Rate

  2. Actual Tax Rate

  3. Tax Avoided 

Statutory Tax Rate

For each company in our universe, we source the statutory tax rate in their jurisdiction of activity.

Actual Tax Rate 

For each company in our universe, we calculate the actual tax rate being paid by the company.

Tax Avoided

The estimated tax that will be avoided in 2021 is the difference between the forecast Net Profit and the Net Profit if the company paid the Statutory Tax Rate.

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