Frequently asked questions about the Responsibility100 Index
What is the Responsibility100 Index?
The Responsibility100 Index, developed by Tortoise Intelligence, is a ranking of the FTSE 100 companies on how they measure up to the UN’s Sustainable Development Goals (SDGs).
What are the SDGs?
The Sustainable Development Goals (SDGs) were adopted by all United Nations Member States in 2015 as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.
Why are you doing it?
We believe that measurement, scrutiny and corporate accountability are important. Big businesses have a big role to play in the future; measuring their impact, and encouraging transparency will be key.
Has this been done before?
There have been similar attempts to measure corporate sustainability, these have traditionally used proprietary data, or direct company surveys – neither of which are easily accessible to a wider public audience. By using publicly available data and comparing a company’s commitments with their actions we are starting a conversation around corporate transparency. By doing this, our intention is to hold companies accountable for what they are reporting.
Why the FTSE100?
The FTSE100 are the 100 largest companies in terms of market capitalisation listed on the London Stock Exchange. Given their size and profile, these companies have a particular responsibility to society to enact and promote policies across their businesses and beyond for a safer, fairer and more sustainable world.
Why are you using publicly available data?
Traditional attempts to measure corporate sustainability have used proprietary data or direct company surveys. Neither of these are easily accessible to a wider audience and by testing what can be measured using publicly-available data we are opening a conversation on corporate transparency and reporting.
What period of data was measured?
Where applicable, Tortoise analysed three years of corporate behaviour from 2016 because this was the first full year after the UN sustainability goals were launched. However, some indicators use data from annual sources such as Annual Reports, in these cases we have taken the latest available information that is before our cut-off date.
Why is the Index in Beta?
Whilst we are confident in our approach and findings, we are aware that the use of just publicly-available data may not give us the full picture. We have introduced the Index in Beta so that we can enter a period of consultation with the FTSE100, receive their input, start a dialogue and solidify our approach.
How regularly is the Index going to be updated?
The Responsibility100 will be updated once a month while in beta mode. After its official launch in January it will be updated on a quarterly basis. The major updates will take place twice a year.
Has your methodology been independently verified? Peer reviewed?
We have consulted with experts and specialists including Simon Anholt, director of the Good Country Index, and Stephen Clarke, senior economist at the Office of Budgetary Responsibility, Richard Hardyment, World Benchmarking Alliance during the methodology design period and creation of the Index. The Index will be subject to peer-review prior to its official release in January.
Who has designed and conducted the analysis?
The Responsibility100 has been created by Tortoise Media’s Intelligence team, a collection of data scientists, data journalists and researchers with experience in data mining and index development. Tortoise Intelligence is led by Alexandra Mousavizadeh, who has more than 20 years’ experience in ratings and indices.
Can I get a printed copy of the report?
Printed versions of the final rankings and our methodology report are available upon request. The full information will be available via this website.
What will you do next?
We will remain in consultation with the companies featured in the Index in order to hear their thoughts and critique our methodology. Between now and January we will be hosting a series of ThinkIns to discuss the findings of the Index and how to refine its data selection.
In January we will launch the official version of the Responsibility 100 Index which will take into account all we have learned. New articles, events and discussions will take place at this point. The Index will subsequently be updated every quarter as new information comes in.
As for the Tortoise Intelligence team, the next big release is the The Global AI Index. This is due to be published on December 3rd 2019, and more details can be found here.
Some of your partners are on this list – do they get special treatment?
No. Tortoise is an independent newsroom, so having partners on our list does not threaten our journalistic integrity or how we report. When a company chooses to partner with Tortoise they agree to become part of a wider discussion on the issues around their business, and that sometimes their practices do not align with Tortoise’s or our members’ views. We do not intend to use the Responsibility100 Index as any form of accusation of a company. Instead we want to start a dialogue with these companies on the transparency and urgency of the topics in the Index, bringing them to the table and offering their view on discussions.
Have the rankings changed in the run-up to publication?
Tortoise sent a draft of the Index to all 100 FTSE companies a full week prior to publication. After engagement with a number of companies, we made certain adjustments which caused minor changes in the overall rankings.
If I want to challenge, defend or explain my company’s score, how do I do that?
You can contact either James Harding, Founder of Tortoise Media, or Alexandra Mousivisadeh, Partner of Tortoise Media and Director of Tortoise Intelligence, directly and they will pass you on to the correct member of Tortoise Intelligence to answer your query.
Did you give companies the opportunity to review or verify their score before publication?
Yes, we released the Index to the companies in the FTSE100 a week prior to the beta release so that they could verify the raw data we were using and review our methodology. However, we also are using our beta release period to have extended consultations with the companies in the Index and will update our methodology or ranking if there are any changes that need to be made.
How is Tortoise monitoring its own Responsibility?
Tortoise Media is preparing its submission for BCorporation status. These are businesses that meet high standards of verified social and environmental performance, public transparency, and legal accountability. We aim to apply for BCorp status early next month.
What data sources have you used and how do you justify each one?
The Tortoise Intelligence team used multiple data sources including annual reports, government registers and NGO findings. A full list of sources is available in our methodology report.
Why are you using change in total emissions and not carbon intensity?
We have used change in total emissions as a measure of a companies improvement in reducing their emissions and carbon footprint. The alternative, a change in carbon intensity, was considered but due to the inconsistency in how companies report their intensity figures made comparison between companies difficult.
Why have you included response rates to human rights accusations?
Response rates to human rights accusations is a measure of engagement on what Tortoise believes is an important subject. By taking these accusations seriously and responding to them in a timely and professional manner, a company is indicating its engagement with social responsibility. The measure in the Index is strictly not meant to reflect the truthfulness of the claims – it is purely intended to act as a measure of a company’s engagement.
During the Beta phase we have decided to reduce the weights for impact and engagement whilst we investigate the data further and search for additional sources.
Why have you included CEO remuneration?
A difficulty we faced in creating the Index was making the SDGs, which were explicitly drawn up for countries, relevant to companies. Though CEO remuneration is not an explicit SDG indicator, we felt it pertained to at least two of the SDGs: Reducing Inequalities (SDG 10) and Decent Work and Economic Growth (SDG 8). We have used CEO remuneration as a measure of inequality within a business. As of 1st January 2019, the indicator also falls in line with UK legislation requiring companies to report the ratio of CEO total remuneration to average employee wage. However, as some companies had not reported this due to reporting cycles, we were unable to develop a consistent measure for all companies, and so resorted to using the UK median wage.
Why have you included subsidiaries in your analysis?
We have only considered subsidiaries where a company has more than a 50% stake. We then believe that the responsibility for the behaviour of those subsidiaries belongs to the parent company who have the ability to influence inter-company policy.
Why have you decided that subsidiaries in tax havens should have an effect on a company's overall score?
We’ve included an indicator on tax havens because of SDG 17.1, which aims towards countries improving domestic capacity for taxation. It may also be argued that this SDG in turn allows for the fulfilment of other SDGs, for instance, allowing governments to affect the changes for a community as mentioned in SDG 11. We’ve defined a ‘tax haven’ as any country appearing on the EU’s list of non-cooperative tax jurisdictions as of December 2018. This list, first agreed by EU member states in 2017, had been drawn up by the European Commission as part of its efforts to improve global governance on tax in the wake of the Panama Papers.
Criteria that the Commission examines for its lists include:
- Does the jurisdiction comply with the international standards on information exchange?
- Does the country have harmful tax practices or regimes? Does it apply any anti-base erosion and profit-shifting measures?
- Does the country’s tax rate encourage artificial tax structures?
We have included countries that feature on the Commission’s ‘blacklist’ or its ‘greylist’ – those jurisdictions which are at risk of appearing on the blacklist unless they implement reforms. It must be stressed that the indicator is not a measure of any wrongdoing – rather, it is intended to highlight the extent to which a company’s subsidiaries are embedded in jurisdictions which have been officially-designated as failing to cooperate with the international community on tax.
Why have you included some indicators that aren’t from the SDGs?
The SDGs whilst being a comprehensive, global framework were originally intended for countries and not for companies. We have endeavoured to include indicators that are in the spirit of the SDGs that are consistent, measurable and achievable by all companies. Equally, some SDGs are not easily measured as there is no legal requirement to report on them. In such cases, we have not included them e.g. Good Health and Well-Being (SDG 3).
Why have you weighted some topics more importantly than others?
Whilst the UN itself has placed no particular urgency or ordering on the SDGs themselves, Tortoise believes that, whilst all the SDGs are important, some are more pressing than others. Given that the threats posed from failing to achieve them are existential, we have decided to give additional weight to Climate (SDG 12), Human Rights (SDG 16) and Poverty (SDG 1).
Is the methodology gameable?
We believe that the methodology is not gameable because to rise in the index a company would have to improve performance across a number of different measures. Even a company states in its annual report that it will increase its commitment towards sustainability, the Index will measure whether it has in fact done so.
Why is the Index ‘in Beta’?
We have introduced the Index in Beta so that we can enter a period of consultation with the FTSE100 and with our members and the general public. Our aim is to ask for their input, start a dialogue and in doing so solidify our approach.
Do you have plans to go beyond the FTSE100?
Whilst there are no immediate plans to extend the Responsibility100 Index, we do believe that we have a simple, thorough framework that could be applied to other groups of companies or entities.
Who are the team behind the Index?
The Responsibility100 has been created by Tortoise Media’s Intelligence team, a collection of data scientists, data journalists and researchers with experience in a wide range of sectors. Tortoise Intelligence is led by Alexandra Mousavizadeh, who has more than 20 years’ experience in ratings and indices. Her team’s expertise in data analysis is amplified by renowned specialists brought in to advise on each index, as well as Tortoise’s team of world-class journalists.