Scoring Rules

I. Policy and Program Indicators

Most GoodGuide ratings are driven by qualitative information about a company's policies or programs, because quantitative data on real-world performance are rarely made public and relatively few companies are the subject of controversies or the recipient of awards/certifications.  We constrain use of program and policy data to the middle portion (4-8) of GoodGuide's entire score range (0-10) because it is very difficult to use this kind of qualitative information to distinguish the worst and best performers on any given issue.  We evaluate each policy or program variable and associated data values to assign scores using the rules in the following table.   The table provides illustrative examples of specific policy or program evidence that qualifies for different scores.  Note that various sources of information on companies differ in how they report on policies and programs, so the table also provides specific examples of best practices or exemplary programs that may be found in public company data sources and private company data sources.

Score	Evidence Indicates This Company Exhibits:	Scoring Rules for Policies and Programs	Illustrative Examples - Environment	Illustrative Examples - Society
0	Worst performance
1	Very poor performance
2	Poor performance
3	Significantly below average performance
4	Below average performance	No data found - A company's failure to publicly provide information about how it addresses an issue is treated as a negative. Indicative of a below-average capability to address an issue.
5	Average performance or capability to address an issue	Evidence of general or aspirational policy statements only. Indicative of an average capability to address an issue.	Company has an environmental policy Policy mandates compliance with legal obligations Policy includes commitment to public reporting or stakeholder engagement	Company has a business and vendor code of conduct Policy mandates compliance with legal obligations Policy includes commitment to public reporting or stakeholder engagement
6	Above average performance or capability to address an issue	Evidence of specific initiative(s) or program(s) to address an issue, or of a policy that includes qualitative targets for improved performance.  Indicative of a better-than-average capability to address an issue.	Company has environmental management team and trains employees on environmental issues Company discloses data on resource use and environmental impacts Company reports on initiatives to improve energy efficiency Company operates a consumer product recycling program Company has policy to lessen environmental impact of supply chain Company participates in relevant multi-stakeholder initatives addressing sector issues	Company has management team responsible for CSR issues Company discloses data on employee diversity Company monitors human rights in its or its suppliers' facilities Company participates in relevant multi-stakeholder initatives addressing sector issues
7	Significantly above average performance or strong capability to address an issue	Evidence of formal systems in place to manage an issue, or of a policy that includes quantitative targets for improved performance, or of sector best practices.  Indicative of a strong capability to address an issue.	Public Company Environmental Best Practices include: Company commits to third-party auditing Company has product life-cycle assesment policy Company reports performance data to public registry Company uses environmental criteria to select suppliers Private Company Environmental Best Practices include: Company integrates certification programs (DfE,C2C) into its entire product design process Company relies on certified production process (Organic) for the majority of its sourcing Company has zero waste policy and goals for packaging reduction, recyled content or bio-based feedstocks. Company generates renewable energy or purchases renewable energy credits	Public Company Social Best Practices include: Company commits to third-party auditing Company shows readiness to end partnership with supplier if human rights criteria are not met Company promotes social responsibility of its products through labeling Company provides domestic partnership benefits Private Company Social Best Practices include: Company shows readiness to end partnership with supplier if human rights criteria are not met Company emphasizes local sourcing Company caps compensation ratio between highest-lowest paid employee
8	Good performance or strongest capability to address an issue	Evidence of an exemplary program aimed at comprehensively managing an issue.  Indicative of the strongest capability to address an issue.	Public Company Environmental Exemplary Programs include: Company publicly discloses list of its suppliers Private Company Environmental Exemplary Programs include: Company's products and operations are designed to reduce environmental impact Company operates extensive supply chain impact management programs Company has comprehensive approach to reducing greenhouse gases over entire product life cycle and supply chain Company operates extended producer responsibility program to address product end-of-life impacts	Public Company Social Exemplary Programs include: Company publicly discloses list of its suppliers Private Company Social Exemplary Programs include: Company sources all of its products or raw materials following fair trade principles (Green&Blacks) Company is minority-owned or worker cooperative. Company donates 1%or more of its profits to philanthropic activities

II. Performance Indicators

A. Certifications and Awards

Certifications or awards from third-parties are valuable positive indicators of company performance.  GoodGuide currently tracks over 150 different certifications and awards.  Since these systems vary significantly in credibility. stringency and coverage, considerable work is required to extract the correct positive signal for use in scoring.  GoodGuide scores consider two key dimensions of certification/award systems

1. Quality and relevance:  GoodGuide classifies each certification or award into one of three tiers based on its overall quality and determines which specific sub-set of issues is covered by the certification or award.   Tier 1 includes certifications or awards issued by entities that are widely recognized as setting the standard for performance within their domain of coverage.  Tier 1 certifications or awards typically have detailed, public standards that guide their award.  Example Tier 1 certifications include ISO 14001, EPA Design for the Environment, Fair Trade, Marine Stewardship Council, and USDA Organic.  Tier 2 includes certifications or awards issued by less authoritative entities (such as publications, trade or business associations or individual corporations).  Tier 2 certifications or awards often lack detailed, public standards that guide their award.  In some cases, a certification or award that might qualify for Tier 1 status is placed in Tier 2 because it doesn't cover all aspects of an issue or it is limited to a single issue that is addressed more comprehensively by another Tier 1 certification or award. Example Tier 2 certifications and awards include EPA Green Power Partners, Diversity Incs Top Companies, and Socially Responsible Business Award. Tier 3 includes local awards or niche certifications that focus on a very narrow aspect of an issue.   Example Tier 3 certifications and awards include Natural Products Association, EPA Green Chemistry Challenge Award, and the E.F. Schumaker Award.
   
2. Operational scope: For each certification or award granted to a company, GoodGuide estimates the extent of company operations that are covered (e.g., is it a facility-specific or company-wide award?, or what percent of products or production inputs are covered by a certification?)  Full coverage is defined as 100% of company operations covered.  Limited coverage is defined as less than one-third of company operations covered, but more than 5%.  Partial coverage is defined as everything in between (34% - 99%). 
   
3. Combined, these two dimensions are used to assign scores as illustrated in the table below.  Recipients of Tier 1 certifications or awards receive scores ranging from 8-10 depending on their operational scope; Recipients of Tier 2 certifications or awards receive scores ranging from 7-9 depending on their operational scope; Recipients of Tier 3 certifications or awards receive scores ranging from 6-7 depending on their operational scope

Score	Evidence Indicates This Company Exhibits:	Scoring Rules for Certifications & Awards
0	Worst performance
1	Very poor performance
2	Poor performance
3	Significantly below average performance
4	Below average performance
5	Average performance or capability to address an issue
6	Above average performance or capability to address an issue	Limited coverage by Tier 3 Award or Certification
7	Significantly above average performance or strong capability to address an issue	Partial coverage by Tier 3 Award or Certification OR Limited Coverage by Tier 2 Award or Certification
8	Good performance or strongest capability to address an issue	Limited coverage by Tier 1 Award or Certification OR Partial coverage by Tier 2 Award or Certification OR Full coverage by Tier 3 Award or Certification
9	Very good performance	Partial coverage by Tier 1 Award or Certification OR Full coverage by Tier 2 Award or Certification
10	Best performance	Full coverage by Tier 1 Award or Certification

B. Quantitative Metrics

Quantitative metrics are indicators of real-world environmental performance and can be used to rate companies on a common scale (e.g., from most to least polluting).  The data values for a quantitative metric are placed into scoring bins based on distributional characteristics:

• Data values for normally distributed variables are split into decile bins and each decile is assigned scores appropriate to the polarity of the variable.  For example,  observed data on "Greenhouse Gases Emitted per $ Revenue" are placed in decile bins; companies with the highest carbon intensity are scored 1, companies with the lowest are scored 10, and companies with no data receive no score on this metric.   Environmental indicators that are scored using this procedure include: Recycled Materials %; Materials Used per $ Revenue; Water Used per $ Revenue; Energy Used per $ Revenue; GHG Emissions per $ Revenue or per Employee; VOC/SOX/NOX or ODS Emissions per $ Revenue; Water Pollutant Emissions per $ Revenue; TRI Emissions per Employee; Waste Generated per $ Revenue or per Employee; Total Hydrocarbon Spills (kbl); Waste Recycling Ratio.  Social indicators that are scored using this procedure include: Occupational Injuries per 1M Hours Worked; Occupational Diseases per 1M Hours Worked; % Female Managers; % Minority Managers.  The following table illustrates how scores are assigned using this procedure:

Score	Evidence Indicates This Company Exhibits:	Observed Company Data Falls Into:
0	Worst performance
1	Very poor performance	Worst Decile
2	Poor performance	2nd Worst Decile
3	Significantly below average performance	3rd Worst Decile
4	Below average performance	4th Worst Decile
5	Average performance or capability to address an issue	Below Average Decile
6	Above average performance or capability to address an issue	Above Average Decile
7	Significantly above average performance or strong capability to address an issue	4th Best Decile
8	Good performance or strongest capability to address an issue	3rd Best Decile
9	Very good performance	2nd Best Decile
10	Best performance	Best Decile

• In some cases, data values are aggregated into custom percentile bins and assigned to only part of the scoring scale. For example, the percentage of workforce that is unionized is a positive measure of performance, but only companies in the top two quintiles of observed union representation receive positive scores on this measure.   Environmental indicators that are scored using this procedure include: % Operations with Certified Environmental Management System.  Social indicators that are scored using this procedure include: Donations per $ Revenue and % Unionized. The following table illustrates how scores are assigned using this procedure:

Score	Evidence Indicates This Company Exhibits:	Donations per $ Revenue	% Operations with Certified Environmental Management System	% Unionized
0	Worst performance
1	Very poor performance
2	Poor performance
3	Significantly below average performance
4	Below average performance	0
5	Average performance or capability to address an issue	0.1% - 16.6%
6	Above average performance or capability to address an issue	16.6% - 33.3%	0.1% - 20%
7	Significantly above average performance or strong capability to address an issue	33.4% - 50%	20% - 40%	60% - 80%
8	Good performance or strongest capability to address an issue	50.1% - 66.6%	40% - 60%	80% - 100%
9	Very good performance	66.7% - 83.3%	60% - 80%
10	Best performance	83.4% - 100%	80% - 100%

• In some cases, fixed numerical thresholds are used to define scoring bins because a standard distributional approach does not reflect meaninguful differences in the underlying data.  For example,  the amount of fines and penalties paid by a company are assessed against a fixed dollar scale that is used consistently for all variables of this type.  Environmental indicators that are scored using this procedure include: Fine & Penalty indicators, Water Recycling %, Renewable Energy %, Certified Wood Products %.  Social indicators that are scored using this procedure include: Fine & Penalty indicators, Occupational Deaths, CEO to Worker Salary Ratio. The following table illustrates how scores are assigned using this procedure:

Score	Evidence Indicates This Company Exhibits:	Occupational Safety (Deaths)	CEO to Worker Salary Ratio	Fines & Penalty Variables (Total $)	Water Recycling (%)	Renewable Energy (%)	Certified Wood Products (%)
0	Worst performance	>10		>$100M
1	Very poor performance	6 - 10	>1000	$10M - $100M
2	Poor performance	3 - 5	500 - 1000	$1M - $10M
3	Significantly below average performance	1 - 2	100 - 500	$100K - $1M		<10%
4	Below average performance		20 - 100	$1 - $100K
5	Average performance or capability to address an issue					10% - 20%
6	Above average performance or capability to address an issue				0-30%	20% - 30%
7	Significantly above average performance or strong capability to address an issue				30% - 40%	30% - 40%	<50%
8	Good performance or strongest capability to address an issue				40% - 50%	40% - 50%	50% - 75%
9	Very good performance						75% - 100%
10	Best performance				>50%	>50%

C. Counts of Events

Some performance indicators are counts of rare events (e.g., the number of controversies about an issue, or the number of awards received). The data values for count variables are scored using one of three rules, depending on the relative frequency of high counts. 

1. Most rare negative event indicators exhibit very few maximum counts greater than 5 and are scored using Rule (1).  Example indicators scored using this rule include Health & Safety Fines or Violations, Health&Safety Controversies, Reported Spills, Human Rights Controversies, Product Quality Controversies.
2. Some negative event indicators have more than one percent of observations with maximum counts greater than 5.   To provide additional resolution at the high count end of the scale, these are scored using Rule (2).   Example indicators scored using this rule include: Spills Controversies, Business Ethics Controversies, Competitive Behavior Controversies, Intellectual Property Controversies.
3. Positive event indicators exhibit very few maximum counts greater than 5 and are scored using Rule (3).  Example indicators scored using this rule include Employment Quality Awards.

In some cases, count data can be further characterized by qualitative information about the relative significance of the event being counted.  For example, depending on a variable's data source, it is sometimes possible to distinguish major from minor controversy or compliance incidents.  Major incidents include legal or regulatory process outcomes that reveal significant compliance violations and involve substantial fines or penalties. Minor incidents include unresolved legal or regulatory processes or media or NGO critiques.  The data available on private companies may support more refined controversy scoring based on a consideration of severity, while the data available for public companies generally does not.  For example, the scoring rules for private companies assign a 0 to companies if their record includes high profile human rights violations, or a pattern of serious controversies that involve harming human health and a 1 to companies with serious controversies that involve harming health/human rights, two or more Class 1 product recalls, very large number of smaller controversies, or a pattern of serious white collar controversies.

The following table illustrates how scores are assigned using these procedures:

Score	Evidence Indicates This Company Exhibits:	Scoring Counts of Negative Events (Rule 1)	Scoring Counts of Negative Events (Rule 2)	Scoring Counts of Positive Events (Rule 3)
0	Worst performance	5 or more controversy/compliance instances; or 3 major controversy/compliance incidents (private companies only)	10 or more controversy/compliance instances
1	Very poor performance	4 controversy/compliance instances; or 2 major cnotroversy/compliance incidents (private companies only)	6-9 controversy/compliance instances
2	Poor performance	3 controversy/compliance instances; or 1 major controversy/compliance incident (private companies only)	4-5 controversy/compliance instances
3	Significantly below average performance	2 controversy/compliance instances	2-3 controversy/compliance instances
4	Below average performance	1 controversy/compliance instance	1 controversy/compliance instance
5	Average performance or capability to address an issue
6	Above average performance or capability to address an issue
7	Significantly above average performance or strong capability to address an issue			1 award
8	Good performance or strongest capability to address an issue			2 awards
9	Very good performance			3 awards
10	Best performance			4 or more awards

D. Third-Party Ratings

Some indicators involve numerical ratings or grades that have been assigned to a company by a third party.  GoodGuide creates a custom scoring rule for each such system that translates the third-party's rating scale onto GoodGuide's 0-10 scale while preserving the source system's semantics.  Example indicators scored using this procedure include HRC Equality Index, Freedom House Scores and GRI Application Level. The following table illustrates how scores are assigned to these third-party rating systems:

Score	Evidence Indicates This company Exhibits:	HRC Equality Index (0-100 scale)	Freedom House Scores (2-14 scale; 11-14 = "not free")	GRI Application Level (A-C grades)
0	Worst performance	0-19	14
1	Very poor performance	20-39	13
2	Poor performance	40-49	12
3	Significantly below average performance	50-59	11
4	Below average performance	60-69
5	Average performance or capability to address an issue	70-74
6	Above average performance or capability to address an issue	75-79
7	Significantly above average performance or strong capability to address an issue	80-84		C
8	Good performance or strongest capability to address an issue	85-90		B
9	Very good performance	90 - 94		A
10	Best performance	95-100

 

III. Product-level Indicators

For product-level data, GoodGuide selects indicators and utilizes scoring methods that vary by product category.  Full details of the issues addressed and scoring methods used in different product categories are provided in the following pages:

• Personal Care and Household Chemicals
• Tampons
• Diapers
• Food
• Drinks
• Bulk Coffees and Teas
• Chocolates
• Pet Food
  
• Paper 
• Lighting
• Appliances
• Apparel
• Cell Phones
• Cars