COMMUNITY | Strengths | Charitable Giving | The company has consistently given over 1.5% of trailing three-year net earnings before taxes (NEBT) to charity, or has otherwise been notably generous in its giving. | Support for Housing | The company is a prominent participant in public/private partnerships that support housing initiatives for the economically disadvantaged, e.g., the National Equity Fund or the Enterprise Foundation. | Support for Education | The company has either been notably innovative in its support for primary or secondary school education, particularly for those programs that benefit the economically disadvantaged, or the company has prominently supported job-training programs for youth. | Indigenous Peoples Relations | The company has established relations with indigenous peoples in the areas of its proposed or current operations that respect the sovereignty, land, culture, human rights, and intellectual property of the indigenous peoples. KLD began assigning this strength in 2000. In 2002 KLD moved this strength rating into the Human Rights area. | Non-US Charitable Giving | The company has established substantial, innovative charitable giving programs outside the U.S. In 2002 KLD stopped assigning strengths for Non-U.S. charitable giving in the Non-U.S. category, companies with exemplary giving programs outside the U.S. are tracked in the Community area. | Other Strength | The company has an exceptionally strong volunteer program, in-kind giving program, or other particularly strong community program. | Concerns | Investment Controversies | The company is a financial institution whose lending or investment practices have led to controversies, particularly ones related to the Community Reinvestment Act. | Negative Economic Impact | The company’s actions have resulted in major controversies concerning its economic impact on the community. Thesecontroversies can include issues related to environmental contamination, water rights disputes, plant closings, "put-or-pay" contracts with trash incinerators, or other company actions that adversely affect the quality of life, tax base, or property values in the community. | Indigenous Peoples Relations | The company has been involved in serious controversies with indigenous peoples that indicate the company has not respected the sovereignty, land, culture, human rights, and intellectual property of indigenous peoples. KLD began assigning this concern in 2000. In 2002 KLD moved this strength rating into the Human Rights area. | Other Concern | The company is the focus of strong community opposition to its business or some other aspect of its operations. | CORPORATE GOVERNANCE | Strengths | Limited Compensation | The company has recently awarded notably low levels of compensation to its top management or its board members. The limit for a rating is total compensation of less than $500,000 per year for a CEO or $30,000 per year for outside directors. In 1999 the threshold rose to its current level from $400,000 and $25,000, which represented a 1997 rise from $200,000 and $15,000. | Ownership Strength | The company owns between 20% and 50% of another company KLD has cited as having an area of social strength, or is morethan 20% owned by a firm that KLD has rated as having social strengths. When a company owns more than 50% of another firm, it has a controlling interest, and KLD treats the second firm as if it is a division of the first. | Other Strength | | Concerns | High Compensation | The company has recently awarded notably high levels of compensation to its top management or its board members. The limit for a rating is total compensation of more than $10 million per year for a CEO or $100,000 per year for outside directors. The threshold rose to its current level in 1999, from a previous threshold of $6 million and $80,000, which represented a 1997 rise from $5 million and $60,000. | Tax Disputes | The company has recently been involved in major tax disputes involving more than $100 million with the Federal, state, or localauthorities. Before 1995 the concern was given to companies involved in “major tax disputes.” | Ownership Concern | The company owns between 20% and 50% of a company KLD has cited as having an area of social concern, or is more than20% owned by a firm KLD has rated as having areas of concern. When a company owns more than 50% of another firm, it has a controlling interest, and KLD treatsthe second firm as if it is a division of the first. | Other Concern | | DIVERSITY | Strengths | CEO | The company's chief executive officer is a woman or a memberof a minority group. | Promotion | The company has made notable progress in the promotionof women and minorities, particularly to line positions with profit-and-loss responsibilities in the corporation. | Board of Directors | Women, minorities, and/or the disabled hold four seats or more (with no double counting) on the board of directors, or one-third or more of the board seats if the board numbers less than 12. | Family Benefits | The company has outstanding employee benefits orother programs addressing work/family concerns, e.g., childcare, elder care, or flextime. | Women/Minority Contracting | The company does at least 5% of its subcontracting, or otherwise has a demonstrably strong record on purchasing or contracting, with women- and/or minority-owned businesses. | Employment of the Disabled | The company has implemented innovative hiring programs, other innovative human resource programs for the disabled, or otherwise has a superior reputation as an employer of the disabled. | Progressive Gay/Lesbian Policies | The company has implemented notably progressive policies toward its gay and lesbian employees. In particular, it provides benefits to the domestic partners of its employees. KLD began assigningstrengths for this issue in 1995. | Other Strength | The company has made noteworthy diversity achievements that do not fall under other KLD categories. | Concerns | Controversies | The company has either paid substantial fines or civil penalties as a result of affirmative action controversies, or has otherwise beeninvolved in major controversies related to affirmative action issues. | Non-Representation | The company has no women on its board of directors or among its senior line managers. KLD began assigning concerns for thisissue in 1993. | Other Concern | The company has other notable diversity problems. | EMPLOYEE RELATIONS | Strengths | Strong Union Relations | The company has a history of notably strong union relations. | No-Layoff Policy | The company has maintained a consistent no layoff policy. KLD has not assigned strengths for this issue since 1994. | Cash Profit Sharing | The company has a cash profit-sharing program through which it has recently made distributions to a majority of its workforce. | Employee Involvement | The company strongly encourages worker involvement and/or ownership through stock options available to a majority of itsemployees, gain sharing, stock ownership, sharing of financial information, or participation in management decision-making. | Strong Retirement Benefits | The company has a notably strong retirement benefits program. | Health and Safety Strength | The company is noted by the US Occupational Health and Safety Administration for its safety programs. KLD began assigning strengths for this issue in 2003. | Other Strength | The company has a good employee safety record or demonstrates other noteworthy commitments to its employees’ well-being. | Concerns | Poor Union Relations | The company has a history of notably poor union relations. | Health and Safety Concern | The company recently has either paid substantial fines or civil penalties for willful violations of employee health and safety standards, or has been otherwise involved in major health and safetycontroversies. KLD changed the name of this rating from Safety Controversies in 2003. | Workforce Reductions | The company has reduced its workforce by 15% in the most recent year or by 25% during the past two years, or it has announced plans for such reductions. Before 1994, the concern was only assignedto companies that had laid off 15% of workers in the most recent year. | Pension/Benefits Concern | The company has either a substantially underfunded defined benefit pension plan, or an inadequate retirement benefits program. KLD began assigning concerns for this issue in 1992. | Other Concern | The company has a notable employee problem not addressed by KLD’s specific rating categories. | ENVIRONMENT | Strengths | Beneficial Products and Services | The company derives substantial revenues from innovative remediation products, environmental services, or productsthat promote the efficient use of energy, or it has developed innovative products with environmental benefits. Through 1994, “substantial revenues” was specified as more than 4% of total revenues. | Pollution Prevention | The company has notably strong pollution prevention programs including emissions reductions and toxic-use reduction programs. | Recycling | The company either is a substantial user of recycled materials as raw materials in its manufacturing processes, or a major factor in the recycling industry. | Alternative Fuels | The company derives substantial revenues from alternative fuels. The term “alternative fuels” includes natural gas, wind power, andsolar energy. The company has demonstrated an exceptional commitment to energy efficiency programs or the promotion of energy efficiency. | Communications | The company is a signatory to the CERES Principles, publishes a notably substantive environmental report, or has notablyeffective internal communications systems in place for environmental best practices. KLD began assigning strengths for this issue in 1996. | Property, Plant, and Equipment | The company maintains its property, plant, and equipment with above average environmental performance for its industry. KLD has not assigned strengths for this issue since 1995. | Other Strength | The company demonstrates a strong environmental attribute not addressed by KLD ratings categories. | Concerns | | Hazardous Waste | The company's liabilities for hazardous waste sites exceed $50 million, or the company has recently paid substantial fines or civilpenalties for waste management violations. Before 1996 the threshold for liabilities was $30 million. | Regulatory Problems | The company has recently paid substantialfines or civil penalties for violations of air, water, or other environmental regulations, or it has a pattern of regulatory controversies under the Clean Air Act, Clean Water Act or other major environmental regulations. | Ozone Depleting Chemicals | The company is among the top manufacturers of ozone depleting chemicals such as HCFCs, methyl chloroform, methylene chloride, or bromines. | Substantial Emissions | The company's legal emissions of toxic chemicals (as defined by and reported to the EPA) from individual plants into the air and water are among the highest of the companies followed by KLD. | Agricultural Chemicals | The company is a substantial producer of agricultural chemicals, i.e., pesticides or chemical fertilizers. | Climate Change | The company derives substantial revenues from the sale of coal or oil and its derivative fuel products, or the company derivessubstantial revenues indirectly from the combustion of coal or oil and its derivative fuel products. Such companies include electric utilities, transportation companies with fleets of vehicles, auto and truck manufacturers, and other transportation equipment companies. KLD began assigning concerns for this issue in 1999. | Other Concern | The company has environmental problem not specifically covered in KLD’s categories, usually an environmental accident. | HUMAN RIGHTS | Strengths | Positive Record in South Africa | The company’s social record in South Africa is noteworthy. KLD only assigned strengths in this category in 1994 and 1995. | Indigenous Peoples Relations | The company has established relations with indigenous peoples in the areas of its proposed or current operations that respect the sovereignty, land, culture, human rights, and intellectual property ofthe indigenous peoples. KLD began assigning this strength in 2000. | Labor Rights Strength | The company has outstanding transparency on overseas sourcing disclosure and monitoring, or has particularly good union relations outside the U.S. KLD began assigning this strength in 2002. | Other Strength | The company's non-U.S. operations have been praised for their community relations, employee relations, environmental impact, orproduct innovation. | Concerns | South Africa | The company faced controversies over its operations in South Africa. KLD assigned concerns for this issue through 1994. | Northern Ireland | The company has operations in Northern Ireland. KLD assigned concerns for this issue through 1994. | Burma | The company has operations in Burma. KLD started assigning concerns for this issue in 1995. | Mexico | The company's operations in Mexico have had major recent controversies, especially those related to the treatment of employees or degradation of the environment. KLD assigned concerns for this issue from 1995 to 2002. | International Labor | The company's non-U.S. operations have been the subject of major recent controversies related to employee relations and laborstandards. KLD started assigning concerns for this issue in 1998. | Indigenous Peoples Relations | The company has been involved in serious controversies with indigenous peoples that indicate the company has not respected the sovereignty, land, culture, human rights, and intellectual property ofindigenous peoples. KLD began assigning this concern in 2000. | Other Concern | The company’s non-U.S. operations are subject to controversies related to the community, diversity issues, the environment, productsafety, or product quality. | PRODUCT | Strengths | Quality | The company has a long-term, well-developed, companywidequality program, or it has a quality program recognized as exceptional in U.S. industry. | R&D/Innovation | The company is a leader in its industry for research and development (R&D), particularly by bringing notably innovative products to market | Benefits to Economically Disadvantaged | The company has as part of its basic mission the provision of products or services for the economically disadvantaged. | Other Strength | | Concerns | | Product Safety | The company has recently paid substantial fines orcivil penalties, or is involved in major recent controversies or regulatory actions, relating to the safety of its products and services. | Marketing/Contracting Controversy | The company has recently been involved in major marketing or contracting controversies, or has paid substantial fines or civil penalties relating to advertising practices, consumer fraud, or government contracting. | Antitrust | The company has recently paid substantial fines or civil penalties for antitrust violations such as price fixing, collusion, or predatory pricing, or is involved in recent major controversies or regulatory actions relating to antitrust allegations. | Other Concern | The company has problems at affiliated franchises, has been fined for product malfunctions, or has product problems not addressed byKLD’s other categories. |