Axiomatic Data’s new ESG data elements facilitate the ranking and analysis of companies in the Russell 3000 for the Social “S” component of ESG. This legally mandated, company-reported data answers the question, “On a relative basis, how well are employers in the Russell 3000 treating their employees?”

• There are numerous sources of data for the Environmental and Governance components of ESG. There are relatively few sources of data that examine the Social component. Using data attributes from Form 5500 employee benefit plan filings, Axiomatic Data has built consistent and auditable metrics that address the Social component of ESG.
• Axiomatic Data ESG metrics gleaned from Form 5500 filings include:
• Salary Boost: the level and growth of company contributions per active employee in a defined contribution pension plan, e.g., 401k plan.
• Salary Deferral: the level and growth of participant contributions per active employee in a defined contribution pension plan, e.g., 401k plan.
• Pension Plan Participation Rate: the percentage of employees participating in a defined contribution pension plan, e.g., 401k plan.
• Consistent, material Axiomatic Social factors for public and private companies are used to identify better-governed socially responsible companies and can be used to create exclusion lists of companies with poor ESG rankings within their peer groups.

As an example, certain sectors, such as Technology, employ mostly white-collar workers and will likely have superior employee benefit packages and higher pension plan contributions.

Other sectors, such as Accommodation and Retail Trade will offer employees less attractive benefits. Axiomatic Data facilitates the comparison of company-specific employee benefits between and among industry sectors and groups.

Academic research has shown that these “Social” metrics are highly correlated with corporate performance proving the thesis: Companies that treat their employees well function more effectively and outperform the market benchmark.

Conclusion

Axiomatic Data’s ESG data elements facilitate the ranking and analysis of companies in the Russell 3000 for the Social “S” component of ESG. This legally mandated, company-reported data answers the question, “On a relative basis, how well are employers in the Russell 3000 treating their employees?”

Axiomatic Data’s ESG signals extracted from Form 5500 filings fall under the following categories:

1. Salary Deferral – participant contribution per employee to pension plans.
2. Salary Boost– employer contribution per employee to pension plans.
3. Pension Plan Participation Rate– percentage of employees participating in a defined contribution plan.