# ROSSI Calculator Framework

The ROSSI calculator methodology is based on the work by NYU Stern's Center for Sustainable Business and their ROSI™ Methodology.

## Calculator formulas

##### 1. Increased annual profit

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This is calculated as:

profit x % increase

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Where:

profit = total annual profit from question 1

% increase = percentage increase in profit from question 2 (suggestion of 23% based on research)

The percentage increase suggested is based on results from the 2024 Gallup report The Relationship Between Engagement at Work and Organizational Outcomes Q12® Meta-Analysis: 11th Edition. The results state that the median percent difference between top-quartile and bottom-quartile units is a 23% increase in profitability. "Results indicate high generalizability, which means the correlations were consistent across different organizations.”

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##### 2. Increased customer loyalty

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This is calculated as:

# customers x CRR x % increase in CRR x CLV

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Where:

# customers = number of customers this year from question 4

CRR = customer retention rate from question 5

% increase in CRR = percentage increase in customer retention from question 6

CLV = customer lifetime value from question 7

The percentage increase suggested is based on results from the 2024 Gallup report The Relationship Between Engagement at Work and Organizational Outcomes Q12® Meta-Analysis: 11th Edition. The results state that the median percent difference between top-quartile and bottom-quartile units is a 10% increase in customer loyalty/engagement. "Results indicate high generalizability, which means the correlations were consistent across different organizations.”â€‹â€‹

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##### 3. New customer acquisition

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This is calculated as:

(# new customers x CLV x % increase in growth) + (# new customers x CAC x % increase in growth)

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Where:

CLV = customer lifetime value from question 7

CAC = customer acquisition cost from question 8

# new customers = subtracting # of customers last year (question 3) from # customers this year (question 4)

% increase in growth = percentage entered in question 9 (suggestion of 1.4% based on research)

The percentage increase suggested is based on results from the 2023 McKinsey report The triple play: Growth, profit, and sustainability. The results state, “triple outperformers (companies that outperformed their peers in ESG rating improvement, revenue growth, and profit margin) increased their revenues at a median rate of 1.4 percentage points higher than the median achieved by profitable growth outperformers that lagged on ESG. Their new analysis indicates financially successful companies that integrate environmental, social, and corporate governance (ESG) priorities into their growth strategies outperform their peers—provided they also outperform on the fundamentals. The message is clear: not only can you do well while doing good—you can do better.”

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##### 4. Reduced turnover

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This is calculated as:

(# employees x VTR x turnover cost) x % decrease in turnover

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Where:

# employees = number of employees from question 10

VTR = voluntary turnover rate from question 11 (suggestion of 17.3% based on research)

turnover cost = cost of turnover per employee from question 13

% decrease in turnover = percentage decrease in turnover from question 12 (suggestion of 21 - 51% based on research)

The percentage voluntary turnover rate suggested is based on results from the 2023 Mercer US and Canada Turnover report. The report states that "the average turnover rate among US businesses between 2022 and 2023 was 17.3%". They further break this down by position. The full report is available for purchase through their website. The percentage decrease in turnover suggested is from the 2024 Gallup report The Relationship Between Engagement at Work and Organizational Outcomes Q12® Meta-Analysis: 11th Edition. The results state that the median difference in turnover between the top-quartile and bottom-quartile was 21% for high-turnover organizations (>40% annualized turnover) and 51% for low-turnover organizations (<40% annualized turnover). "Results indicate high generalizability, which means the correlations were consistent across different organizations.”â€‹â€‹

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##### 5. Increased productivity

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This is calculated as:

(# employees x RPP) x % increase in productivity

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Where:

# employees = number of employees from question 10

RPP =. annual revenue per employee from question 14

% increase in productivity =. percentage increase in employee productivity from question 15

The percentage increase suggested is based on results from the 2024 Gallup report The Relationship Between Engagement at Work and Organizational Outcomes Q12® Meta-Analysis: 11th Edition. The results state that the median percent difference between top-quartile and bottom-quartile units is a 13% increase in productivity (production records and evaluations) to a 17% increase in productivity (sales). "Results indicate high generalizability, which means the correlations were consistent across different organizations.”

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##### 6. Decreased cost of capital

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This is calculated as:

debt x % decrease in capital cost

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Where:

debt = current outstanding debt from question 16

% decrease in capital cost = percentage decrease in the cost of capital from question 17 (suggestion of 10% based on research)

The percentage increase suggested is based on results from the 2020 McKinsey report Why ESG is here to stay. The report states that “there have been more than 2,000 academic studies and around 70 percent of them find a positive relationship between ESG scores on the one hand and financial returns on the other, whether measured by equity returns or profitability or valuation multiples.

Evidence is emerging that a better ESG score translates to about a 10 percent lower cost of capital, as the risks that affect your business are reduced (Nuttall, R.).”

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##### 7. Gain from social initiatives

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This is calculated as:

sum of 1 through 6 above

Theâ€‹ total gain from social initiatives formula is calculated as the sum of the financial value of increased profit, increased customer loyalty, new customer acquisition, reduced employee turnover, increased productivity, and decreased cost of capital. There are additional gains found in increased stock which were not included in this calculator due to the lack of applicability to all organizations that would use it.

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##### 8. Return on Social Sustainability Investment (ROSSI)

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This is calculated as:

(total gain - investment) / investment

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Where:

total gain = total financial value of the increases or decreases due to social sustainability from result 7 above

investment = cost of your social sustainability initiatives / SEAM Certification from question 18

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The 2019 Business ROI of Social Investments by Impact ROI states that "First, by itself, SI (social investments) won’t deliver financial success. However, strong SI practices can enhance business performance to deliver additional ROI as well as make up for certain deficiencies in business performance to preserve, protect, and even grow financial ROI. At its highest potential, the impact that SI can deliver is substantial and material."â€‹

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