At Salesforce, we believe business is the greatest platform for change. That is why we created Team Earth, a movement of businesses committed to building a more equitable, sustainable world together.
To envision the collective impact of the business community, we developed a Tableau dashboard that enables us to explore different scenarios. It’s like the interactive version of a pitch deck, showing the potential market size and market share of a new venture. Only in our case, we are thinking on a larger scale: our venture is about activities that improve our societies and environment.
Team Earth covers different activities that companies can engage in—see here for an overview. The dashboard shows metrics for four of these: Volunteering, Corporate Giving, Reforestation, and Equal Pay.
For each of these four initiatives, we ask: What if we all came together? What if all companies in the US contributed to this effort? What collective impact could we achieve?
These are not precise predictions or forecasts. Instead, they serve as rough estimates that allow us to see the bigger picture. As such, they are necessarily based on a number of assumptions and simplifications. The interactive nature of the dashboard enables us to observe how the numbers change when altering the underlying parameters.
The specific calculations that went into these four different thought exercises are outlined below.
Volunteering
Employees love helping their communities, but surveys indicate that many struggle to find the time to volunteer. Over a quarter of US companies recognize this issue and offer their staff volunteer time off (VTO). But what if all companies in the US were to offer VTO?
To determine the potential collective impact, we calculate the total number of volunteering hours US businesses could offer.
As of May 2023, there are 160.72 million employees in the US (this number is adjusted for seasonal fluctuations). Assuming that they work for 260 working days in a year and roughly 8 hours in a work day, they collectively work for 334.3 billion hours in a year.
At Salesforce, we believe that firms should strive to let their employees take 1% of their time to volunteer. Using this 1% number, we get a total of 3.3B VTO hours a year.
Dividing this by the hours worked in a year (8 hours x 260 working days), we get an FTE equivalent of 1.6 million. Dividing this number by 79,321— the most recent published figure for the size of Salesforce—we come to the conclusion that this hypothetical workforce of volunteers would be as large as 20 Salesforces.
Corporate giving
Money isn't a solution to everything. But it helps. Corporate giving can greatly benefit worthy causes. According to the most recent figures from 2021, US companies collectively donate 21B USD a year. That represents 0.18% of their profits. (In 2022, US companies generated approximately 11.81 trillion USD in profits, according to the Bureau of Economic Analysis.)
Salesforce is a founding member of the Pledge 1% initiative, a movement that encourages entrepreneurs and companies to utilize their assets as a force for good. Pledge 1% encourages companies to donate 1% of their product, equity, profit, time, or any combination of these resources.
The right form and amount of giving will, of course, depend on the circumstances of each company. But for the sake of simplicity, let’s imagine what could happen if all US companies were to donate 1% of their profits. How much money could we collectively raise?
Taking 1% of the 11.81 trillion USD in company profits cited above would mean the private sector could donate 118.1B USD to good causes. That is more than the 91B that foundations give every year.
Reforestation
Globally, 15 billion trees are cut down annually, resulting in an 11% loss of the world's tree cover over the past two decades. In the US, an average of 2.1 million hectares of tree cover is lost each year.
Salesforce is proud to support the 1t.org initiative announced at the World Economic Forum Annual Meeting in 2020. The vision of 1t.org is to bring together stakeholders who can collectively organize reforestation at a huge scale and empower entrepreneurs and NGOs on the ground. By conserving, restoring, and planting 1 trillion trees by 2030, we can remove two-thirds of the CO2 emissions since the Industrial Revolution, mitigating rising temperatures, promoting biodiversity, and restoring ecosystems.
Since its launch in January 2020, many organizations have pledged their support to the 1t.org cause. What if all companies in the US were to join this effort?
Looking at existing pledges as detailed on the US-chapter website, we can extrapolate to the whole economy to get an estimate of how many trees could be donated collectively. Because companies of different sizes can donate different amounts, we look at the annual revenue of these companies to make that calculation.
Currently, we have data for 22 companies regarding their pledged trees and annual revenue. These companies collectively generated USD $475.77 billion in revenue, constituting 0.022% of the total 2022 US economy, which generated USD $21.6 trillion in revenue.
Using that fraction, we can extrapolate from the 765.31 million trees pledged by these 22 companies on 1t.org.
Consequently, the US economy, consisting of approximately 6.1 million employer companies, could donate 34.79 billion trees, equivalent to 5700 trees per company.
To put this in perspective, we calculate the potential CO2 sequestration and compare it to the yearly emissions of the fleet of cars on US roads. The amount of CO2 trees can capture annually depends on various factors, including age, size, and type. On average, a rural tree sequesters and stores 0.00616 metric tons of CO2 equivalent per year, while an urban tree sequesters and stores 0.0162 metric tons of CO2e per year. Additionally, urban trees contribute to reducing electricity use and subsequent emission, providing an additional benefit of 0.0101 metric tons of CO2e per year. Thus, urban trees offer a total carbon benefit of 0.0263 metric tons of CO2e per year.
Assuming that 80% of trees are planted in rural areas, as the majority of reforestation projects focus on such regions, we multiply the potential number of trees by these weighted conversion factors. As a result, we estimate that 354 million metric tons of CO2e could be sequestered annually. This amount represents 95% of the 374 million metric tons of greenhouse gas emissions emitted by US passenger cars each year.
Equal Pay
In 2022, women in the US earned nearly $1100 less than men per month. In absolute terms, the average monthly pay difference between men and women has been fairly constant over the last two decades. Because wages have increased, the relative pay gap decreased from almost 30% in 2003 to approximately 20% last year.
What explains the current pay gap of 20% or 1100 USD? The answer is not blatant pay discrimination. When adjusting for qualification and position, the pay gap shrinks to just 1%. Meaning that, 60 years after the Equal Pay Act passed, employers, by and large, provide “equal pay for equal work.”
Instead, the majority of the unadjusted pay gap is likely due to social norms and a lack of access to higher-paying positions for women, for instance, due to biases in hiring or promotion practices. That doesn’t make it better or worse; it just means addressing the issue is not as easy as adjusting current pay structures. (This shouldn’t let individual companies off the hook though to regularly conduct equal pay audits across their organization and address any statistical pay discrepancies that become obvious.)
As a thought exercise, it can be beneficial to ask: What could the world look like if people of all genders had equal access to high-paying jobs? To answer this question, we consider a few different scenarios because pay and labor market participation are very closely linked.
- Matching pay, constant employment: First, we keep female employment at the current level. In 2022, 70.1 million women in the US were in gainful employment. If we matched their pay to what men earned by raising their monthly pay of 4277 USD by 1097 USD, we conclude that women collectively could earn 923 billion dollars more yearly than what they currently make.
- Matching male pay, matching male employment: But it is not only that women earn less. It is also the fact that female labor force participation is lower than that of men. If women were to have better access to higher-paying jobs, it could drive up labor force participation as employment becomes more lucrative. In a scenario where the employment level was also the same as that of men, namely 78.2 million employees, women would earn an additional 1.44 trillion dollars annually
- Equal pay, equal employment, constant wage bill: The first two scenarios result in higher total wage bills for employers. But empirical evidence suggests that firms that pay women more tend to reduce male pay to even out the effects on the total wage bill. On the employment side, it is not unreasonable to assume that if women had an equal earning potential, that that would also result in a more equitable split between men and women in terms of their household and child-rearing duties, meaning that male employment would come down. If we take the midpoint between male and female employment, we get 74.2 million employees of both genders. If we calculate the corresponding pay that would keep the total wage bill constant, we get 4,854.82 USD a month for both genders. Collectively, women would earn 720 billion dollars more every year compared to what they currently make in this scenario.
Because of the feedback loops between employment and pay, it is difficult to say which scenario is the most realistic. Also, it is not inconceivable that the spending and saving behavior of households would change if the income split between men and women were to change, something that has been observed in different societies. That would imply further impacts on the economy and the labor market, which in turn could again impact employment and wages. But, leaving these considerations aside, the different back-of-the-envelope calculations show what potential a shift to a more equitable society could imply for the economic prosperity of women.
1 U.S. Bureau of Labor Statistics (https://www.bls.gov/news.release/empsit.t01.htm)
2 Salesforce Annual Report for sales year ending January 31, 2023 (https://www.sec.gov/ix?doc=/Archives/edgar/data/1108524/000110852423000…)
3 Giving USA 2021 Annual Report(https://givingusa.org/)
4 Bureau of Economic Analysis (https://apps.bea.gov/iTable/?reqid=19&step=3&isuri=1&1921=survey&1903=2…)
5 T. W. Crowther et al. (2015). Mapping tree density at a global scale. Nature, 525(7568), 201-205.
6 Global Forest Watch (https://www.globalforestwatch.org/dashboards/global)
7 Ibid.
8 1t.org US Chapter (https://us.1t.org/view-pledges)
9 St. Louis Fed (https://fred.stlouisfed.org/series/TOTBUSSMSA)
10 US Census (https://www.census.gov/data/datasets/2019/econ/susb/2019-susb.html)
11 U.S. Environmental Protection Agency (https://www.epa.gov/system/files/documents/2023-05/420f23015.pdf)
12 International Labour Organization, ILOSTAT Explorer (https://www.ilo.org/shinyapps/bulkexplorer8/?id=EAR_4MTH_SEX_ECO_CUR_NB…)
13 Payscale, 2022 State of the Gender Pay Gap Report (https://www.payscale.com/research-and-insights/gender-pay-gap/)
14 International Labour Organization, ILOSTAT Explorer (https://www.ilo.org/shinyapps/bulkexplorer8/?id=EMP_TEMP_SEX_AGE_NB_A&r…)