Standard Ethics Aei

Last updated

Standard Ethics
Industry Ratings
Founded2004
Headquarters,
Belgium, and Italy
Key people
Blanche Ullens de Schooten (Chairman)
ProductsSolicited Sustainability Ratings
ServicesSustainability Rating
Website Standard Ethics

Standard Ethics is an independent sustainability reporting rating agency based in London, known for its sustainable finance and ESG (Environmental, Social, Governance) studies. In 2001, it introduced a standardized approach to sustainability ratings. Methodologically, it separates Corporate Social Responsibility (CSR) from sustainability, seeing the latter as a global and systemic approach whose definition is not given by a single entity but by international institutions. [1]

Contents

Standard Ethics promotes sustainability and corporate governance with the Standard Ethics Rating, an evaluation of how well companies and sovereign nations respond to corporate governance and sustainability, as indicated by guidelines published by the United Nations, the Organization for Economic Co-operation and Development, and the European Union.

The Standard Ethics Business Model is based on the applicant-pay model. Like credit rating agencies, Standard Ethics sells solicited ratings, meaning it charges applicants for ratings. Once assigned, the rating and related analysis belong to the applicant. Conversely, under the investor-pay model, agencies charge investors a fee for a list of companies that warrant investment. [2] [3]

Standard Ethics Rating

The Standard Ethics Rating (SER) is a Solicited Sustainability Rating (SSR). It is assigned upon a client's request through a direct and regulated bilateral relationship. It is a rating that intends to deliver an evaluation of the level of compliance by companies and sovereign nations in the field of sustainability and corporate governance as indicated by documents and guidelines published by the United Nations (UN), the Organization for Economic Co-operation and Development (OECD), and the European Union (EU). [4]

Standard Ethics does not use weightings and KPI-based analyses or indicators but applies a method based on its own proprietary six-group variable algorithm.

Standard Ethics links the rating to an evaluation done both at a qualitative and quantitative level of the potential reputational risks for a company. This process aims to protect corporate assets, particularly corporate reputation. Companies believe that EU, OECD and UN recommendations suggest future legislative requirements. Therefore, complying with this model could bring a competitive advantage.[ citation needed ]

The methodological approach of Standard Ethics was first introduced in 2001, and its ratings are based on a scale comprising nine letter grades: [5] EEE; EEE−; EE+; EE; EE−; E+; E; E−; F; where "EEE" stands for 'above average'; "EE" for 'average'; and "E" for 'below average'.

Standard Ethics indices

Standard Ethics covers the major OECD Stock Exchange markets and the largest listed companies in those markets. In April 2019, Standard Ethics announced its SE European 100 Index, whose Index constituents have been selected according to their dimension, in terms of market capitalization. [6]

To date (April 2019), Standard Ethics has created the following Indices:

The way Standard Ethics reports on its indices is based on full disclosure.

National Ratings

This is the situation for sovereign nations with a Standard Ethics Sustainability Rating as of April 2019. In 2013, Standard Ethics was the first to assign the rating to the Vatican City State. [7]

CountryRatingOutlookDate
Flag of Argentina.svg  Argentina EOctober 2015
Flag of Australia (converted).svg  Australia EE+October 2015
Flag of Austria.svg  Austria EE−March 2020
Flag of Belgium (civil).svg  Belgium EEE−October 2015
Flag of Brazil.svg  Brazil EE−April 2014
Flag of Bulgaria.svg  Bulgaria EE−April 2014
Flag of Canada (Pantone).svg  Canada EEE−March 2018
Flag of Chile.svg  Chile E+April 2014
Flag of the People's Republic of China.svg  China E−Nov 2018
Flag of the Czech Republic.svg  Czech Republic EE−October 2016
Flag of Denmark.svg  Denmark EEEJune 2016
Flag of Egypt.svg  Egypt E−April 2014
Flag of Estonia.svg  Estonia EE−April 2014
Flag of Finland.svg  Finland EEE−October 2015
Flag of France.svg  France EEE−April 2014
Flag of Germany.svg  Germany EE+April 2014
Flag of the United Kingdom.svg  United Kingdom EEE−March 2017
Flag of Greece.svg  Greece EEJanuary 2015
Flag of Hungary.svg  Hungary ENegativeMarch 2020
Flag of Iceland.svg  Iceland EEEApril 2014
Flag of India.svg  India EUnder monitoringApril 2014
Flag of Ireland.svg  Ireland EEE−April 2014
Flag of Israel.svg  Israel E+April 2014
Flag of Italy.svg  Italy EE+March 2020
Flag of Japan.svg  Japan EEApril 2014
Flag of Luxembourg.svg  Luxembourg EE+October 2015
Flag of Mexico.svg  Mexico EE−April 2014
Flag of the Netherlands.svg  Netherlands EE+March 2020
Flag of New Zealand.svg  New Zealand EEE−February 2018
Flag of Norway.svg  Norway EEEOctober 2015
Flag of Poland.svg  Poland EMarch 2020
Flag of Portugal.svg  Portugal EEApril 2014
Flag of Romania.svg  Romania EE−April 2014
Flag of Russia.svg  Russia FUnder monitoringFebruary 2022 [8]
Flag of Slovenia.svg  Slovenia EE+October 2015
Flag of Slovakia.svg  Slovakia EENegativeFebruary 2016
Flag of South Africa.svg  South Africa EE−October 2015
Flag of South Korea.svg  South Korea E+PositiveJuly 2016
Flag of Spain.svg  Spain EE+October 2017
Flag of Sweden.svg  Sweden EEE−May 2020
Flag of Switzerland (Pantone).svg   Switzerland EE+March 2020
Flag of Turkey.svg  Turkey E−NegativeSeptember 2017
Flag of the United States.svg  USA EENegativeJun 2018
Flag of the Vatican City (2023-present).svg  Vatican City EEApril 2014

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References

  1. "How the World's First Sustainability Ratings Agency Works". Forbes .
  2. "Fresh blow for RBS as ethics agency gives them an E- rating".
  3. Stachowiczstanusch, Agata; Mangia, Gianluigi; Caldarelli, Adele; Amann, Wolfgang (April 2017). Organizational Social Irresponsibility: Tools and Theoretical Insights. ISBN   9781681237602.
  4. Cash, Daniel (17 December 2018). The Role of Credit Rating Agencies in Responsible Finance. ISBN   9783030037093.
  5. As explained in a scientific publication of 2002: Jacopo Schettini Gherardini, "Introduzione" in "Etica, futuro e finanza", Schettini G. J. e Schettini G. L. (a cura di), Il Sole 24Ore, marzo 2002, Milano, Pag.9
  6. "Borsa: Quotazioni, azioni e titoli - Il Sole 24 Ore Mercati".
  7. "Vatican City State receives elevated Standard Ethics Rating".
  8. "Standard Ethics cuts Russia sustainability rating to lowest rung". Reuters. 24 February 2022.