Standard Ethics Aei
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|
 | |
| Industry | Ratings |
|---|---|
| Founded | 2004 |
| Headquarters | , |
Key people | Blanche Ullens de Schooten (Chairman) |
| Products | Solicited Sustainability Ratings |
| Services | Sustainability 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]
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
[edit]The Standard Ethics Rating (SER) is a Solicited Sustainability Rating (SSR) evaluating how well companies and sovereign nations comply with the sustainability and corporate governance guidelines published by the United Nations (UN), the Organization for Economic Co-operation and Development (OECD), and the European Union (EU).[4]
The rating does not use weightings and KPI-based analyses or indicators but applies a 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 a standardized model like the SER could bring a competitive advantage.[5]
The methodological approach of Standard Ethics was first introduced in 2001, and its ratings are based on a scale comprising nine letter grades:[6] 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
[edit]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.[7]
To date (April 2019), Standard Ethics has created the following Indices:
- SE European 100 Index (composed of the 100 largest European listed companies based on market capitalization, with a Standard Ethics Rating).
- SE Italian Index (40 companies within the FTSE-MIB index of the Italian Stock Exchange that have been assigned a Standard Ethics Rating).
- SE Italian Banks Index (composed of all Italian banks listed on the Italian Stock Exchange with a Standard Ethics Rating).
- SE UK Index (composed of the 40 largest British-listed companies with a Standard Ethics Rating).
- SE French Index (composed of the 40 largest French-listed companies with a Standard Ethics Rating).
- SE German Index (composed of the 30 largest German-listed companies with a Standard Ethics Rating).
- SE Belgian Index (composed of the 20 largest Belgium-listed companies with a Standard Ethics Rating).
- SE Spanish Index (composed of the 30 largest Spanish-listed companies with a Standard Ethics Rating).
- SE Dutch Index (composed of the 30 largest Dutch-listed companies with a Standard Ethics Rating).
- SE Swiss Index (composed of the 30 largest Swiss-listed companies with a Standard Ethics Rating).
- SE European Banks Index (composed of the 40 largest European-listed banks with a Standard Ethics Rating).
- SE Best in Class European Index (composed of the 30 European-list companies with the highest Standard Ethics Rating).
- SE US Index (composed of the 20 largest US-listed companies with a Standard Ethics Rating).
The way Standard Ethics reports on its indices is based on full disclosure.
National Ratings
[edit]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.[8]
| Country | Rating | Outlook | Date |
|---|---|---|---|
 Argentina |
E | October 2015 | |
 Australia |
EE+ | October 2015 | |
 Austria |
EE− | March 2020 | |
 Belgium |
EEE− | October 2015 | |
 Brazil |
EE− | April 2014 | |
 Bulgaria |
EE− | April 2014 | |
 Canada |
EEE− | March 2018 | |
 Chile |
E+ | April 2014 | |
 China |
E− | Nov 2018 | |
 Czech Republic |
EE− | October 2016 | |
 Denmark |
EEE | June 2016 | |
 Egypt |
E− | April 2014 | |
 Estonia |
EE− | April 2014 | |
 Finland |
EEE− | October 2015 | |
 France |
EEE− | April 2014 | |
 Germany |
EE+ | April 2014 | |
 United Kingdom |
EEE− | March 2017 | |
 Greece |
EE | January 2015 | |
 Hungary |
E | Negative | March 2020 |
 Iceland |
EEE | April 2014 | |
 India |
E | Under monitoring | April 2014 |
 Ireland |
EEE− | April 2014 | |
 Israel |
E+ | April 2014 | |
 Italy |
EE+ | March 2020 | |
 Japan |
EE | April 2014 | |
 Luxembourg |
EE+ | October 2015 | |
 Mexico |
EE− | April 2014 | |
 Netherlands |
EE+ | March 2020 | |
 New Zealand |
EEE− | February 2018 | |
 Norway |
EEE | October 2015 | |
 Poland |
E | March 2020 | |
 Portugal |
EE | April 2014 | |
 Romania |
EE− | April 2014 | |
 Russia |
F | Under monitoring | February 2022[9] |
 Slovenia |
EE+ | October 2015 | |
 Slovakia |
EE | Negative | February 2016 |
 South Africa |
EE− | October 2015 | |
 South Korea |
E+ | Positive | July 2016 |
 Spain |
EE+ | October 2017 | |
 Sweden |
EEE− | May 2020 | |
 Switzerland |
EE+ | March 2020 | |
 Turkey |
E− | Negative | September 2017 |
 USA |
EE | Negative | Jun 2018 |
 Vatican City |
EE | April 2014 |
References
[edit]- ^ "How the World's First Sustainability Ratings Agency Works". Forbes.
- ^ "Fresh blow for RBS as ethics agency gives them an E- rating".
- ^ Stachowiczstanusch, Agata; Mangia, Gianluigi; Caldarelli, Adele; Amann, Wolfgang (April 2017). Organizational Social Irresponsibility: Tools and Theoretical Insights. ISBN 9781681237602.
- ^ Cash, Daniel (17 December 2018). The Role of Credit Rating Agencies in Responsible Finance. ISBN 9783030037093.
- ^ "Business Ethics Rating Understanding Business Ethics Ratings: A Comprehensive Guide". FasterCapital. Retrieved 8 September 2024.
- ^ 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
- ^ "Borsa: Quotazioni, azioni e titoli - Il Sole 24 Ore Mercati".
- ^ "Vatican City State receives elevated Standard Ethics Rating".
- ^ "Standard Ethics cuts Russia sustainability rating to lowest rung". Reuters. 24 February 2022.