Standards for Listed Companies
In principle, Standard Ethics advises that in their Articles of Association, companies formally refer to the Universal Declaration of Human Rights approved by the United Nations on 10 December 1948. Standard Ethics also advises that, in general terms, companies have adapted their structures according to the UN, OECD and EU regulations on sustainability (with particular reference to corporate governance). The basic conditions that listed companies have to meet are as follows: to hold a competitive position and not a monopolistic one and not being linked to cartels; to make sure that their shares are listed and can be bought without restrictions and that they enjoy substantive rights (voting trusts, for instance, are not acceptable); to have widespread ownership of the capital or no conflict of interest; all Board members must be independent of capital ownership and must abide by a Code of Conduct that ensures transparency; to have procedures to check observance of the latest internationally recognized social and environmental standards (according to UN, OECD and EU guidelines). Further positive elements are: transparent staff selection (including managers); an independent internal monitoring body (liaising with the Shareholders Meeting and working at Board level) to check that the Board works in line with the latest UN, OECD and EU standards and principles on conflicts of interest and Corporate Governance; an independent internal monitoring body (e.g. the Audit Committee) which is accountable to shareholders and monitors that the Board works in line with the latest UN, OECD and EU standards and principles on extraordinary accounting and finance; an internal body which reports and facilitates the companys adherence to the latest international social and environmental standards and principles; an external relations and communications department which works in line with the latest standards and principles on sustainability and transparency and applies with due independence the comply or explain principle whereby failure to comply with international guidelines on sustainability has to be duly motivated.
Vulnerability and Risk Analysis
A STANDARD ETHICS RATING is not a forecasting rating nor is it a probabilistic model. Nevertheless, as the economist Irving Fisher used to say: The future casts its shadow on the present. Therefore, the analyses on policies and governance highlight levels of implicit vulnerability vis--vis the future. Vulnerability can come from economic, operational and reputational risks. The latter ones, unlike the most common practices, have been classified by Standard Ethics since 2011 as primary and secondary risks where primary reputational risks are standalone risks not deriving from operational risks. This classification introduces original elements in vulnerability analysis and leads to the belief that companies with at least a double E are structurally better positioned to withstand seriously negative events (either economic, operational or reputational) and capable of reducing their potential frequency.
Assessments of Negative Events
The assessments carried out by Standard Ethics are not predictive and, therefore, do not primarily focus on the analysis of negative events and their future effects, but rather on the adequacy of organizational adjustments made by companies to reduce the risk of a similar event taking place again. If, over a reasonable period of time, suggested solutions appear to be inadequate for the rating assigned to a company, a new rating will be proportionally assigned so that the most suitable level is reached.
Standard Ethics Indices
Each Standard Ethics index is an Open Free Sustainability Index and offers full disclosure: the methodology, selection criteria, weights and calculation formula are public and can therefore be used for free as a benchmark for sustainability and sustainable finance.
For further information on Standard Ethics and its governance, please visit www.standardethics.eu
Legal Disclaimer
The Standard Ethics Rating is the result of statistical and scientific work carried out since 2004 to provide a snapshot of the economic world in relation to ethical principles promoted by large international organizations. Under no circumstances, therefore, does Standard Ethics, by publishing Ratings, intend to solicit the purchase or sale of securities by any issuer.
Standard Ethics est une agence de notation de durabilité autorégulée qui émet des notations de durabilité non financires. En l'absence d'organes de surveillance et de normes législatives internationales pour les notations ESG sollicitées, Standard Ethics a, depuis le début de son activité, procédé une autorégulation en appliquant les modles des agences de notation de crédit.
Les clients de Standard Ethics sont des organismes qui souhaitent bénéficier dune notation (Applicant-Pay Model). Nous ne fournissons pas dactivité de conseil aux investisseurs.
En tant que marque, Standard Ethics est connue depuis 2004 dans le monde de la finance durable et des études ESG (environnementales, sociales et de gouvernance). Elle vise promouvoir les principes standards de durabilité et de gouvernance publiés par l'Union Européenne, l'OCDE et les Nations Unies.
Standard Ethics Rating (SER) sollicités et non sollicités
Le Standard Ethics Rating (SER) est un avis sur la distance qui existe entre un organisme (ou une émission) et les indications internationales en maitire de durabilité.
Il réunit les caractéristiques suivantes: il est sollicité, standard et indépendant; il est émis la demande du client par le biais dun rapport bilatéral direct et régulé; lalgorithme est établi sur la base des indications et des lignes directrices de lUnion Européenne, de lOCDE et des Nations Unies en matire de durabilité et de gouvernance de la durabilité; et laccomplissement de cette tche est incompatible avec la fourniture d'autres services que la notation ou l'évaluation ESG. En appliquant cette méthodologie, l'approche de Standard Ethics peut tre considérée comme éthiquement neutre.
Les politiques sociales, environnementales ou de responsabilité philanthropique qui ne sont pas en ligne avec les directives de durabilité n'ont pas d'effet positif sur la notation. Les notations non sollicitées sont utilisées pour mettre jour ou pour conserver les indices de Standard Ethics, ainsi que pour le classement des pays de l'OCDE. Les principes de standardisation et d'indépendance mentionnés ci-dessus, qui sont la base de l'activité de Standard Ethics, restent valables mme dans ces cas.
Corporate, Security, Country: trois types de rating
Le Corporate SER est assigné un organisme dans son ensemble (quil sagisse dun émetteur ou pas).
Le Security SER est assigné une émission General-Purpose (obligation ou autres outils de dette financire). Néanmoins, lanalyse tient compte de lémetteur, de sa nature et de ses plans industriels, ainsi que de ses stratégies de développement et de durabilité.
Le Country SER évalue les nations OCDE auxquelles au fil du temps se sont ajoutées: Argentine, Brésil, Bulgarie, Chine, Egypte, Inde, Roumanie, Russie, Afrique du Sud et État du Vatican. En évaluant les nations, Standard Ethics favorise les nations ayant une démocratie stable et rodée, visant satisfaire les conditions les plus élevées en termes de droits de lhomme, politiques environnementales, relations avec les Pays en développement, durabilité des structures économiques, susceptibles dassurer de hauts niveaux substantiels et formels de démocratie et de sécurité commune.