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Standard Ethics Aei
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 RatingThe 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 indicesStandard 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:
The way Standard Ethics reports on its indices is based on full disclosure. National RatingsThis 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]
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