According to Standard Ethics opinion, final evaluations are expressed with nine different Standard Ethics Rating classes:
EEE; EEE-; EE+; EE; EE-; E+; E; E-; F
“EE-” and above means compliant, and indicate also a good capability to respond appropriately to a reputational crisis. “E ”, and below, means not-compliant.
Any single Rating class could have a positive or negative Outlook.
An independent opinion on the level of compliance
Standard Ethics Rating is a Solicited Sustainability Rating that intends to deliver an opinion on the level of compliance by companies and sovereign nations with sustainability and corporate social responsibility (CSR) on the basis of documents and guidelines published by:
- the European Union (EU)
- the Organisation for Economic Cooperation and Development (OECD)
- the United Nations (UN)
The Standard Ethics Rating is issued in accordance with an established methodology that has been put to the test over the last 12 years.
An independent opinion on the level of Reputational Vulnerability
Standard Ethics opinions, are not predictive and, therefore, do not primarily focus on the analysis of positive or negative events and their future effects.
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-à-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 believe that companies with at least a “double E minus” are structurally better positioned to withstand seriously negative events (either economic, operational or reputational) and capable of reducing their potential frequency.
Following this approach, in case of negative events, Standard Ethics analysts evaluate the adequacy of organisational adjustments made by companies to reduce the risk of a similar event taking place again.
Only 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.