Ratings Definitions

According to Standard Ethics ESG opinion, final evaluations are expressed with nine different Standard Ethics Rating (SER) grades:

EEE; EEE-; EE+; EE; EE-; E+; E; E-; F

“EE‑” and above indicates full compliance and reflects a strong capacity to manage and respond effectively to reputational crises.  “E ”, and below, means not-compliant.

When an entity is downgraded to “F”, any entities holding its securities and carrying a Standard Ethics Rating may experience a significant negative impact on their own rating.

Any single Rating grade may be assigned a Positive or Negative Outlook.

For further information on our Standard Ethics Rating (SER) definitions, please go to the ESG Definitions page.

An independent opinion on the level of compliance

The Standard Ethics Rating (SER) is a Solicited Sustainability Rating that provides an ESG Opinion on the degree of compliance of companies and financial instruments with Sustainability principles. The assessment is based exclusively on documents and indications issued by the United Nations, the OECD and the European Union.

The Standard Ethics Rating (SER) is issued in accordance with an established methodology that is publicly available on the Standard Ethics website.

An independent opinion on the level of Reputational Vulnerability

Standard Ethics' ESG 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 an “EE-” 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.