ECPI’s proprietary research model focuses primarily on the ESG (Environmental, Social, and Governance) performance factors that determine issuers’ sustainability and intangible market value.

ECPI research covers over 4,000 issuers and maintains one of the world‘s largest sustainability databases.  ECPI research process is both rigorous and disciplined and its proprietary methodology is based only on publicly available information from companies, data provider and media.
ECPI uses an objective, sector-based, best-practices approach to analyzing ESG data of issuers with the objective of translating qualitative data into quantitative indicators, assigning to each issuer a score and a rating.


ECPI COMPANY RATING

ECPI uses a rule-based approach involving approximately 100 key performance indicators to evaluate an issuer’s environmental, social and governance sustainability.

PUBLIC INFORMATION SOURCES

80/86
INDICATORS
8 CATEGORIES
2 SECTIONS
7
13
3/4
6/11
Environmental Strategy and Policy
Environmental Management
Products – sector specific
Production Process – sector specific
ENVIRONMENTAL

Rating (9 notches)
F ⇒ EEE

9
12
11
19
Employees and Human Capital
Community Relations
Markets
Corporate Governance & Shareholders
SOCIAL & GOVERNANCE

Rating (9 notches)
F ⇒ EEE

ESG RATING

Rating (9 notches)
F ⇒ EEE

That analysis produces a score and a rating. ECPI’s proprietary rating scale ranges from “F” to “EEE”, along 9 notches. Rating thresholds may be customized, but its standard ESG methodology generally excludes from the investable universe all companies rated “F”.

RATING
LEVEL
DEFINITION
ECPI COMPANY RATING

EEEEEE-
Very good
The company shows an innovative long-term strategic attitude, strong operational management practices and proactive actions to tackle social and environmental needs.

VERY GOOD

EE+EEEE-
Good
The company shows a clear long-term strategic attitude, sound operational managment practices and positive actions to tackle social and environmental needs.

GOOD

E+EE-
Fair
The company shows a basic long-term strategic attitude, standard operational managment practices and/or average actions to tackle social and environmental needs.

FAIR

F
Poor
The company shows a poor long-term strategic attitude, weak operational managment practices and/or ineffective-negative actions to tackle social and environmental needs.

POOR

NE*
Controversial
The company is involved in controversial sectors or activities.
* Only when applicable / on clients request

In applying its sector screening methodology to corporate equity and bond issuers, ECPI may exclude issuers operating in any controversial sectors specified by its clients. These might include issuers involved in Alcohol, Tobacco, Pornography, Nuclear energy, Military/Defense, GMO food production, Contraception or Gambling. Exclusions are generally determined by the percentage contribution of the controversial sector to the issuer’s total revenues. These exclusion thresholds varied by controversial sector to reflect clients’ preferences or requirements.


ECPI COUNTRY RATING

ECPI Sustainability methodology applied to government issuers is aimed to guarantee investors that the investment portfolio is built exclusively with financial instruments issued by Governments which are compliant with international Environmental, Social and Governance (ESG) standards and without any significant liabilities in any of the aforementioned areas.

Since 1948, when the Universal Declaration of Human Rights was created, nations have begun to recognize the importance of respecting human dignity, the freedom of expression and movement, equal opportunities in the work and political spheres, non-exploitative labour practices, respect for the environment, and a non-belligerent approach to conflicts.

Therefore ECPI developed the Methodology to assess the government’s adherence to principles and to practices in aspects such as respect for human and labour rights; respect for the environment and anti-corruption.

REGULATION

The Methodology assesses the level of compliance of a government with a number of international treaties, conventions and best practices, which represent the international standard.

IMPLEMENTATION

The Methodology verifies the effectiveness of a Government in implementing national legislation compliant with international standards and in enforcing it efficiently.

RECOGNIZED PUBLIC INDICATOR

ENVIRONMENTAL SECTION

Environmental Regulation

(e.g. Basel Convention)

Environmental Implementation

(e.g. Environmental Performance Index – EPI)

SOCIAL SECTION

Social Regulation

(e.g. Human Right Conventions – UN)

Social Implementation

(e.g. Death Penalty – Amnesty International)

GOVERNANCE SECTION

Governance Regulation

(e.g. Doing Business Report – World Bank)

Implementation

(e.g. Corruption Perception Index – Transparency Int.)

ESG RATING

Rating (4 notches)
F ⇒ EEE

RATING LEVEL DEFINITION
EEE Very good Countries display full compliance with international ESG standard, effective implementation, and efficient enforcement.
EE Good Countries display adeguate compliance with international ESG standard, good implementation, and sound enforcement.
E Fair Countries display partial compliance with international ESG standard, acceptable implementation, and basic enforcement.
F Poor Countries display poor overall ESG performance or very poor performance in one single area (Environment, Social or Governance).
NE Controversial Countries retain death penalty and/or are classified not free/partly free in terms of civil liberties and political rights.
* Only when applicable / on clients request

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