Methodology

Corporate Monitor’s research services were developed to address a lack of publicly-available analysis of the ESG performance of Australian listed companies.  Aimed primarily at the retail investment market, especially financial advisers and SMSFs, Corporate Monitor’s commitment to providing consistent, relevant and high-quality information of interest to ethical responsible investors has enabled us to gain a strong position in the market in Australia.

Corporate Monitor’s research procedures are robust and transparent, and utilise public information on companies researched. We believe that the Corporate Monitor database is Australia’s most extensive source of public information about the non-financial performance of major Australian companies. We’re proud to be able to offer E, S and G ratings for Australian companies dating back to 2001.

If you have any queries about the nature of our research please contact us at Corporate Monitor.

Corporate Monitor Ratings Spreadsheet

Corporate Monitor ratings are based on data collected from a broad selection of reputable sources covering a wide range of issues. The Corporate Monitor Company Ratings tables are reviewed and published monthly. Our monthly newsletter Best Bits tracks changes to company ESG ratings as well as the reason for the change.

ESG Star Ratings

Three separate ratings are provided: Environment, Social and Governance and a commonly used 5 Star Rating System is applied.

The ratings process gathers a wide range of information to gain a perspective on the environmental impact, social engagement and corporate governance of each company.

We seek to identify companies demonstrating a range of actions that overcome any inherent negative environmental or social impacts.  We also aim to recognise companies whose activities have an inherently positive environmental impact or social purpose.

Corporate Monitor’s ratings take account of each company’s industry sector. For example, companies with comparatively low environmental impacts (such as technology and service industries) are not expected to have as comprehensive environmental reporting or management as companies with significant environmental impacts through their operations (such as resource and energy companies).

Each company receives a star rating out of 5 for each of Environment, Social and Governance. An interpretation of each rating follows:

Rating Environment Social Governance
Adverse Adverse Questionable
★★ Developing Disengaged Patchy
★★★ Compliant Responsive Compliant
★★★★ Sustainable Engaged Proactive
★★★★★ Best Practice Best Practice Best Practice

Sustainability Score and Deciles

The Corporate Monitor ratings are also used to calculate a company’s Sustainability Score and Decile.

To calculate the Sustainability Score individual company ratings are first weighted as follows: 45% for Environment, 30% for Social and 25% for Governance. This allows a weighted average ESG Company Rating ranging from 1-5 to be calculated. This weighted average score is then divided by 5 and converted into a percentile to give the Sustainability Score.

The Sustainability Score can then be placed into Deciles based on the scores of each company within the Corporate Monitor Universe.

Activities-based screening

Industry screening can reflect both an investor’s concerns about potential future investment risks, and also the values they wish to apply to their investment approach.  Corporate Monitor subscribers are able to access information identifying a company’s Direct or Indirect involvement in specific activities, as set out below:

Gaming

Direct: Core business of owning or operating a gaming related business or manufacture and supply of gaming equipment and systems.

Indirect: Servicing gaming equipment and systems or owning/operating a gaming related business as a non-core activity.

Alcohol

Direct: Manufacture, distribution or sale of alcoholic beverages as a core business.

Indirect: Sale of alcoholic beverages as a non-core business or core business in major alcoholic drink inputs (e.g. malt, wine grapes).

Tobacco

Direct: Manufacture and distribution of tobacco related products.

Indirect: Sale of tobacco related products as a non-core business.

Defence

Direct: Supply of weapons or weapons components.

Indirect: Manufacture or sale of equipment, infrastructure, IT, communication services, transport or logistics or maintenance services.

Uranium

Direct: Uranium exploration, mining, or generation of power.

Indirect: Use of uranium for other purposes (for example in the healthcare sector).

Fossil Fuels

Direct: Extraction of fossil fuels (e.g. coal, oil and gas), or generation of power using fossil fuels.

Indirect: Services to the fossil fuel industry such as financing, engineering, contractors, waste management and transport (including pipelines).