The Corporate Monitor database is Australia's most extensive source of public information about the non-financial performance of major Australian companies. We collect data from a very wide range of reputable sources covering a wide range of issues. Data is sent to CEOs for their review prior to publication. Our data is not dependent on a company's willingness to respond to a questionnaire or an agreement to keep relevant information off the record.

Our research services are built from the Corporate Monitor ESG Company Ratings; published monthly in Ethical Investor Magazine. We currently maintain star ratings for Environment, Social and Governance on all operating companies in the ASX 300.


1. Involvement in Gaming, Alcohol, Tobacco,
Defence or Uranium

Corporate Monitor has reviewed all companies in its universe using its database to identify those involved in these activities. A broad approach has been taken to cater for clients wishing to adopt a strict definition to each ethical issue. Companies are classified as having Direct or Indirect involvement in:

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 (eg. 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 (e.g. in the health industry).

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2. Corporate Monitor ESG Company Ratings Process

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.

Information sources can be summarised as: -
• Details on the environmental and social impact of its
  products and services.
• Company reports on its contribution to the environment or
  society.
• Reports from third party sources (such as regulators, NGO's
  and reputable commentators) on its impact on the
  environment, contribution to society or corporate
  governance practice.
• All information dates from 1 January 2001 to current date.

The ratings process rewards companies that demonstrate a range of actions that overcome any inherent negative environmental or social impacts of their products and services. It also rewards companies whose activities have an inherently positive environmental impact or social purpose.

Corporate Monitor has also taken account of each company's industry sector. For example, companies that are fairly neutral in terms of environmental impact (such as technology and service industries) are not expected to make as detailed environmental reporting or management as companies which have a major environmental impact (such as mining companies). Some adjustment is also made for the size, lower profitability and shorter history of smaller companies.
Three separate ratings are provided: -

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3. Individual Ratings Descriptions

Environment Rating
• Environmental impact of products and services - uranium,
  logging, mining, greenhouse gas, plastics, packaging,
  recycling, genetically modified food and energy.
• Environmental reporting.
• Environmental management.
• Penalties for environmental compliance.
• Environment awards.
• Pollution levels to air, land, and water

Social Rating
• Community relations and philanthropy.
• Human rights.
• Indigenous issues.
• Involvement in weapons and defence equipment.
• Products associated with social problems -
  alcohol, tobacco, gaming.
• Employee Relations – occupational health & safety, employee share schemes, discrimination, unfair dismissal and union disputes.

Governance Rating
• Legal compliance - corporate governance, trade practices,
  fair trading.
• Instances of organised shareholder activism or complaints
  on behalf of shareholders.
• Governance awards and commentators.
• CEO Remuneration.
• Executive, Director and Auditor remuneration levels.
• Board committee structures and independence
• Concentrated shareholdings

A commonly used 5 Star Rating System is used. A 3 Star Rating should be considered an acceptable level of performance in each area. The Corporate Monitor ESG Company Ratings should not be taken as an indication of investment merit.

An interpretation of each rating follows: -

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