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‘Ethical index’ launched to measure Italian banks against international standards

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Standard Ethics, an independent sustainability rating agency based in London, has launched an index to measure the corporate social responsibility (CSR) of Italian banks.

The Standard Ethics Italian Banks Index will monitor the stock market’s reaction to the organisations’ corporate governance, according to principles indicated by the UN, the EU and the Organisation for Economic Co-operation and Development (OECD).

The index is the third in a series that will provide tools to scrutinise the sustainability of banks, starting from 2013. The other ones are the Italian Index and the Best in Class Index.

The index aims to help investors evaluate the performances of the banks by looking at their administration, transparency, independence of boards and management of balance sheets.

According to the index, the banks that have performed best in accordance to the international standards are Unicredit, Intesa Sanpaolo and the Banca Popolare dell’Emilia Romagna, while among worst performers is Mediolanum Bank, whose major shareholder is the Fininvest Group, the financial holding company owned by Silvio Berlusconi.

The index is exclusively focused on corporate governance, because, as Standard Ethics explained, “conflicts of interests and uncertainties can exist also among CSR consultancies that provide listed indices, many of which are often ambiguous”.

Therefore, it does not take into account performances related to other aspects of environmental, social and governance (ESG) such as the banks’ policies on environmental and social issues.

Further reading:

Barclays and MSCI launch cluster of sustainable investment indices

Dow Jones launches ‘first’ sustainability index for emerging markets

90% of investors say CSR and sustainability reports are ‘essential’

Stock exchanges announce commitment to sustainable investment

FTSE launches new environmental index

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