Ethos tracks public controversies associated with companies in our database, using publicly-available data from media sources, government agencies and non-governmental organizations. We define a "controversy" as a negative story about a company appearing in one or more credible sources.
Controversy categories
The controversies information we collect falls into 9 categories:
- Company products/services
- Community impact
- Customer or employee discrimination
- Customer privacy
- Environmental responsibility
- Legal/regulatory violations
- Misleading communication
- Oppressive governments
- Public health
Scoring
Ethos assigns each controversy a score from 1 (most controversial) to 10 (less controversial), based on three factors:
- Severity of impact, e.g., were there deaths or injuries involved, or was there significant environmental damage?
- Extent of impact, e.g., how widespread was the impact?
- Involvement of the company, e.g., was the company directly involved or negligent about behavior of supply chain partners?
When assessing the severity of controversies for a fund or portfolio, Ethos looks at the weighted-average controversy scores of fund or portfolio holdings.
Controversies also factor into impact ratings for companies, funds and portfolios, though a controversy does not automatically mean a low impact rating. Companies are penalized for controversies (and more so for severe controversies), but there are many other metrics that go into a company's rating. We believe companies should be rated based on the whole of their actions and outcomes.
Where to find
You can see controversy scores for any company or fund on its profile, under the "Data" tab (alongside other metrics we use to rate the company or fund). You can see severity of controversies for any portfolio from the portfolio's page in your account.
Please reach out to us at support@ethosesg.com with any questions or comments.