Standard Ethics assigns the «E + Under monitoring» corporate rating to Juventus. The evaluation, one of 9 expressed in letters and any rating equal to or higher than “EE-” indicates good compliance, indicates that the Piedmontese team “does not comply” with the ESG criteria.
Not only. The rating company, given both the “Suarez case” and the recent investigation by the Turin Public Prosecutor’s Office on Juventus financial statements, adds the expression “under monitoring” to grade “E +”, perhaps to await the development of these events on possible steps future on the rating.
The evaluation is part of an issue program on the major European football clubs listed on the stock exchange (Manchester Utd, Borussia Dortmund and Olympique Lyonnais) for the purpose of composing the SE European Football Index, due out in March 2022. But let’s go in order.
The key points of Juventus
Juventus Football Club Spa receives income mainly from television and media rights, sponsorships, events, retail and online stores. In the panorama of listed football clubs, Juventus is one of the few to have adopted a sustainability report and an ESG report (Environmental, social and governance).
It has a multi-language corporate website, marking its communication towards stakeholders and the international market; takes care, at a strategic level, of some important aspects of sustainability also through a specific committee. The adoption of the principles of gender diversity and independence is recorded in the top management bodies of the company, also in the interest of minority shareholders. In recent years, Juventus has adopted a “Code of Ethics” which in the future could contain more references to international organizations and their documents and guidelines in the ESG field.
The Italian club was analyzed by Standard Ethics before being involved in the “Calciopoli” case and, recently, it was observed in the “super lega“(Project much disputed when announced and rejected by the EU on 30 November last) which led to the downgrading of the American bank Jp Morgan .
What Standard Ethics does
Standard Ethics is an independent agency that issues non-financial sustainability ratings (Esg). The Standard Ethics® brand has been known since 2004 in the world of “sustainable finance” and ESG (Environmental, social and governance) studies to promote standard principles of sustainability and governance from the European Union, the OECD and the United Nations. In the analysis of listed clubs, Standard Ethics treats their alignment with international guidelines on sustainability in the same way that a “normal” company is treated, that is, by evaluating all areas of ESG.
How to arrive at the rating
Did Juventus ask to be evaluated by you? If so, pay for this service, right?
«We do not communicate who requests our service – replies Jacopo Schettini Gherardini, CEO and Research Director of Standard Ethics -, it is eventually up to the company to communicate it. In general, we carry out (since 2004) these benchmark analyzes and create these indices at our own expense by referring to the most significant companies, whether they are clients (solicited) or not (unsolicited). And whether they are customers or not, the analyzes still pass through the eye of an analyst, under the exact same analysis methodology, the same algorithm.
Is Standard Ethics’ judgment requested in the same way as other non-sports clubs requesting evaluation with the main Rating Agencies (I am thinking of Standard & Poor’s, Moody’s and Fitch)?
Yes. To give an example, we do neither more nor less the work of an environmental engineer who is called by a tenant, or by a homeowner, to know the energy class of his home and understand where any problems lie. He will then pay for the service. Then he will contact the architect for the work to be done. Obviously, in our area, the rating is on the issues of governance, reporting and transparency, social and environmental issues.
That is, in a nutshell?
It is an opinion on the distance of companies from the principles and strategies of sustainability and governance coming from the European Union, the OECD and the United Nations. Furthermore, like the aforementioned agencies, we also issue unsolicited ratings. It happens when we have to complete statistical baskets and do broader analyzes like the SE European Football Index.
What impact does your opinion have on the stock of a listed sports company?
We do not believe it will have any impact if the stock moves for economic and financial reasons. In any case, this is a debated topic, under analysis by experts.
What are the other agencies similar to yours that do the same service for sports clubs?
Our model is mono-business, for a single type of customer and we do only one thing: we offer our client companies our rating, and we provide it with a map about their position on sustainability issues and guidelines for making decisions (useful to the customer and his consultants). The rating is only the final summary that a company can exhibit if it so desires. To do this we have regulated ourselves on the model of credit rating agencies and therefore, among other things: we make assessments only through analysts and not with software; we do not do consultancy; we do not offer data to third parties or investors. I know of no others who follow this model so strictly.
When your “SE European Football Index” debuts in March 2022, will it be possible to invest in it with listed stocks as you do with other indices on the various stock exchanges?
Each Standard Ethics index is an Open free sustainability index and provides for full disclosure: from the methodology to the components. It is not a specific asset management product because it is much broader. It goes further. Our first goal is to provide an opportunity for companies to improve themselves and for the public to understand what it means to be sustainable according to international guidelines. We know that this opinion, like many others, can make us reflect and can affect our choices and our sympathies. But we remain focused on our work to offer an accurate, linear, understandable analysis. It is not up to us to give ourselves a different role.