CEQ accounts for cultural diversity, political pluralism and scientific uncertainty. It aggregates thousands of documents extracted from diverse sources and classified according to 50 sustainability criteria inspired by the
Global Reporting Initiative. The extra-financial ratings are used by indexes of sustainable Swiss equities. In 2007 Covalence partnered with
Thomson Reuters and
Bloomberg distributing EthicalQuote through their platforms. Research sponsored by the
Journal of Business Ethics states there is an equity valuation effect of press releases of upgrades or downgrades reflected in the CEQ . The research encompasses a joint test of the value relevance of the index and the impact of ethical reputation on a firm's value. A significant causal relationship is identified between stock market reactions and the changes in the CEQ. Particularly, disclosures of positive and negative changes in firm ethical performance cause increases or decreases in firm value. Second, the research found cross-sectional analysis indicates a positive association between changes in firm ethical performance and both its financial performance and its financial reporting quality. The results measures taken to increase ethical performance are associated with positive benefits to shareholders. A desire to look at industries that have "a heavy impact on culture and the way people think” inspired a collaboration in reporting by Covalence SA,
Ethical Investment Research Service (EIRIS) and the WWF. The initiative is not to " criticise these companies but to make a general point: responsible business practices can be a value driver, but they need to be systematically embedded in the DNA of a company, .... Comparison can be a powerful motivation to change.” said Mr Kleanthous (a senior policy adviser at WWF). ==References==