Introduction
SYNE Ratings is a global provider of sustainability measurements, ESG Ratings, climate risk management and risk analysis. With a strong commitment to integrity, transparency, and objective analysis, SYNE has built a trusted reputation in the sustainability and responsible investment space.
In December 2023, the ESG Data and Ratings Working Group - established by the International Regulatory Strategy Group and the International Capital Market Association (ICMA) - published its Code of Conduct for ESG Ratings and Data Products Providers (the “Code”). The Code builds on recommendations set out by the International Organization of Securities Commissions (IOSCO) in 2021 and outlines six key principles: good governance, securing quality, managing conflicts of interest, ensuring transparency, maintaining confidentiality, and promoting engagement (each referred to as a “Principle”).
As a signatory to the Code, SYNE LIMITED (“SYNE”) is pleased to provide this Annual Statement of Application, outlining how it adheres to each of the six Principles in its operations, methodologies, and governance processes.
SYNE is committed to ongoing alignment with the Code and continues to review and refine its internal practices to meet its requirements. This includes maintaining the highest standards in data quality, operational integrity, and stakeholder engagement.
All capitalized terms used in this Annual Statement of Application, unless otherwise defined herein, shall have the meanings assigned to them in Section 7 (Definitions).
1. Principle on Good Governance
ESG ratings and data products providers should ensure appropriate governance arrangements are in place that enable them to promote and uphold the Principles and overall objectives of the Code of Conduct.
| Code of Conduct Actions | SYNE Ratings Practices |
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ESG ratings and data products providers should have appropriate governance arrangements in place that:
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SYNE maintains a comprehensive governance framework to support the determination, publication, and oversight of its ESG Scores and ESG Data Products. Multiple dedicated teams contribute to these efforts, each with clearly defined reporting lines, roles, and responsibilities. These structures enable the continuous improvement and implementation of processes aligned with the Principles outlined in the Code.
SYNE ensures that appropriate professional resources and technologies are in place to support sound decision-making and uphold the quality and reliability of its ESG products. The governance model includes a transparent and consistent organizational structure, particularly for ESG ratings analysts, ensuring accountability and role clarity throughout the process. SYNE remains committed to regularly reviewing and refining its governance arrangements to ensure ongoing adherence to the Principles and to support the overall objectives of the Code. |
2. Principle on Securing Quality (Systems and Controls)
ESG ratings and data products providers should adopt and implement written policies and procedures designed to help ensure the issuance of high quality ESG ratings and data products.
| Code of Conduct Actions | SYNE Ratings Practices |
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These policies and procedures should be drafted taking into account the nature, scale and complexity of ESG ratings and data products providers’ respective businesses and should require that ESG ratings/data products are based on:
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As part of SYNE’s commitment to providing high-quality ESG Scores and ESG Data Products, we have implemented policies and procedures that reflect the nature, scale, and complexity of our operations. These controls ensure that our ESG assessments are robust, transparent, and aligned with the expectations outlined in the Code of Conduct for ESG Ratings and Data Products Providers.
SYNE’s ESG Ratings and Data Products are primarily based on publicly disclosed information from issuers, regulatory filings, sustainability reports, and other reliable third-party sources. Where necessary, we supplement public data with additional information sources, including structured engagements, government datasets, or industry-specific disclosures to enhance completeness and accuracy. All data sources used are documented, and SYNE maintains a reasonable level of transparency around the origin and reliability of the information used. SYNE employs rule-based, systematic methodologies that are developed, maintained, and applied consistently across its ESG Ratings and Data Products. These methodologies are designed to be rigorous and are created by dedicated internal teams with cross-organizational input. While SYNE maintains proprietary aspects of its models and algorithms to protect intellectual property, we provide reasonable transparency about the key inputs, indicators, weighting mechanisms, and scoring logic used. Methodologies are reviewed periodically to ensure they remain relevant and effective, and any significant changes are disclosed in a timely and accessible manner. ESG Scores and Ratings produced by SYNE are based on a thorough and systematic analysis of all relevant and available data at the time of assessment. Our analysts apply consistent frameworks in line with our published methodologies to evaluate entities on multiple dimensions of ESG performance. All scoring decisions are subject to internal review procedures to ensure accuracy, consistency, and objectivity. The evaluation process is supported by technologies and tools designed to facilitate data integrity and minimize analytical bias. |
Furthermore, having regard to the nature, scale and complexity of their respective businesses, ESG ratings and data products providers should also ensure:
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SYNE monitors and updates its ESG Ratings based on the applicable methodologies. The ratings may be updated upon request from the issuer or when new material information becomes available. Where applicable, SYNE also conducts periodic reviews of its ESG Ratings and Data Products to maintain accuracy and alignment with current data.
SYNE has formal procedures in place to regularly review and, where necessary, update its ESG methodologies to reflect evolving market standards, regulatory guidance, and stakeholder expectations. When changes are made, SYNE communicates these to stakeholders in a transparent and timely manner, including the potential impact of such changes on existing ESG Ratings and Data Products. Where appropriate, SYNE may also seek external feedback prior to implementing significant updates to its analytical frameworks. SYNE maintains comprehensive internal records to support the development, issuance, and oversight of all ESG Ratings and Data Products. This includes documentation of data sources, analytical considerations, internal review decisions, and methodological applications. These records support the integrity and auditability of our processes. SYNE allocates sufficient personnel and technological resources to ensure high-quality, consistently applied ESG assessments. This includes:
SYNE also considers and appropriately responds to material information brought to its attention by covered entities or users, as per Principle 6 of the Code. SYNE is committed to maintaining a team of ESG analysts who uphold the highest standards of professionalism, competence, and integrity. New analysts undergo structured onboarding and technical training upon joining SYNE. Ongoing professional development opportunities are provided to ensure continued growth and subject-matter expertise. SYNE conducts annual performance evaluations and compliance certifications and implements a surveillance program to ensure that analytical personnel carry out their responsibilities ethically and in good faith. |
| Finally, ESG ratings and data products providers could consider providing ESG ratings and data products to clients in a machine-readable format. | SYNE delivers its ESG Ratings in machine-readable formats through Application Programming Interfaces (APIs), enabling seamless integration into client systems. These ratings are also accessible via SYNE’s proprietary platforms and supported third-party distribution channels. |
3. Principle on Conflicts of Interest
ESG ratings and data products providers should adopt and implement written policies and procedures designed to help ensure their decisions are independent, free from political or economic interference, and appropriately address actual or potential conflicts of interest that may arise from, among other things, the ESG ratings and data products providers’ organisational structure, business or financial activities, or the financial interests of the ESG ratings and data products providers and their officers and employees.
ESG ratings and data products providers should identify, avoid or appropriately manage, mitigate and disclose actual or potential conflicts of interest that may compromise the independence and integrity of the ESG ratings and data products providers’ operations.
| Code of Conduct Actions | SYNE Ratings Practices |
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ESG ratings and data products providers should:
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SYNE has established internal policies and procedures to identify, manage, mitigate, and, where necessary, disclose actual, potential, or perceived conflicts of interest that may affect the objectivity of its ESG Ratings and Data Products. These apply at both the organizational and individual employee level.
Key standards include:
SYNE has proactively identified potential conflicts and implemented controls to manage or minimize them where avoidance is not possible, ensuring the continued integrity of its ESG assessments. SYNE is committed to transparency in managing conflicts of interest. Our approach is outlined in “Conflicts of Interest Related to ESG Ratings and ESG Data Products,” which details the measures we take to avoid and mitigate potential conflicts. These controls are designed to uphold the highest ethical standards and provide stakeholders with clear insight into how SYNE maintains objectivity and impartiality in its ratings process. |
ESG ratings and data products providers should take steps to help ensure that any existing or potential business relationship between them (or their affiliates) and any entity or any other party for which they provide ESG ratings or data products would not affect the integrity of the ESG ratings and data products being offered to those entities or other parties. These steps could include (but are not limited to) the following measures in respect of appropriate staff:
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To ensure that existing or potential business relationships do not compromise the integrity of its ESG Ratings and Data Products, SYNE has implemented the following staff-related measures:
SYNE has adopted Securities Trading Procedures that restrict employees from engaging in securities or derivatives transactions that could create actual or perceived conflicts of interest related to ESG Ratings or Data Products. SYNE has established appropriate reporting lines and compensation structures designed to prevent conflicts of interest. ESG Ratings analysts are evaluated and compensated independently of any direct influence from entities they assess, helping to safeguard analytical impartiality. SYNE ensures that ESG Ratings analytical personnel are not compensated or evaluated based on the amount of revenue generated from the entities they rate or interact with. This policy helps maintain the independence and objectivity of ratings outcomes. Where consistent with confidentiality, regulatory, and contractual requirements, SYNE discloses potential conflicts of interest in its ESG Ratings reports. This includes the general nature of any relevant business or financial relationships that may exist with rated entities. These measures reflect SYNE’s ongoing commitment to high ethical standards and the integrity of its ESG assessments. Analysts must disclose any personal relationships that could give rise to actual or potential conflicts of interest, enabling SYNE to take appropriate steps to mitigate them. Analysts are strictly prohibited from soliciting or accepting any form of payment, gifts, favors, or entertainment from rated entities or their representatives. |
4. Principle on Transparency
ESG ratings and data products providers should make adequate levels of public disclosure and transparency a priority for their ESG ratings and data products, including their methodologies and processes to enable the users of the product to understand what the product is and how it is produced, including any potential conflicts of interest and while maintaining a balance with respect to proprietary or confidential information, data and methodologies.
| Code of Conduct Actions | SYNE Ratings Practices |
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ESG ratings and data products providers should, where applicable:
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To promote transparency and informed use of its ESG Ratings and Data Products, SYNE has taken the following steps:
SYNE prioritizes public disclosure and transparency in its ESG offerings, while balancing commercial sensitivities. Methodologies and related evaluation processes for ESG Scores and ESG Data Products are made publicly available on SYNE’s website to ensure openness and accountability. SYNE clearly defines the intended purpose and measurement objectives of its ESG Ratings and Data Products. This includes descriptions outlined in the SYNE Definitions, enabling users to understand the scope, context, and use case of each product. SYNE publishes comprehensive methodology documentation, outlining the principles, data inputs, and processes behind its ESG outputs. This level of detail enables users to fully understand how ESG Ratings and Data Products are derived and ensures confidence in their consistent application. SYNE recognizes that transparency is essential to the integrity and usability of ESG insights and remains committed to maintaining clarity in both its methodology and output. |
ESG ratings and data products providers should, where applicable, publish information that is relevant to understanding their methodologies, subject to any proprietary or confidentiality considerations. This information may include, but is not limited to:
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SYNE provides comprehensive and transparent information regarding the methodologies behind its ESG Ratings and Data Products. This includes, where applicable, the following key details:
Measurement Objective: The measurement objective of the ESG rating is clearly outlined to define the purpose and intended outcome of the assessment. Criteria Used: The criteria used to assess an entity or company are described in detail, providing clarity on the factors that are evaluated in determining an entity's ESG performance. Key Performance Indicators (KPIs): The specific KPIs used to assess each criterion are identified, offering a clear understanding of how each factor is measured. Relative Weighting: The relative weighting of the criteria used in the assessment is provided, allowing users to understand the importance of each criterion in the final rating. Scope of Assessment: Information on the scope of business activities and group entities included in the ESG assessment is disclosed. For example, how a subsidiary may inherit the ESG rating of its parent company is outlined, as applicable. Sources of Information: SYNE discloses the principal sources of qualitative and quantitative information used in the assessment, including whether forward-looking data (such as transition plans), industry averages, estimations, or other methodologies were used when actual data was not available, and how the absence of data was addressed. Time Horizon: The time horizon for the ESG assessment is provided where relevant, with specific time frames noted in each methodology to offer transparency on the period considered for evaluation. Assessment Category Definitions: The meaning of each assessment category is clarified, so users can easily interpret the results and understand the significance of each rating or score. Regular Methodology Evaluation: SYNE regularly evaluates its methodologies against the outputs they produce to ensure they remain relevant and aligned with the objectives of the ESG ratings and data products. This includes a process for reviewing and refining methodologies as necessary. By making this information public, SYNE ensures that its ESG Ratings and Data Products are transparent, reliable, and easy for users to understand, fostering confidence in the assessment process. |
5. Principle on Confidentiality (Systems and Controls)
ESG ratings and data products providers should adopt and implement written policies and procedures designed to address and protect all non-public information received from or communicated to them by any entity, or its agents, related to their ESG ratings and data products, in a manner appropriate in the circumstances.
| Code of Conduct Actions | SYNE Ratings Practices |
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ESG ratings and data products providers should:
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SYNE has adopted and implemented comprehensive written policies and procedures designed to ensure the protection of non-public information shared by entities, in line with confidentiality agreements or mutual understandings regarding the confidential nature of the information. These measures are designed to safeguard the integrity of any information shared with SYNE for the purpose of determining ESG Scores or ESG Data Products.
Non-Public Information Protection: SYNE has established strict policies and procedures to protect any non-public information received from entities. These include the implementation of confidentiality provisions, ensuring that any information shared confidentially is handled appropriately in line with its intended purpose. Use of Non-Public Information: SYNE’s procedures dictate that non-public information can only be used for purposes directly related to the determination of ESG ratings and data products. Any use of such information is strictly governed by the terms of confidentiality agreements between SYNE and the entities providing the information, ensuring that it is not disclosed or used for any unauthorized purposes. Confidentiality Management: SYNE has integrated confidentiality management into its processes for handling non-public information. This includes clear protocols for data protection, ensuring that any terms of engagement, where applicable, are published to inform stakeholders about the measures in place to protect confidential data. Only in specific cases, such as the provision of ESG Provisional Ratings and Second Party Opinions, is non-public information used, and even then, it is treated in accordance with the confidentiality provisions specified in the relevant agreements. SYNE continues to uphold the highest standards in protecting non-public information, in line with its commitment to data confidentiality, integrity, and transparency. |
6. Principle on Engagement (Systems and Controls)
ESG ratings and data products providers should regularly consider whether their information gathering processes with entities covered by their products leads to efficient information procurement for both the providers and these entities. Where potential improvements to information gathering processes are identified, ESG ratings and data products providers should consider what measures can be taken to implement them.
Where feasible and appropriate, ESG ratings and data products providers should respond to and address issues flagged by entities covered by their ESG ratings and data products and by users while maintaining the independence and integrity of these products.
| Code of Conduct Actions | SYNE Ratings Practices |
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Where they collect information from covered entities on a bilateral basis, ESG ratings and data products providers should:
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SYNE does not currently collect information on a bilateral basis for the purpose of developing its ESG Scores and ESG Data Products. Instead, SYNE relies on publicly available data sources and, in certain cases, information provided by third-party data providers who may use questionnaires or surveys to collect relevant ESG data.
Communication of Data Collection Timelines: Since SYNE does not collect information through direct engagement with covered entities, the need to communicate timelines for data collection does not apply. However, where third-party data providers are involved, SYNE expects these providers to adhere to appropriate data collection timelines and processes. Pre-Inputted Information: In cases where third-party data providers use questionnaires or surveys to collect data, SYNE encourages the inclusion of pre-inputted information from publicly available sources or prior submissions from covered entities for review or confirmation, wherever possible. However, SYNE does not directly manage this process and relies on the procedures of the third-party providers. SYNE remains committed to ensuring that the information used in its ESG Scores and ESG Data Products is accurate and derived from reputable and reliable sources, while respecting the processes of third-party data providers. |
ESG ratings and data products providers should:
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SYNE follows a structured engagement process when communicating with companies to ensure transparency and accuracy in the development of its ESG Scores and ESG Data Products. Our goal is to provide clear and accessible communication with covered entities throughout the assessment process. Below are the key elements of our engagement approach:
Clear Contact Point for Queries: SYNE has established a dedicated email address: ratings@syne.com where covered entities can interact with us to address any queries regarding their ESG assessment. This provides a direct and consistent point of contact for engagement. Notification of ESG Rating Process: Where feasible and appropriate, SYNE informs covered entities of the anticipated ESG rating process. Corporate-rated entities will receive notifications approximately 30 days in advance of their expected ESG Rating action date. However, we do not typically inform rated entities of the principal categories of data used in the ESG rating process right before publication. Error and Omission Reporting: SYNE allows rated entities and users to raise concerns regarding any factual errors or omissions in the ESG rating or ESG Data Product, including the underlying data used. Rated entities can access their underlying data through the SYNE online issuer portal, enabling them to identify and correct potential inaccuracies. Feedback on our ESG Scores and Data Products is encouraged to promote transparency. Terms of Engagement: SYNE has published detailed Procedures of Engagement with Rated Entities on our website, outlining how we typically interact with companies, when data will be requested, and the opportunities available for review. These procedures ensure transparency and clarity throughout the engagement process. |
7. Definitions
- “Companies” refers to companies that have been assessed by SYNE.
- “ESG” stands for “environmental”, “social” and “governance”.
- “ESG Reported Data” refers to any raw ESG data that (i) is collected and aggregated from Companies’ public disclosures or from other publicly available information, and (ii) does not entail any estimations, calculations or analysis. ESG Reported Data does not include an ESG Data Product or ESG Score.
- “ESG ratings/data products provider” means an entity whose activities involve the provision of ESG ratings/scores and/or data products.
- “ESG data product” is a product provided, or marketed as providing either a specific environmental, social, or governance focus or a holistic ESG focus, or a combined focus on a combination of E, S or G factors, in respect of one or more entities, financial instruments, products or companies’ ESG profile, characteristics, or exposure to ESG, climate-related or other environmental risks or impact on society and the environment. For the purposes of this definition, it is irrelevant whether or not the product is explicitly labelled as an “ESG data product”.
- “ESG rating/score” is a product that is provided, or marketed as providing an opinion, score or other ranking issued using an established and defined ranking system, regarding the environmental, social or governance characteristics or risks in relation to one or more entities’, financial instruments’, or products or one or more companies’ ESG profile, characteristics, or exposure to ESG, climate-related or other environmental risks or impact on society and the environment. For the purposes of this definition, it is irrelevant whether or not the relevant product is explicitly labelled as an “ESG rating or ESG score”.