belgiumfr
Sustainable Investing Glossary

Corruption definition

Corruption is defined as behavior by individuals that aims to secure a monetary advantage in business or politics through illegal dealings. It typically covers bribery – illegal payments made to secure a contract or service – along with falsifying documents to enhance the value of a product. The word itself derives from the Roman Latin past participle of corrumpere, meaning ‘to mar, bribe or destroy’.

Investopedia defines it as “dishonest behavior by those in positions of power, such as managers or government officials. Corruption can include giving or accepting bribes or inappropriate gifts, double-dealing, under-the-table transactions, manipulating elections, diverting funds, laundering money and defrauding investors.”1

Transparency International, which works to expose corruption among governments, companies and wealthy or powerful people, defines corruption as “the abuse of entrusted power for private gain”.2 This can involve cronyism, where someone’s friends are given valuable contracts outside the normal market tendering process, and nepotism, where a relative is appointed to a position of power even though they are unqualified or unsuitable for the role.

Country Sustainability Ranking

Levels of corruption in countries accounts for 10% of the weighting in the Robeco Country Sustainability Ranking, making it one of the most significant things that analysts look for when assessing how sustainable a nation is. This information is then used as part of the governance factor in ESG when deciding whether to buy that country’s sovereign bonds.

The two sources for it are the Corruption Perception Index, which has been published by Transparency International since 1995, and the Control of Corruption (CoC) Index, which is one of the six Worldwide Governance Indicators that have been published by the World Bank since 1996. The CoC “reflects perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as ‘capture’ of the state by elites and private interests”.3

Some financial crime broadly falls under the banner of corruption, though money laundering and insider dealing are seen as specific crimes in their own right. Ponzi schemes in which profits are paid to investors using the income from newer investors instead of an underlying asset is similarly viewed as financial fraud. The biggest pure source of corruption remains bribery, which has often proved commonplace in emerging markets that lack regulation or a properly functioning judicial system.

See also: Governance; World’s most corrupt country; Country Sustainability Ranking

Many companies including Robeco put limits on the value of gifts that employees can receive as presents or hospitality to avoid charges of undue influence.

1https://www.investopedia.com/terms/c/corruption.asp
2https://www.transparency.org/en/what-is-corruption
3https://info.worldbank.org/governance/wgi/Home/Reports

L’avenir de la mode
L’avenir de la mode
En tant qu’investisseurs à long terme, nous sommes très attentifs à la façon dont les changements durables dans les habitudes de consommation affectent les industries et les entreprises.
28-06-2022 | Vision
Les dilemmes de l’investissement durable : il est temps d’envisager la durabilité et les performances de manière différente
Les dilemmes de l’investissement durable : il est temps d’envisager la durabilité et les performances de manière différente
La question de savoir si investir de manière durable implique de sacrifier de la performance divise les investisseurs et les universitaires depuis des années.
23-06-2022 | SI Dilemmas
Solutions circulaires : Les chaînes d’approvisionnement face à une triple menace
Solutions circulaires : Les chaînes d’approvisionnement face à une triple menace
Quand la certitude du changement climatique se conjugue à l’incertitude géopolitique, les risques pesant sur les chaînes d’approvisionnement sont plus élevés que jamais.
16-06-2022 | Vision
Logo

Décharge légale Agree

Les informations présentes sur ce site Web sont destinées exclusivement aux professionnels. Un investisseur professionnel est : un investisseur qui, à titre professionnel, dispose d'assez de connaissances et d'une expertise et d'une expérience suffisantes pour pouvoir évaluer de manière adéquate les risques financiers liés aux décisions d'investissement prises par lui-même.

Les visiteurs de ce site Web doivent être conscients du fait qu’ils sont eux-mêmes tenus de respecter toutes les lois et règlements en vigueur dans leur pays.

En cliquant sur J'accepte, vous confirmez que vous êtes un investisseur professionnel. Si vous cliquez sur Je n'accepte pas, vous êtes orienté vers la partie réservée aux particuliers.

Je n’accepte pas