Is Siemens’ Anti-Corruption Program Enough?

By Damion Rallis, Senior Research Associate

Since 2007, German multinational engineering and electronics giant Siemens AG (ETR:SIE; NYSE:SI) has been slowly recovering from a number of high-profile cases of price fixing and bribery. Issues of this magnitude, though resolved at the legal level, continue to dent the public image of Europe’s largest industrials company—Siemens was included in a list last week entitled “10 Evil Corporations You Buy From Everyday. The company’s stock still remains off its 2007 high, as the shares traded on the Frankfurt Stock Exchange have lost 28% of their value since this time. While we are not suggesting the corruption scandals have been the sole factor affecting Siemens’ share price, they have, however, had considerable influence over our overall assessment of the company’s long-term risk. Siemens current “D” rating is highlighted by its Social component assessment of “F.” Ongoing problems in this area threaten to drive the company’s overall ESG rating down to an “F”.

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