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ADR-0010 — Universal rule layer (UN-prefixed rules)

Status: Accepted (retrospective) Date: 2026-05-20 Supersedes: — Superseded by: —

Context

Migration 004_seed_non_financial_rules.sql introduced six rules with the UN- prefix and applicable_sectors='ALL':

  • UN-E1 — Climate commitments
  • UN-S1 — Human rights policy & due diligence
  • UN-G1 — Sustainability reporting quality
  • UN-G2 — Board independence & ESG oversight
  • UN-G3 — Board diversity
  • UN-G4 — Governance controversies (24m)

These rules are evaluated against every institution regardless of GICS sector. They sit alongside the financial-sector rules (applicable_sectors='40') introduced earlier and the non-financial sector-specific rules (NF- prefix, various sector codes) introduced in the same migration.

No ADR was written at the time. Commit 9aa3872 (cycle 8, 2026-05-20) is the only in-repo record, and that commit was about surfacing UN rules in the /methodology rule catalogue — not about the decision to add them. This ADR records the design decision retrospectively so the universal-rule layer has documented provenance before v1.5 work begins.

Decision

The rule catalogue has three layers of applicability:

  1. Universal rules (applicable_sectors='ALL') — fire on every institution regardless of sector
  2. Financial sector rules (applicable_sectors='40') — fire only on GICS 40 (Financials)
  3. Non-financial sector rules (NF- prefix, sector-specific codes) — fire on the matching non-financial sectors

The six UN-prefixed rules form the universal layer. They cover behaviours that any institution can reasonably be expected to address irrespective of what it sells or finances: climate commitments, human rights due diligence, sustainability reporting, board governance, and governance controversies.

The universal layer is additive — universal rules do not override sector-specific rules. Where a universal rule and a sector-specific rule cover related ground (for example, financial-sector E1 financed emissions and universal UN-E1 climate commitments), both fire and both contribute to coverage and the coverage-weighted mean independently. This is consistent with ADR-0001: coverage and confidence are per-rule, propagation is unweighted at the catalogue level.

Naming

The UN- prefix is mnemonic for "universal" and was chosen because the rules align broadly with the kinds of norms set out in the UN Global Compact principles (human rights, labour, environment, anti-corruption). The alignment is descriptive, not literal:

  • UN-E1 (climate) and UN-S1 (human rights) map cleanly to UN Global Compact principles 1–9
  • UN-G1 (reporting quality) aligns with the spirit of UN Global Compact's Communication on Progress requirement
  • UN-G2 (board independence), UN-G3 (board diversity), and UN-G4 (governance controversies) are universal corporate-governance norms not specific to the UN Global Compact — closer in spirit to OECD Corporate Governance Principles and ICGN guidance

The prefix should be read as "universal" rather than "UN Global Compact compliance." A future ADR could refine the prefix scheme if more universal-rule layers emerge (for example, OECD- for governance norms, ILO- for labour); for now, six rules across three ESG pillars do not warrant that complexity.

Consequences

Intended consequences

  • Honest coverage for non-financial institutions in the v1 pilot. Without the universal layer, the four non-financial pilot institutions (Amazon, Caterpillar, Unilever, IKEA) would score against NF- sector-specific rules only — a thin catalogue. The universal layer ensures every institution has a meaningful set of rules to score against from day one.
  • Common ground for cross-sector comparison. Universal rules are the only rules that fire across both financials and non-financials. They provide the comparison surface that makes mixed-sector peer groups (sub-industry fallback ladder per cycle 1 design note) meaningful.
  • Forward extensibility. New universal-applicability behaviours can be added under the same prefix without an ADR refresh, provided they satisfy the "fires on every institution regardless of sector" criterion.

Verified consequences

  • The /methodology rule catalogue surfaces 27 rules across 7 themes, of which 6 are UN-prefixed (verified 2026-05-20 cycle 8 walk-through).
  • Barclays detail page rule evaluation shows UN-E1 / UN-G1 / UN-G2 / UN-G4 alongside sector-specific rules; UN-S1 and UN-G3 visible in the catalogue and applicable to Barclays per the universal applicability rule (verified same walk-through).

Consequences to verify

  • UN-G4 / G7 overlap. Both rules cover "Governance controversies (24m)" and both source from google-news-rss. If both fire on the same article, the institution is penalised twice for the same finding. Worth confirming during the next news-driven scraper cycle (parked queue: NGO target lists / Google News scrapers). Resolution options: dedup at scraper level, retire one rule, or differentiate scope (G7 = "ethics & conduct events," UN-G4 = "broader governance controversies").
  • UN-S1 source mix for non-UK institutions. UN-S1 sources are listed as UK MSA · corporate sites. UK Modern Slavery Act statements are required of companies with UK operations above a turnover threshold; for institutions without UK operations, UN-S1 will rely on corporate-site scraping (parked: IFRS-S2-CORP scraper). Until corporate-site scraping ships, UN-S1 coverage on non-UK non-financial institutions will be no-data. Honest, not a flaw, but a sequencing constraint to track.
  • Confidence semantics for universal rules sourced from sector-specific registers. When a non-UK institution returns no-data on UN-S1 because UK MSA doesn't apply to it, the confidence should reflect "source not applicable" rather than "source applicable but no data found." Today the engine treats them identically. Worth revisiting if confidence drift bites.

Alternatives considered

Option α — only sector-specific rules, no universal layer. Rejected. Would require duplicating rules across every sector taxonomy (financials, consumer staples, industrials, etc.) — high maintenance cost, and behaviours like board governance and human rights due diligence really are universal. Sector-specific duplication is the wrong shape for a sector-agnostic norm.

Option β — universal rules with a generic prefix (e.g. U- or ALL-). Considered. The UN- prefix carries connotative weight (alignment with UN Global Compact–style norms) that a generic prefix would lose. The alignment is descriptive rather than literal, but the prefix communicates the kind of rule rather than just its applicability — which is information worth keeping in the name. Worth revisiting if other universal layers emerge (see Naming).

Option γ — make the universal rules part of the financial-sector catalogue, with non-financial-sector "imports." Rejected. Inverts the logical relationship: universal behaviours are not financial behaviours that happen to extend to non-financials. Storing them as sector-specific with import flags would muddle the catalogue's structure.

  • ADR-0001 (coverage-weighted scoring) — universal rules participate in coverage-weighted scoring the same way sector-specific rules do. No special handling.
  • ADR-0005 (rule grouping) — universal rules are grouped into UI themes alongside sector-specific rules, per the existing theme mapping. UN-E1 sits in Climate & nature, UN-S1 in Human rights & community, UN-G1 in Frameworks & disclosure, UN-G2 / UN-G4 in Other governance, UN-G3 in Employee & inclusion.
  • ADR-0008 (hard-exclusion flags) — flags use the same "universal applicability, sector-differing evaluation" pattern as rules. The universal-rule layer is the rule-table equivalent.
  • ADR-0009 (GICS classification for non-financial pilot institutions) — GICS classification determines which sector-specific rules fire. Universal rules are not affected by GICS classification.