Adhering your investment portfolio to the Global Compact Principles.
The Global Compact Compliance Service was developed by Sustainalytics to provide institutional investors with an analysis of companies on their adherence to the Ten Principles of the Global Compact. The Global Compact is a widely adopted initiative of the United Nations and a framework for companies to align their business with international standards on human rights, labour, the environment, and anti-corruption.
Based on information in the Sustainalytics platform – globally the most extensive ESG research database containing company, NGO, and press data of hundreds of sources worldwide – Sustainalytics offers a unique service to help investors identify companies that do not comply with minimum standards of business practice as codified by the principles of the UN Global Compact. The companies covered through this service include 3,000 multinational corporations, including the constituents of the MSCI Core developed and developing markets. Additionally, company research and full portfolio screens are conducted upon request. The analysis and reporting provided to clients through the Global Compact Compliance Service can be used in a flexible manner and is meant to assist investors for the following purposes:
Compliance: The service helps investors to ensure compliance of their portfolio holdings with universally accepted norms relating to social, environmental, as well as business ethics issues. The list of companies considered non-compliant with the Global Compact can therefore be used as a blacklist of companies that are excluded from investment.
Engagement: The non-compliant list can be used as a basis of an engagement strategy in order to identify target companies. To this end, the standard company reports are complemented with key topics for engagement that can form a basis for discussions with management.
Implementation of the PRI: Investors can use the non-compliant list of companies to assist them in the implementation of the
UN Principles for Responsible Investment (PRI). Notably, the list can be used to:
- identify companies exposed to key environmental, social, and governance risks (PRI principle 1);
- assist investors in becoming active owners by means of engagement (PRI principle 2);
- and promote corporate transparency and reporting on key environmental, social, and governance risks by highlighting companies that fail to provide such disclosure.