Global Standards Screening
Manage reputational and potential financial risks by identifying companies that breach international norms and standards
Overview
Sustainalytics’ Global Standards Screening (GSS) assesses companies impact on stakeholders and the extent to which a company causes, contributes or is linked to violations of international norms and standards.
Investors use GSS to support their due diligence in making investment decisions, to proactively manage reputational and potential financial risks, and to fulfill clients’ norms-based screening and engagement mandates.
Daily screening of 700,000+ news items from
60,000 NGO and media sources for over 20,000 issuers
Improve reputational risk management
Enhance your portfolio’s long-term performance by proactively identifying and managing business conduct related risks.
Ensure your portfolio complies with international norms and standards
Identify companies that violate the Global Compact’s internationally recognized principles for business conduct and align your portfolio holdings to these standards.
Respond to responsible investment mandates
Expand your product suite to cover the fourth-largest responsible investment strategy and respond to relevant client mandates.
Gain an in-depth understanding of incidents
Access qualitative analyses of incidents that consider the company’s accountability, the severity of its impact and the quality of management’s response
1
We screen 700,000+ news items from 60,000 media and NGO sources daily to identify relevant news
4
An oversight committee consisting of senior representatives from Research, Product Management and Quality Control reviews and approves all assessments
2
News items are assessed and classified by a dedicated incidents team
5
Only after the oversight committee’s evaluation is the company classified as Compliant, Watchlist or Non-compliant
3
Incidents are then analyzed on case and company-level and an assessment is made against the relevant Global Compact principle(s) with a forward-looking outlook
6
Clients can access company profiles via the online platform in addition to receiving a quarterly update report
Example of Non-compliant assessment: Company X, a pharmaceutical company
Assessment: In violation of UN Global Compact Principle 1 (Businesses should support and respect the protection of internationally proclaimed human rights)
Framework:
- Severity of Impact: Company X’s pricing model in the US has had a significant negative impact on patients through increased insurance premiums or reduced insurance coverage, depriving patients of much-needed treatments in the absence of viable alternatives
- Company Responsibility: The US authorities criticized company X’s business model as it was largely focused on making strategic acquisitions to establish price hikes for medication. This practice is exceptional compared to all its industry peers
- Company Management: Company X’s former CEO admitted that the company had been too aggressive in raising the prices of some of its drugs. On the other hand, the US authorities have accused the company of withholding documents requested, related to its pricing. This lack of transparency does not give us confidence in its ability to manage the risks associated with this issue
The UN Global Compact is the world’s largest principles-based voluntary initiative consisting of 9,000 companies from 166 countries. UN Global Compact signatories commit to universally-accepted principles on human rights, labor, environmental protection and anti-corruption.
Human Rights
Principle 1
Businesses should support and respect the protection of internationally proclaimed human rights; and
Principle 2
Make sure that they are not complicit in human rights abuses.
Labor
Principle 3
Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
Principle 4
The elimination of all forms of forced and compulsory labour;
Principle 5
The effective abolition of child labour; and
Principle 6
The elimination of discrimination in respect of employment and occupation.
Environment
Principle 7
Businesses should support a precautionary approach to environmental challenges;
Principle 8
Undertake initiatives to promote greater environmental responsibility; and
Principle 9
Encourage the development and diffusion of environmentally friendly technologies.
Business Ethics
Principle 10
Businesses should work against corruption in all its forms, including extortion and bribery.
Demonstrate your commitment as a responsible owner
- Subscribe to Sustainalytics’ Global Standards Engagement to pool resources and let us engage with companies on behalf of you and other investors
- Support company engagement with independent, 3rd party normative assessments of business conduct incidents
DELIVERY OPTIONS
Access our research through our user-friendly investor interface with easy to use screening and reporting tools. You can also access onscreen & PDF reports
Access our research through an internal or a third-party system of your choice Bloomberg, Factset and Markit