Global Standards Engagement

Companies are expected to operate within international standards related to human rights, society, labor and the environment. When companies don’t adhere to these standards, incidents may occur that result in reputational damage and shareholder value destruction.

Sustainalytics’ Global Standards Engagement is an incident-driven engagement service that offers investors a collaborative tool for active ownership with rich information for investment decision-making and reporting. Alongside investor clients, we engage with companies that severely and systematically violate international standards, such as the United Nation’s Global Compact Principles and the OECD Guidelines for Multinationals. Our objective is not only to resolve the incident, but also to improve the company’s future ESG performance and risk management in order to ensure incidents don’t occur again in the future.

More than 20,000 issuers from major world indices are currently monitored for incidents on an ongoing basis and this universe can be expanded with additional companies on client request.

As part of our Global Standards Engagement, we have engaged with 171 companies in 2019, reaching 194 milestones and resolving 28 cases.

Key Features and Benefits

1

Demonstrate your commitment as a responsible owner
Responsible investing goes beyond stock selection. Today, institutional investors are expected to take steps to being active and engaged shareholders that view corporate accountability as a path to achieving greater long-term value.

2

Manage reputational risks
Let us help you manage reputational risks by applying a compliance-focused approach to engaging with companies that are non-complaint with international norms.

3

Collaborate and pool resources
Determine your level of involvement, for example, by taking an active part in engagement dialogues, conference calls and teaming up with other investors.

4

Track progress with live, fully-transparent updates
Access the latest updates on our fully-transparent web-based platform where you can find the most recent updates, like email correspondence, meeting minutes and more.

5

Drive corporate change
Engagement contributes to positive changes in corporate behavior tied to ESG commitments, which can create added long-term value when these changes are financially material.

How does Global Standards Engagement Work?

1. Systematic monitoring of companies for incidents

We monitor more than 700,000 news items on a daily basis to identify potential incidents involving a universe of over 20,000 issuers across the globe.

700,000+ news items
20,000+ issuers

Global Compact &
OECD Guidelines

2. Research and assessment

Once an incident has been flagged, our global research teams starts gathering facts and assesses the case against a set of international conventions and guidelines for the environment, human rights and business ethics. International standards include the United Nation’s Global Compact, the OECD Guidelines for Multinationals, UN Guiding Principles, human rights conventions, labor rights conventions, environmental conventions and weapons-related conventions.

3. Engagement dialogue

Sustainalytics consistently engages with all watchlist and non-compliant companies alleged of violating international norms to establish what actually occurred. Findings from the initial meetings are summarized in dialogue sections of case reports and an engagement change objective is developed in line with industry best practices.

Incident analysis

Case/company profile
Action plan

4. Company report and engagement strategy

A clear action plan with measurable outcomes and milestones is drawn up to achieve the desired outcomes. Ongoing dialogue is arranged to further investigate the case, which is presented along with a full company profile in the online platform. 

5. Reporting and case closure

Sustainalytics measures engagement by both the company’s response and progress. Rigorous criteria are employed to assess whether to close and resolve a case.

Reporting on progress
Archiving cases

RELATED SOLUTIONS

Manage reputational and potential financial risks by identifying companies that breach international norms and standards

A proactive engagement with companies with the greatest unmanaged financially-material ESG risks.

Proactive engagement services that focus on tackling the most challenging ESG issues.

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