Asset owners and asset managers have the opportunity to consider their investments not only from a performance perspective, but also through the broader lens of environmental, social and governance stewardship.
Whether the focus is on climate, plastics, corporate governance, taxation or other sustainability themes, our Thematic Engagement services allow investors to align their interests in addressing specific issues with their engagement activities.
The Thematic Engagement philosophy centres on systemic change and has collaboration, root causes and best practice sharing at its core. The dialogues are aimed at improving engaged companies’ (proactive) risk and impact management, including the related disclosure, as well as their resilience and strategic positioning. At the same time, through parallel engagement activities, the intended impact extends beyond targeted companies. Our themes strive for creating positive change on company, sector, system and issue level.
Key Features and Benefits
Improve corporate ESG performance
Encourage portfolio companies to proactively tackle ESG issues to mitigate emerging and intensifying risks, as well as to create a positive impact and minimize their negative impact.
Improve corporate reputation management
Improve portfolio companies’ corporate reputations by encouraging them to prepare for regulatory trends and position themselves as responsible corporate citizens.
Leverage research as input for your own dialogue with companies
Leverage our rich database of real-time case information to improve your own engagement dialogues and to identify best practices for key ESG issues.
Demonstrate your commitment to sustainability
Use case information for storytelling and sustainability reporting to demonstrate your share ownership commitment to sustainability and creating broad impact.
Join the Following Engagements
Become part of one or more of our ongoing themes, which run for approximately three years, typically targeting around 20 companies.
Climate Change – Sustainable Forests and Finance
It is estimated that a tipping point caused by deforestation of the Amazon could be reached at a forest-cover loss of between 20 and 40 percent. This thematic engagement will address climate risk and advocate for reductions in direct and indirect emissions in the context of global forest systems.
Feeding the Future
Agriculture is estimated to account for one-quarter of the world’s greenhouse gas (GHG) emissions, 80 percent of deforestation, 70 percent of water use and 78 percent of ocean and freshwater pollution. This engagement theme aims to contribute to a more sustainable trajectory for the future of food.
Running Themes that are Open for Participation
It is anticipated that modern slavery will increasingly put companies at a competitive disadvantage through, for example, operational disruptions, compliance risks and loss of business due to damage to reputation. The engagement’s objective is to ensure high-risk portfolio companies adopt rigorous strategies on modern slavery.
Cleantech is a vital part of the response to climate change as well as other economic and societal needs. The growing supply of cleantech products also entails environmental and social challenges within the various processes across the value chain. This engagement aims to encourage and enable the cleantech industry to grow in a more responsible manner.
Child Labor in Cocoa
Over two million children below the age of 18 work in hazardous conditions in the cocoa supply chain in Côte d’Ivoire (Ivory Coast) and Ghana. This engagement is founded on investors’ expectations for some of the largest companies in the cocoa sector, and addresses the issue of child labor in cocoa.
Climate risk management is one of the overarching challenges facing members of society, including investors. Investors are striving to understand and integrate the financial impact of climate-related risks and opportunities in investment decisions.
Food Supply Chain
This engagement focuses on addressing risks related to child- and forced labor in the targeted companies’ supply chains, as well as to remediate potential adverse labor rights impacts. Particular focus is placed on the identified high-risk commodities, namely coffee, rice, sugar, tea and tomatoes.
Human Capital and the Future of Work
Technological progress, globalization and demographic shifts will bring structural changes and disruptions to society and labor markets. Companies with a robust approach to DEI and human capital management are better placed to weather the related challenges. This engagement supports investors in understanding how companies can proactively manage workforce needs and transitions for a sustainable labor market.
Governance of SDGs
This thematic engagement is aimed at encouraging companies to define meaningful SDG strategies that align with their business plans. It aims to influence them to address their negative impacts and seek out opportunities to produce positive outcomes in line with the 2030 SDG agenda, while contributing to a more stable long-term operating environment for themselves.
Localized Water Management
This engagement focuses on sustainable management of water resources, emphasizing the importance of a localized approach to risks and impacts. The engagement targets companies across selected sectors that share the same water catchment in the Tiete (Brazil) and/or Vaal (South Africa) river basins.
Plastics and the Circular Economy
Targeting the automotive, consumer goods and electronics sectors, this engagement focuses on encouraging companies to improve the quality and economics of recycling practices, to shift strategic focus towards redesign and innovation and to increase the re-usability of products.
Engaging with marine fisheries and aquaculture producers, the focus is on managing seafood sustainability risks and opportunities, which in turn contributes to long-term operational continuity and sustainability.
Focused on companies in the technology and pharmaceutical sectors, this engagement aims to create awareness among companies on tax avoidance, encourage them to approach tax as a corporate governance and risk management issue, and improve the related disclosure.
The world is changing faster than it ever has. As a result, companies are facing increasingly complex and numerous challenges. They need to adapt faster, and in this process, the board has a crucial role to play. A new vision of the board is needed to help start a process today that will result in them being better prepared for tomorrow’s challenges.
Comprehensive Thematic Engagement
Our Comprehensive Thematic Engagement program combines a set of four thematic engagements in a single package: Climate Transition, Human Capital and the Future of Work, Plastics and the Circular Economy and Tomorrow’s Board. The themes have been selected to give investors the broadest possible coverage of E, S and G topics with exposure to diverse industries and companies.
Bespoke Thematic Bundle
Investors can also choose to create their own bespoke bundles consisting of either three or more Thematic Engagements of their choosing. For example, they could create thematic bundles focused on meta themes, such as Climate Change. Bespoke bundles provide investors with additional flexibility to select the themes most closely aligned to their strategy and the interests of their clients/beneficiaries.
Sustainalytics’ user-friendly investor interface provides full insight into a company’s engagement profile, overall ratings and dialogue. It also includes engagement manager commentary on the case, next steps and upcoming meetings.Learn More
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As recognized by Environmental Finance and the Climate Bonds Initiative.
Related Insights and Resources
Banks Embrace Corporate Culture as Change Agent
Corporate culture is not automatically positive, and elements of a company’s culture may provide certain benefits or disadvantages to a firm’s competitiveness. When acknowledged, corporate culture can be used as a tool to drive better business outcomes and manage conduct and compliance risk. Our discussions with companies show that corporate culture can have a dominant effect and influence behaviour over and beyond stated company policies and programs.
2020 Material Risk Engagement Annual Report
Material Risk Engagement helps investors promote and protect their long-term value by engaging with high-risk companies on their financially material ESG issues. This inaugural Material Risk Engagement annual report covers ten months since its launch in March 2020. Read the report to learn more about:
Bringing Investors and Companies Together to Address the Climate Change Crisis
As Earth Day is around the corner on the 22nd of April, the Biden Administration is to convene a global climate summit. Following a historical precedent for several such events, since its inception in 1970, including signing the landmark Paris Agreement . We have seen positive developments since the Paris Agreement; societal actions to address some of the root causes of climate change have yet to suppress the negative trends . Historically, active ownership on climate change has focused on direct emissions from highly exposed sectors, such as fossil fuel and utility companies. However, the more complicated, less direct aspects of climate change have seen limited progress. Tackling such issues will see a strong need for collaboration from both countries and other key sectors, in particular, banking and finance. Banks are key to support this transformation; facilitating economic activity for positive change throughout the entire value chain is key.
Deforestation and Biodiversity Loss Highlight the need for a Better Normal
The world is aching for a return to normality after a year (and still counting) of news bulletins being dominated by the COVID-19 pandemic; Earth Day 2021 should serve as a stark reminder that we cannot go back to business-as-usual. We must address the vast environmental challenges facing humanity, such as climate change, loss of biodiversity, extreme weather and issues related to water.
Measure, manage and report on the social and environmental impact of your portfolio.Learn More
Material Risk Engagement
Engage on the most material ESG risks identified by the ESG Risk Ratings.Learn More