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.
Biodiversity & Natural Capital Impact Program
An outcomes-based engagement to help investors drive positive impact
The objective of our Biodiversity and Natural Capital Program is to partner with global investors to address the complexity and interlinkages of biodiversity loss and climate change, to assess double-materiality, protect and promote long-term value, and capitalize on opportunities and generate systemic impact. Biodiversity loss has emerged as a material and systemic risk that rivals the impact of climate, featuring among the top risks facing investors over the next 10 years. It is estimated that more than half of the world’s GDP (equal to $44 trillion USD) is moderately or highly dependent on contributions from nature.
Running Themes that are Open for Participation
Human Rights Accelerator
This thematic engagement aims to improve the adoption of globally agreed corporate standards for managing and promoting human rights, as defined by the UN Guiding Principles on Business and Human Rights (UNGPs) and mirrored in the OECD Guidelines for Multinational Enterprises. Specific areas of focus will be encouraging companies to commit to respect human rights, incorporate relevant due diligence processes and establish operational-level grievance mechanisms.
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.
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.
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.
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.
The Next Normal:
Join our “Next Normal Bundle” which combines three future-focused thematic engagements to help clients address the mega-trend. ESG risks and opportunities of tomorrow: Feeding the Future, Human Capital and the Future of Work, Responsible Cleantech. This bundle is designed to provide investors with the opportunity to engage with their companies on three increasingly salient and systemic issues. It provides investors with a holistic engagement approach designed to effect broad-based change.
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.
Basic data points can be delivered as a standard portfolio report in Excel or as a data feed.
A Single Market Standard
Consistent approach to ESG assessments across the investment spectrum.
Award-Winning Research and Data
Firm recognized as Best ESG Research and Data Provider by Environmental Finance and Investment Week.
End-to-End ESG Solutions
ESG products and services that serve the entire investment value chain.
30 Years of ESG Expertise
800+ ESG research analysts across our global offices.
A Leading SPO Provider
As recognized by Environmental Finance and the Climate Bonds Initiative.
Related Insights and Resources
Investors Seek Meaningful Scope 3 Emissions Targets to Evaluate Climate Transition Plans
Climate concerns continued to dominate proxy voting in the 2022 proxy season. With more clarity on sectoral commitments required to achieve the global net zero goal, shareholders’ requests have become noticeably more specific. A larger number of resolutions asked companies to adopt and report on emissions reduction targets and transition plans that reference the latest forward-looking guidance.
Danish Delegation Engages Sustainalytics’ Biodiversity Expert, Enabling Front Row Access to COP15 Negotiations
Finance Day within the U.N. Biodiversity Conference (COP15) is fast approaching, and Morningstar Sustainalytics’ team members will be in attendance, each focusing on different investor biodiversity considerations related to active ownership.
UK Stewardship Code 2020 - Stewardship Report
Morningstar Sustainalytics has maintained its status as a signatory of the UK Stewardship Code 2020 (the Code) per the Financial Reporting Council (FRC). Download the report to review how Sustainalytics' commitment to high stewardship standards meets the service provider principles set under the Financial Reporting Council’s revised Code.
Climate Change, Innovation, and Cybersecurity in the Defense Industry: New Opportunities for ESG Investors
While perhaps not a widely considered link between the defense industry and climate change, several Eurosatory conference sessions addressed how climate change can intensify security risks and threats.
Measure, manage and report on the social and environmental impact of your portfolio.
Material Risk Engagement
Engage on the most material ESG risks identified by the ESG Risk Ratings.
Global Standards Engagement
Engage with companies that breach international norms and standards as identified by our Global Standards Screening research.