Low Carbon Transition Rating
Controversial Product Involvement Research
Frequently Asked Questions
Sustainalytics’ Controversial Product Involvement (PI) Research identifies company involvement in particular products and services that some investors wish to exclude from their investment portfolios.
Examples of such investors include faith-based institutions, government pension funds, and norms-driven mutual funds.
As of September 2022, the Controversial PI Research product covers 27 involvement areas – from energy and environment to defense and health & life – with over 60 different product categories.
Defense & Military
Genetically Modified Plants & Seeds
Fur & Specialty Leather
Arctic Oil & Gas Exploration
Oil & Gas
Human Embryonic Stem Cell & Fetal Tissue
We determine involvement based on the following criteria:
- A company produces a certain product or key component of a product or is involved in a particular practice in creating a product.
- A company has minority ownership in a company that produces a certain product or key component of a product, or is involved in a particular practice in creating a product.
Level of Involvement – Revenue
- The level of involvement is determined by the revenue generated from the identified product and/or service.
- Revenue is documented either as an actual or estimated amount, with source.
- Revenue range listed:
Level of Involvement – Ownership
- Ownership involvement identifies companies that own between 10% and 50% of a company that is involved in a PI area.
- Sustainalytics considers a company to be directly involved if it owns more than 50% of a company involved in a PI product area.
Involvement categories where Sustainalytics does not consider revenue
We do not track revenue for the following six PI categories:
- Animal Testing
- Controversial Weapons
- Human Embryonic Stem Cell and Fetal Tissue
- Riot Control
Involvement categories that include production capacity
We include production capacity for the following PI categories:
- Thermal Coal – Power Generation
- Nuclear Power – Production
- Oil & Gas – Generation
- Oil Sands
New Company Research
Sustainalytics continually monitors the equity and fixed-income investment universe for companies that meet the PI criteria. Potential involvement is reviewed by examining publicly available corporate documents – Annual Reports and other documents typically available on the company website.
Updates of Existing PI Companies
- The PI Research team updates the relevant PI data annually.
- In addition, corporate actions are monitored and processed in a timely fashion. Updates are typically prepared by the middle of the month and then posted during the last week of the month.
Quality Review Process
- All research is reviewed by senior analysts.
- Changes in type or level of involvement are reviewed by Sustainalytics’ Product Involvement Committee.
Company Supplied Updates
- Companies provide Sustainalytics with updates either during the annual update process or when there are additional developments at other times of the year.
- Updates are typically prepared by the middle of the month and then posted during the last week of the month.
Submitting Comments and Updates
There are two basic time periods for companies to provide updates regarding the data collected by the PI Research team:
- After the annual update.
- Any other time when new relevant information is available. For example, a significant corporate action such as a major acquisition.
- Log into Sustainalytics’ portal for companies: the Issuer Gateway
- Go to the My Company tab
- Select Product Involvement
- Select Type of Involvement and review data
- Select Comment and add update to field.
- Save and then go to the Communications Log to submit.
PI Research Sources
The PI Research team typically reviews publicly available resources, including corporate annual reports and information on company websites.
PI research covers the global equity and fixed-income securities markets.
Access to PI Research
PI research is available on Sustainalytics’ Issuer Gateway portal.
Access the Issuer Gateway here. Or go to Sustainalytics’ website and select sign in from the upper right corner.
PI research is available via the following delivery channels:
- Morningstar Sustainalytics Data Services: The product is available via a data feed.
- Global Access: Sustainalytics’ online platform for institutional investors.
- Third-party data providers: Yahoo Finance; FactSet; Bloomberg.
PI Research Team
Sustainalytics has a dedicated research team that specializes in analyzing companies’ products and services. As of September 2022, the team consists of 23 analysts divided into four research clusters, each led by a Cluster Lead. Cluster Leads are managed by a Research Manager, who oversees all research processes related to the product.
All additional questions can be sent to [email protected]