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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:

trees in forest

Why Deforestation Matters for Investors

EARTH DAY 2021: Why should investors care about deforestation and how can it can be taken into account within an investment portfolio?

governance in brief

Governance in Brief – April 22, 2021

Royal Dutch Shell’s May 18 AGM agenda includes an advisory vote on the company’s “Energy Transition Strategy,” which sets a goal of net-zero emissions by 2050.

trees in forest

Climate Risk Management: Investing Toward Net Zero

Watch our video to learn how applying Sustainalytics-driven carbon metrics to Morningstar indexes can facilitate a nuanced approach to portfolio decarbonization, with encouraging investment attributes.

governance in brief

Governance in Brief – April 15, 2021

Credit Suisse has announced far-reaching changes following the collapse of U.S. hedge fund Archegos Capital Management and UK supply chain finance company Greensill Capital. Archegos’ failure to meet margin commitments will cost Credit Suisse USD 4.7 billion, with the lender having liquidated USD 10 billion worth of funds managed with Greensill.

10 ESG Themes to Watch in 2019

This year’s instalment of our 10 for series – 10 for 2019: Systemic Risks Loom Large – explores 10 environmental, social and governance (ESG) themes that could affect global investment portfolios in 2019.

trees in forest

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.

sustainable forests and finance

Climate Change – Sustainable Forests and Finance | Webinar

Listen in as Sustainalytics’ Engagement Manager, Henry Pallister-Dixon, sits down with Beatrice Crona from the Royal Swedish Academy of Science and the Stockholm Resilience Center at Stockholm University to discuss:

children's rights blog

UNICEF Collaborates with Sustainalytics to Highlight Children’s Rights Issues for Investors

While child labor remains a serious problem across industries and countries, it is only one part of the overall issues pertaining to children’s rights; companies and investors should recognize the scope and relevance of this topic.

governance in brief

Governance in Brief – April 08, 2021

The shares of UK-based food delivery firm Deliveroo Holdings Plc dropped around 30% in their trading debut on the London Stock Exchange (“LSE”), on the back of investor concerns over the company’s business model and ownership structure.

governance in brief

Governance in Brief – April 01, 2021

The UK Government has launched a public consultation on proposed measures to improve the audit and governance regimes of public interest entities. The process was prompted by a spate of corporate failures such as those seen at Carillion and Thomas Cook. The proposals address audit purpose and scope, auditing market competitiveness, director accountability, and the creation of a new regulator with increased powers

Personal Products and the New Ethics of Product Naming

Over recent years, personal product (PP) companies have faced an increasing demand for more inclusive product governance – from formulations to labels – and marketing that reflects the diversity of consumers. To grow sustainably within their communities and stay relevant for their target customers, such companies need to create value for society proactively. Some of the major players in this industry have already started paving the way for others.

governance in brief

Governance in Brief – Mar 25, 2021

Starbucks shareholders revolt over executive pay Starbucks faced a rare rebuke at its 2021 AGM, where its advisory say-on-pay resolution was rejected following opposition by 53% of votes cast. The executive pay proposal included two special one-time retention awards granted in December 2019

ESG Risk and Economic Moat Development

Investing in Companies with Positive Momentum in ESG Risk and Economic Moat Development

In Sustainalytics’ paper, Combining ESG Risk and Economic Moat,[i] we examined the effect of combining the two metrics, showcasing the benefits of higher returns and lower downside risk. More specifically, investing in companies with negligible/low ESG risk and wide economic moats was advantageous for creating alpha over the past four years.

Water Security: Global Challenge, Local Solutions

Water Security: Global Challenge, Local Solutions

The growing scarcity of freshwater resources is a risk to the economic, social, and environmental well-being of populations worldwide, and a material issue for companies. Corporate-wide water strategies are essential, but because water security challenges are experienced at the local level, and water basin conditions are unique, there is no one-size-fits-all solution for companies to implement.

Rising Risks: The U.S. Gulf of Mexico blog

Deepwater Plays Against Rising Risks: The U.S. Gulf of Mexico

As onshore resources became harder to locate over the past decades, offshore exploration and production have grown into a global industrial activity. The prospect of finding hydrocarbons has led some companies to explore deeper waters in some regions.

SFDR webinar

SFDR: Raising the bar for sustainability disclosures

As part of the EU Sustainable Finance Action Plan, the Sustainable Finance Disclosure Regulation (SDFR) supplements the current rulebooks governing manufacturers of financial products.

Country Risk Ratings

Applications of Country Risk Ratings in Fixed Income Investing

How are Country Risk Ratings being utilized to identify risk and to construct a sovereign ESG fixed income index? Listen in as Manna Neghassi, Manager, Product Strategy and Development at Sustainalytics and Katie Binns, Senior Product Manager, Fixed Income Indexes at Morningstar Indexes tell us more.

governance in brief

Governance in Brief – Mar 11, 2021

A recent review commissioned by HM Treasury recommends a slew of measures aimed at boosting the attractiveness of the post-Brexit London Stock Exchange as an IPO destination. Under the recommendations, the LSE premium listing segment would allow dual class share structures with a maximum 20:1 voting rights differential for up to five years post-IPO.

governance in brief

Governance in Brief – Mar 11, 2021

A Delaware court has invalidated a poison pill that had been adopted by U.S. energy firm The Williams Companies in March 2020. While poison pills have been traditionally conceived of as takeover protections, Williams’ pill is meant to deter activist campaigns by imposing substantial dilution on any shareholder acquiring a specified stake without prior board approval.