Leading ESG research provider offers way for institutional investors to help improve portfolio companies’ performance
ESG research, ratings, and analytics firm Sustainalytics has launched a new Material Risk Engagement service. Available to institutional investors, it is designed to help them promote long-term value in their portfolios by engaging with companies on financially material ESG issues.
More large North American mainstream investors are engaging with companies on ESG issues, according to the Global Sustainable Investment Alliance and US Forum for Sustainable and Responsible Investment (US SIF). At the same time, sustainable investing assets have grown to record levels, reaching US$13.7 trillion on North America alone.
As investors face greater expectations to be responsible stewards and meet regulations, the need for added engagement services to support portfolio management, ESG integration, and proxy voting activities has grown clearer. That presents a challenge for institutional investors with diverse portfolio holdings.
“As an overlay to Sustainalytics' ESG Risk Ratings, our Material Risk Engagement service complements investors’ own engagement activities helping them to reduce their portfolio-ESG risks and support their long-term value creation,” said Hanna Roberts, Director of Engagement Services at Sustainalytics.
According to Sustainalytics, its Material Risk Engagement service focuses on high- or severe-risk companies within its universe, defined as those companies with an ESG Risk Ratings score exceeding 32. Supported by over 25 engagement professionals across the globe, the firm offers leading asset owners and managers the chance to boost and preserve long-term shareholder value through consistent engagement outcomes.
The firm also offers Thematic Engagement services, through which investors can proactively address specific ESG issues within their portfolio companies; and Global Standards Engagement services, which aims to help investors comply with regulations and/or industry standards by focusing on ESG issues that arise in portfolio companies.
Sustainalytics also recently launched its Sustainalytics’ ESG data product for institutional investors. Offered as a way to help clients develop ESG insights, the comprehensive dataset includes over 220 ESG management, corporate governance, and event indicators spanning a variety of themes. Its in-depth coverage is said to include 11,000 companies across 138 sub-industries.
