Engagement on Other Issues
Engagement themes
EU PAI's Engagement
According to the EU Sustainable Finance Disclosure Regulation (SFDR), most institutional investors are obliged to report on Principal Adverse Impacts (PAIs) caused by their investments. 14 PAIs like biodiversity, waste and gender diversity are mandatory to report on.
Engagement International can support investor clients by improving some or all of the PAIs through engagement with portfolio companies First step is identifying the companies with the highest exposure to specific ESG issues and the lowest management levels in addressing these.
The goal for engaging on selected EU PAI’s is to improve the management level of the issues in alignment with investor expectations, norms, and operational milestones (see Methodology).
Impact and SDG Engagement
The 17 UN Sustainable Development Goals (SDG’s) are meant as guiding lights for the behaviour of all countries, companies, investors, and other organisations. Hence, many responsible investors aim to use all or some of the SDGs as the primary measures and KPI’s in their approaches to responsible and sustainable investing.
We believe that the approach can be challenging. It is not easy to measure e.g. a particular chemical company’s alignment with the SDG 16 about promoting peaceful and inclusive societies. However, most of the 17 SDGs and related KPIs can be used for measuring positive and negative impact. And we support investors to identify the companies in their portfolios that are strongly aligned or misaligned with all or some of the SDGs and thereby engagement potentials. The SDGs are also an important part of most other of our engagements.
The goal for engaging on selected SDGs is to improve the management level of these issues in alignment with investor expectations, norms, and operational milestones (see Methodology).
Corporate Governance Engagement
Many investors still believe that good corporate governance is the most important prerequisite for effectively managing all other ESG issues including climate, biodiversity, and waste etc. Hence, they aim to identify laggards in their portfolios when it comes to board independence, gender diversity, executive incentives, lobbying practices etc.
Engagement International can support identifying these companies and engage with them with the goal of improving their management level regarding the corporate governance issues selected by the investor client.
Norms and guidelines
Client benefits of Issue-based Engagement
Mitigate business and investment risks associated with the particular E, S, G, or UN SDG issue.
Obtain independent engagement insights and overview of company progress to inform investment decisions and exercise oversight over asset managers.
Improve portfolio companies’ E, S, G, or UN SDG management by joining other institutional investors represented in dialogues led by Engagement International
Access to the world-class ESG data provided by MSCI ESG Research, which forms the basis of our ESG due diligence process.