A recent report from ISS ESG examined environmental, social and corporate governance initiatives with which companies were most engaged in the fourth quarter of 2022. Environmental topics that received the most attention related to water and biodiversity, and the leading social topics of interest were gender equality and labor rights. Meanwhile, the subject with the least amount of engagement was corruption.
For Q4 2022, ISS ESG’s quarterly engagement update sampled from a total of 195 companies across 215 topics. The report highlighted key trends of ESG investing activities of participating investors. ISS ESG, like PLANADVISER, is owned by Institutional Shareholder Services Inc.
The spotlight on ESG comes as mission-oriented investment has become increasingly politicized. On March 1, the Senate approved a House of Representatives resolution to overturn a Department of Labor rule that permits ESG investing in retirement plans. President Joe Biden has said he will veto the bill. Republicans have rejected the ESG investing rule as a problem of “woke capitalism.” However, the Q4 2022 update from ISS ESG indicates companies were still interested in sustainable investing.
Companies engaged in ESG investing were spread out across the globe, with 43% of companies in Asia, 36% in North America and 18% in Europe invested in ESG topics.
The areas that received the most attention were environmental and social topics. Environmental concerns received 51% of engagement and social concerns held 46%, while governance topics only had 3%, according to ISS ESG.
The leading area of concern companies reported was gender equality at 19%, followed by labor rights norms with 16%. Water and biodiversity both received 14% of investor engagement, with environmental norms next in line with 12%, followed by 11% of companies interested in the topics of net-zero and human rights norms. Finally, corruption only received 3% of votes.
ISS ESG facilitated collaborative engagement on 14 United Nations Sustainable Development Goals. The most common SDG was clean water and sanitation with 16%, followed by gender equality with 14%. The SDGs “decent work and economic growth,” life below water and life on land each received 12% of engagement.