Corporate Controversies that Defined 2021
ISS ESG is the acronym (or brand) for Institutional Shareholder Services and its ESG (Environmental, Social and Governance) arm. ISS a large international company that provides services to institutional investors (fund managers) including proxy voting services and platforms (so that they can place their vote on company issues at annual meetings) as well as extensive research.
We are fortunate to be able to receive their white papers and commentaries (as a result of Carey's role judging the RIAA ESG Non Broker research in 2021), and the information covered is very informative and interesting.
The December 17,2021 report which monitors news to look for allegations of corporate involvement in failures to respect international norms and standards. The data is near-real time and is collected from tens of thousands of traditional media, social media and stakeholder publications through a combination of AI and manually set filters and then processed by a team of dedicated ESG news analysts.
These are the key takeaways from the analysis:
Social issues dominated the 2021 news cycle when it came to corporate failures to manage Environmental, Social and Governance (ESG) risks.
Big Tech generated the most ESG news coverage, with Google LLC’s parent Alphabet Inc. at the top of the list.
Companies with commercial ties to the Myanmar military and the entities it controls faced increased scrutiny by NGOs and media following the February 2021 coup. Companies have begun taking measures to limit their risk of being involved in human rights abuses, although considerably more work is required.
The pressure on more than 100 global brands with alleged supply chain links to forced labour of ethnic minorities in the Xinjiang Uyghur Autonomous Region in China continues to grow.
In addition to its devastating impact on public health, the COVID-19 pandemic had a particularly adverse impact on supply chains in 2021, highlighting issues such as underpaid wages and denial of benefits and severance pay, as millions of workers were dismissed or furloughed due to the pandemic.
The top keyword in 2021 was 'Working Conditions', encompassing healthy and safe working conditions, underpayment of wages, benefits and severance pay for workers dismissed or furloughed as a result of the pandemic.
Other keywords were 'Consumer health', Business to consumer conduct', Anti-competitive behaviour (including Bribery) and Environmental impacts.
The main industries mentioned in a concerned manner are Materials (Fundamental human rights, Pollution, anti-competitive behaviour and bribery), followed by Energy (Fundamental Human Rights, Forced/Poor labour standards, Pollution, Climate Change impact and Bribery) and Banks (Fundamental Human Rights and Pollution, as well as Money Laundering)
This kind of information is vital to our ability to offer our clients ethical investing options that are transparent, and to allow us to follow how ethical investing perceptions and priorities are changing.