ISS provides comprehensive governance offerings and deep expertise in environmental and social research and analysis to deliver a fully integrated global solution for responsible investing. ISS' ESG solutions enable investors to develop and integrate responsible investing policies and practices into their strategy, and execute upon these policies including through end-to-end voting. Solutions include:
- Responsible Investment Policy Development
- ISS Research and Screening Services including: Norm-Based Research; Controversial Weapons Screening; Ethical Screens; Energy & Extractives Screens; Global Sanctions Screening; Pooled Engagement
- Climate Data, Analytics and Advisory
- Environment & Social QualityScore
- Custom Screening and Ratings
ISS offers expertise across a full range of ESG issues, having worked with leading asset owners and asset managers to design tailored solutions to integrate responsible investment into the creation of long-term value based on market understanding and expert analysis.
Institutional investors looking to vote in shareholder meetings globally can choose from ISS’ U.S. and international benchmark policies, or specialty voting or specialty voting ISS guidelines that evaluate ESG topics from an assortment of investor viewpoints. ISS' range of specialty proxy voting guidelines evaluate issues from the perspective of socially-responsible investors, public funds, labor unions, mission and faith-based investors, as well as sustainability issues outlined by the PRI signatories seeking to incorporate ESG considerations into their proxy voting practices. ISS also manages full custom voting policies and implements voting recommendations for clients who wish to vote their proxies according to their own specific ESG oriented guidelines and philosophies.
ISS' Benchmark Proxy Voting Policies
ISS' Benchmark voting policies incorporate a rigorous analysis of governance and of other ESG topics that shareholders vote on. Environmental and social topics surface most frequently as shareholder resolutions, which are predominantly filed by investors predominantly at U.S., Japanese and Canadian firms. ISS' research and analysis on all ESG shareholder proposal topics include a contextual and insightful background of the subject, including environmental issues such as climate change, greenhouse gas emissions, renewable energy, hydraulic fracturing, coal combustion waste, and social topics such as workplace safety, anti-discrimination practices, and human and labour rights, to name a few. ISS' benchmark research reports will include relevant in-depth analysis, for example of how company practices compare to peers, assessments regarding common practices and disclosures, and extensive case-by-case evaluations of whether company disclosures, policies, and practices sufficiently address the ESG concerns highlighted by shareholder proponents in the resolutions submitted.
ISS' SRI Proxy Voting Policy
ISS has extensive experience and expertise on SRI related topics and over the past 16 years has developed SRI-themed proxy voting policies that cater to the unique viewpoints of many socially responsible investors. The SRI policy has been developed in collaboration with SRI market participants and ISS' SRI clients, and is also informed by the active ownership and investment philosophies of globally recognised initiatives such as the United Nations Environment Programme Finance Initiative, the PRI, the UN Global Compact, and environmental and social European Union Directives, among others.
The SRI policy incorporates a detailed analysis of ESG topics using ISS governance research and ISS-Ethix's Norm-Based Screening and controversies research, which is designed to proactively identify material ESG risks and controversies. This approach to voting recommendations includes employing the use of ESG risk indicators to identify moderate to severe ESG risk factors at over 20,000 companies and other business entities globally. The ESG risk indicators cover several topics, including: environmental stewardship, human rights and the impacts of business activities on local communities, labour rights and supply chain risks, consumer product safety, bribery and corruption, as well as governance and risk oversight failures. Under this ESG Risk Evaluation Framework, ISS may recommend votes against board members up for election for failure to sufficiently oversee, manage, or guard against material ESG risks.
ISS' Sustainability Proxy Voting Policy
ISS' Sustainability voting policy represents an approach to proxy voting that aligns with the perspectives of many mainstream investors, who wish to incorporate ESG considerations in their investment decision-making processes to a greater extent, including signatories to the PRI. The ISS Sustainability guidelines focus on economic value preservation and enhancement through promotion of corporate governance best practices that mitigate risks to shareowners, but also reflect the recognition that ESG factors could present material risks to portfolio investments. The Sustainability policy was specifically formulated to meet the growing need of many institutional investors to increasingly account for ESG elements in their voting practices, including signatories to the PRI looking to fulfil their obligations to the UNPRI from a proxy voting perspective. ISS liaised with the PRI Secretariat to help inform the development of the Sustainability voting guidelines.