ISS ESG InFocus: Household & Consumables

Each month ISS ESG’s team of specialist analysts releases an update on the ESG risks associated with a specific industry sector. The InFocus reports focus on the ISS ESG Corporate Rating for companies within each sector, and also provides headline results from other ISS ESG product lines. This month, the InFocus is on: Household & Consumables

KEY TAKEAWAYS

ESG RATINGS RESULTS

Household and Consumables demonstrates relatively poor ESG performance and only limited positive contributions to the achievement of the UN Sustainable Development Goals (SDGs).

• The Household and Consumables industry grouping comprises companies mainly involved in the supply chain and production of fast-moving consumer goods from the Food Products (FP), Beverages (BE), Household and Personal Products (HO&PE), and Tobacco (TO) industries.
• The industries are linked by the high importance of customer and product responsibility and the potential effects their products can have on human health.
• In addition, the Food Products industry in particular has a significant impact on the climate and is at the same time heavily affected by climate change impacts. There is an urgent need to reduce emissions, especially in the agricultural supply chain, in accordance with the Paris Agreement.
• More than half of Household and Consumables companies are considered to obstruct the achievement of the Sustainable Development Goals (SDGs) by offering products that are potentially harmful to human health and/or the environment, and only around one fifth have a positive impact on their achievement, mainly in the social domain.
• The most common controversies are violations of labor rights, especially regarding child and forced labor, followed by environmental controversies related to deforestation.
• In general, the Household & Personal Products industry performs better and is less controversial than the other industries in the sector. This is also reflected in the share of companies that are ISS ESG Prime-rated: more than one fifth of companies in the HO&PE industry are rated Prime, which is considerably higher than the share of overall Household and Consumables companies that are Prime (8.6%), and also better than the percentage of Prime companies in the broader universe (15%).

Explore ISS ESG solutions mentioned in this report:

• Identify ESG risks and seize investment opportunities with the ISS ESG Corporate Rating.
• Use ISS ESG Climate Solutions to help you gain a better understanding of your exposure to climate-related risks and use the insights to safeguard your investment portfolios.
• Assess companies’ adherence to international norms on human rights, labor standards, environmental protection and anti-corruption using ISS ESG Norm-Based Research.
• Understand the impacts of your investments and how they support the UN Sustainable Development Goals with the ISS ESG SDG Solutions Assessment and SDG Impact Rating.
• Understand the F in ESGF using the ISS EVA solution.
• Use ISS ESG Sector-Based Screening to assess companies’ involvement in a wide range of products and services such as alcohol, animal welfare, cannabis, for-profit correctional facilities, gambling, pornography, tobacco and more.