Preamble
ISS STOXX Sustainability’s Quarterly Engagement Update series highlights key trends that emerge through activities conducted on behalf of participating investors under ISS STOXX Sustainability’s Collaborative Engagement Services. These services allow investors to participate in cost-effective joint outreach and dialogue with companies on material sustainability-related themes.
The services also support global investor compliance and reporting requirements with regard to voluntary and statutory stewardship frameworks, including the Principles for Responsible Investment (PRI), the EU Sustainable Finance Disclosure Regulation (SFDR), the EU Shareholder Rights Directive II (SRD II), and stewardship codes across the globe.
The Collaborative Engagement Services leverage ISS STOXX Sustainability’s expertise, research, and data to identify key performance indicators for corporate improvement and momentum that are aligned with recognized standards such as the United Nations Sustainable Development Goals (SDGs).
Through collaborative engagement, institutional investors can strengthen their focus on sustainability issues and effectively convey their concerns to investee company management. ISS STOXX Sustainability supports this process by facilitating engagement on behalf of participating clients, driving change through active ownership and constructive dialogue. Key areas of focus include enhancing disclosure, encouraging improved sustainability performance, and mitigating sustainability risks. Across the full 2025 calendar year, the ISS STOXX Sustainability Engagement team observed progress on 562 engagement objectives.
ISS STOXX Sustainability’s Collaborative Engagement Services consist of two elements:
- The Norm-Based Engagement Solution (formerly known as ‘Pooled Engagement’) is based on outreach to a select universe of upwards of 100 public companies annually. Companies are identified based on their involvement in alleged violations of human rights and labor rights and breaches of environment- and corruption-related recognized international standards, including the OECD Guidelines for Multinational Enterprises, the UN Global Compact, and the UN Guiding Principles on Business and Human Rights.
- The Thematic Engagement Solution – launched in 2022 – prioritizes outreach to a select universe of 30-50 public companies per theme over a two-year or three-year engagement cycle. It focuses on companies identified as underperforming in the areas of Net Zero, Gender Equality, Water, and Biodiversity.
Collaborative Engagement Activity
In Q4 2025, ISS STOXX Sustainability facilitated engagement on behalf of signatory investors with a total of 121 companies across 145 topics. ISS STOXX Sustainability conducted engagements with 44 companies under Norm-Based Engagement, the Thematic Engagement solution facilitated engagement with 80 companies, and three companies were engaged with both solutions.
Table 1: Collaborative Engagement Activity, Q4 2025
| Companies engaged with | Topics engaged on |
| 121 | 145 |
Figure 1 shows the distribution of engagement activities for Q4 2025. The engagement intensity was very high during the quarter, particularly for written responses, with 115 written responses received and 10 engagement meetings conducted on behalf of investors.
Figure 1: Distribution of Engagement Activities, Q4 2025
Quality of Company Participation in Engagement
The Q4 2025 Engagement Assessment considers the extent to and depth in which a company has addressed the questions posed. A company’s quality of participation was assessed as adequate, good, or excellent for 58% of the companies engaged during the quarter, while 34% either did not respond or deferred their response.
Figure 2: Quality of Company Participation in Engagement
Patterns of Engagement by Region
The companies engaged with are spread out globally, with domiciles in North America (39%); Europe, the Middle East, and Africa (EMEA) (30%); Asia-Pacific (APAC) (27%); and Latin America (4%).
Figure 3: Regional Distribution
The most engaged countries were the United States in North America; Japan and China in APAC; and Switzerland, the United Kingdom, and Sweden in EMEA.
Figure 4: Geographic Distribution
Source: ISS STOXX Sustainability
Patterns of Engagement by Topic
Across the 145 topics that ISS STOXX Sustainability facilitated engagement on during Q4 2025, Environment topics (52%) and Social topics (43%) were well balanced, while 4% of the topics concerned the Governance pillar.
Figure 5: Sustainability Areas Breakdown
Source: ISS STOXX Sustainability
A detailed analysis of the sustainability topics breakdown reveals that, among the Environment-related engagements facilitated by ISS STOXX Sustainability in Q4 2025, the most frequently discussed topics were Net Zero, violation of Environment Norms, and Water. Within the area of Environment Norms, the most common sub-topics focused on controversies related to pollution, water pollution, and environmental impacts.
Among Social topics, most of the engagements focused on violation of Human Rights Norms, followed closely by Gender Equality. In the area of Human Rights Norms, the most common sub-topics included controversies related to the lack of stakeholder consultation, indigenous rights, and access to water/sanitation.
Figure 6: Sustainability Topics Breakdown
The topics that ISS STOXX Sustainability Solutions facilitated collaborative engagement on in Q4 2025 covered 14 of the UN Sustainable Development Goals (SDGs). The most frequently addressed SDGs were SDG 13: Climate Action, followed by SDG 6: Clean Water and Sanitation and SDG 15: Life on Land.
Figure 7: SDG Breakdown
Case Study
The anonymized case study below provides a concise example of engagement on a social topic related to Net Zero that took place during the quarter, highlighting actionable insights and outcomes.
Table 2: Case Study
| INDUSTRY: Multi Utilities REGION: EMEA | TOPIC Net Zero |
| Through meetings with ISS STOXX Sustainability’s Sustainability Engagement team in Q3 2024 and Q4 2025, the company outlined progress on its climate strategy and target‑setting approach. It reported a commitment to Net Zero by 2045 and stated that its decarbonization roadmap follows Science Based Targets initiative (SBTi) guidance but does not yet fully align with the more stringent power sector guidance. The company noted that pursuing SBTi validation for a 1.5°C pathway remains under review as part of its climate strategy. It shared that its energy production reduction target has risen to 70% from 66% in 2024, while recognizing that 78% is required for SBTi alignment. To support the transition, the company highlighted expansion plans, including 50 GW of renewable capacity by 2025 and 80 GW by 2030, alongside 10 GW of battery capacity by 2030, to enhance system flexibility. It shared that it is working to integrate green gases, such as biomethane and green hydrogen, into its energy mix between 2030 and 2045. The company also described actions to reduce emissions from Combined Cycle Gas Turbines (CCGTs), sharing that, by late 2024, most units operate only during peak demand. It shared plans to inject biomethane into CCGTs and enable hydrogen blending using hydrogen‑ready infrastructure in select markets. The company stated that it participated in the SBTi power sector consultation and considers multiple assessment frameworks. ISS STOXX Sustainability assessed the company’s quality of participation as “Excellent,” reflecting that it has replied to and substantially addressed all the questions throughout the dialogue. | |
Source: ISS STOXX Sustainability
Future Action
For over a decade, a mix of soft and hard law initiatives, coupled with growing investor demand, has driven the global expansion of active ownership practices—particularly engagement. These trends have fostered more standardized frameworks for investment stewardship, enabling investors to seek meaningful change in the companies they invest in. The most recent development in this area is the European Commission’s public consultation and call for evidence, which is open until May 6, 2026, on the evaluation and potential review of the EU Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement.
ISS STOXX Sustainability’s Collaborative Engagement Services, including Norm-Based Engagement and the Thematic Engagement Solution, are available to support investors in this important area of their stewardship practice. In 2026, the second thematic engagement cycles related to Biodiversity, Water, and Gender Equality will come to an end, and investors will be invited to participate in the launch of new engagement cycles.
By:
Shweta Shah, Sustainability Engagement Coordinator, ISS STOXX Sustainability
Sujay Pan, Sustainability Engagement Coordinator, ISS STOXX Sustainability
Loïc Dessaint, Head of Sustainability Engagement, ISS STOXX Sustainability
