ISS STOXX’s Quarterly Engagement Update – Q1 2026: Strong Participation Quality among Engaged Companies

Preamble

ISS STOXX’s Quarterly Engagement Update series highlights key trends that emerge through activities conducted on behalf of participating investors under ISS STOXX’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’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 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.

ISS STOXX’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 Q1 2026, ISS STOXX facilitated engagement on behalf of signatory investors with a total of 117  companies across 141 topics. ISS STOXX conducted engagements with 49 companies under Norm-Based Engagement, the Thematic Engagement solution facilitated engagement with 70  companies, and two companies were engaged with both solutions.

Table 1: Collaborative Engagement Activity, Q1 2026

Companies engaged with	Topics engaged on
117	141

Source: ISS STOXX

Figure 1 shows the distribution of engagement activities for Q1 2026. The engagement intensity was very high during the quarter, particularly for written responses, with 113 written responses received and 10 engagement meetings conducted on behalf of investors.

Figure 1: Distribution of Engagement Activities, Q1 2026

Quality of Company Participation in Engagement

The Q1 2026 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 62% of the companies engaged during the quarter, while 29% 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 (38%); Europe, the Middle East, and Africa (EMEA) (37%); Asia-Pacific (APAC) (21%); and Latin America (4%).

Figure 3: Regional Distribution

The most engaged countries included the United States in North America; Japan and India in APAC; and Switzerland, the United Kingdom, and the Netherlands in EMEA.

 Figure 4: Geographic Distribution

Patterns of Engagement by Topic

Across the 141 topics that ISS STOXX facilitated engagement on during Q1 2026, Environment topics (54%) and Social topics (40%) were well balanced, while 6% of the topics concerned the Governance pillar.

Figure 5: Sustainability Areas Breakdown

A detailed analysis of the sustainability topics breakdown reveals that, among the Environment-related engagements facilitated by ISS STOXX in Q1 2026, the most frequently discussed topics were violation of Environment Norms, Water, and Biodiversity. Within the area of Environment Norms, the most common sub-topics focus on controversies related to pollution, water pollution, and enviornmental impacts. Among Social topics, most of the engagements focused on violations 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 living standards.

Figure 6: Sustainability Topics Breakdown

The topics that ISS STOXX facilitated collaborative engagement on in Q1 2026 covered 14 of the UN Sustainable Development Goals (SDGs). The most frequently addressed SDGs were SDG 15: Life on Land, followed by SDG 6: Clean Water and Sanitation and SDG 16: Peace, Justice and Strong Institutions.

Figure 7: Most Frequently Addressed SDGs

Case Study

The anonymised case study below provides a concise example of engagement on a social topic related to Human Rights that took place during the quarter. The case study highlights actionable insights and outcomes.

Table 2: Case Study

INDUSTRY: Precious Metals  REGION: North America

TOPIC: Human Rights

In the course of an engagement meeting conducted by ISS STOXX, through its Sustainability Engagement team and on behalf of participating investors, regarding an alleged failure to respect indigenous rights in Guatemala, the company stated in Q1 2026 that the consultation process under ILO Convention 169 is led by Guatemala’s Ministry of Energy and Mines. It noted that the government had met with the relevant indigenous representatives and subsequently asked the company to submit an updated proposal addressing concerns related to water, blasting, cultural heritage, and participation mechanisms. The company added that the consultation process remains ongoing, with no defined timeline, and that further updates from the authorities are expected. The company further stated that mitigation and monitoring programmes are in place at the site, including water monitoring overseen by public authorities. It also highlighted changes to its security approach following the acquisition of the project, including demilitarisation, prohibition of firearms, and alignment with the Voluntary Principles on Security and Human Rights. In addition, the company noted the existence of grievance and listening channels, as well as ongoing collaboration with an international organisation to support dialogue structures. ISS STOXX concluded that the company demonstrated excellent quality of participation and had made positive progress against the engagement goals. ISS STOXX continues to monitor the effectiveness of the company’s remediation measures.

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.

ISS STOXX’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 Q3 and Q4 2026, investors will be invited to join new collaborative engagement cycles focusing on alleged or verified breaches of international norms and frameworks, and on the themes of water, biodiversity, and gender equality.