ISS Sustainability Solutions’ Quarterly Engagement Update – Q3 2025: Strong Participation Quality among Engaged Companies

Preamble

ISS Sustainability Solutions’ Quarterly Engagement Update series highlights key trends that emerge through activities conducted on behalf of participating investors under ISS Sustainability Solutions’ Collaborative Engagement ServicesCollaborative 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 Sustainability Solutions’ 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 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.

ISS Sustainability Solutions’ Collaborative Engagement Services consist of two elements:

• The Norm-Based Engagement SolutionNorm-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 SolutionThematic 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 Q3 2025, ISS Sustainability Solutions facilitated engagement on behalf of signatory investors with a total of 118 companies across 140 topics. ISS Sustainability Solutions conducted engagements with 49 companies under Norm-Based Engagement, the Thematic Engagement solution facilitated engagement with 71 companies, and two companies were engaged with both solutions.

Table 1: Collaborative Engagement Activity, Q3 2025

Companies engaged with	Topics engaged on
118	140

Source: ISS Sustainability Solutions

Figure 1 shows the distribution of engagement activities for Q3 2025. The engagement intensity was very high during the quarter, particularly for written responses, with 120 written responses received and 8 engagement meetings conducted on behalf of investors.

Figure 1: Distribution of Engagement Activities, Q3 2025

Quality of Company Participation in Engagement

The Q3 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 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) (32%); Asia-Pacific (APAC) (28%); and Latin America (2%).

Figure 3: Regional Distribution

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

Figure 4: Geographic Distribution

Patterns of Engagement by Topic

Across the 140 topics that ISS Sustainability Solutions facilitated engagement on during Q3 2025, Environment topics (49%) and Social topics (47%) were well balanced, while 4% 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 Sustainability Solutions in Q3 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 and biodiversity.

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 right to life, consumer rights, and human rights due diligence.

Figure 6: Sustainability Topics Breakdown

The topics that ISS Sustainability Solutions facilitated collaborative engagement on in Q3 2025 covered 13 of the UN Sustainable Development Goals (SDGs). The most frequently addressed SDGs were SDG 6: Clean Water and Sanitation, followed by SDG 15: Life on Land, SDG 5: Gender Equality, and SDG 13: Climate Action.

Figure 7: SDG Breakdown

Case Study

The anonymized case study below provides a concise example of engagement on a social topic related to Union Rights Norms that took place during the quarter, highlighting actionable insights and outcomes.

Table 2: Case Study

THEME: Union Rights

INDUSTRY: Commercial Services & Supplies REGION: EMEA

SUMMARY

In communication with ISS Sustainability Solutions’ Sustainability Engagement team on September 3 and October 13, 2025, related to its alleged failure to respect union rights in Turkey, the company stated that it recognizes the right of all employees to organize, join a trade union of their choice, and to engage in collective bargaining in accordance with Turkish law, its Code and Conduct, and CEO instructions. It further stated that, as no relevant authorized union exists in Turkey, it is not currently in contact with any local union about the union rights issue. The company noted that it has multiple channels through which employees can raise concerns related to labor rights; that it regularly consults with unions; has union representatives on its Board of Directors; and convenes a European Works Council annually to promote dialogue between trade unions and management. It highlighted that a new human rights training program, developed in collaboration with UNI Global Union and the Swedish Transport Workers Union, is being prepared for the company’s top managers, including subsidiaries and Human Resources functions, to specifically address union rights. ISS Sustainability Solutions concluded that the company demonstrated excellent quality of participation and had initiated measures to address the controversy.

Source: ISS Sustainability Solutions

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 publication on June 3, 2025, of the UK Stewardship Code 2026UK Stewardship Code 2026.

ISS Sustainability Solutions’ Collaborative Engagement ServicesCollaborative Engagement Services, including Norm-Based EngagementNorm-Based Engagement and the Thematic Engagement SolutionThematic Engagement Solution, are available to support investors in this important area of their stewardship practice. In September 2025, ISS STOXX completed its Suite of Stewardship Engagement Solutions with the launch of its Engagement Disclosure SolutionEngagement Disclosure Solution, which creates a fully branded, digital disclosure page for investors’ engagement reporting. The tool supports self-managed and collaborative engagement data, Norm-Based and Thematic Engagement data, and third-party engagement data.

Explore ISS STOXX solutions mentioned in this report

• Develop engagementengagement strategies, define achievable engagement objectives, and manage your engagement process with the Norm-Based Engagement SolutionNorm-Based Engagement Solution and the Thematic Engagement SolutionThematic Engagement Solution. 
• Discover the ISS STOXX Suite of Stewardship Engagement SolutionsSuite of Stewardship Engagement Solutions