37
Sector analysis of the most controversial companies in the portfolio Number and severity of corporate controversies on warning list-consolidated
0
5
10
15
20
25
30
Critical High
Fi na
nc ia
ls
E ne
rg y
In du
st ri
al s
C on
su m
er D
is cr
et io
na ry
H ea
lt h
C ar
e
M at
er ia
ls
C on
su m
er S
ta pl
es
U ti
lit ie
s
C om
m un
ic at
io ns
7
21
28
6
8
14
5
6
11
3
7
10
3
5
8
2
6
8
1 2
3
2
2
1 1
Though they account for just 3.4% of companies in the consolidated portfolio, the 85 most con- troversial companies in the FRR s portfolio are responsible for 28.5% of controversies. All sec- tors combined, 47% of identified controversies related to Market Behaviour4 and 16% to Corpo- rate Governance. All fields combined, Chevron is the most controversial company with a total of 56 controversies, including 26 regarding the environment alone (10% of controversies identi- fied for this). The FRR gives special considera- tion to this company in its investment strategy. It entered into direct correspondence with the company in 2015, and is continuing its dialogue
4 This area includes product security, responsible disclosure to clients, responsible orientation of contracts, lasting cooperation with suppliers, consideration of environmental and social factors in the supply chain, anti-corruption measures, anti-trust measures, and the transparency and integrity of influence practices and strategies.
through collaborative initiatives stemming from the PRI platform as well as through its invest- ment managers.
83 of the 85 most controversial companies were the subject of at least one controversy regarding Market Behaviour, 65 for Corporate Governance, 63 for the Environment, 61 for Societal Commit- ment5, 60 for Human Rights and 47 for Human Resources.
5 This includes commitments to the economic and social development of the country in which a company is located, consideration of the societal impact of the products and services developed by the company, and the contribution to public interest causes.
Financial companies account for the most con- troversies within the FRR s investment universe. They are followed by the Oil & Gas sector and then Industry. Financial companies were not subject to so many controversies in the past.
Their predominance in the 2016 analysis results from both the new service provider s analysis method, and the increase in controversies within this sector over the past few years.