Sustainable Investing Glossary
Enhanced engagement is used to address concerns with companies regarding conduct that does not adhere to global norms. It typically involves a breach of the UN Global Compact or OECD guidelines on an environmental, social or governance (ESG) issue. Some recent cases of enhanced engagement have involved companies that are heavily polluting the environment, are embroiled in socially unacceptable issues such as the use of child labor, or are involved in corporate governance scandals like bribery or corruption.
An enhanced engagement program usually takes place over three years in which the company must meet certain pre-arranged targets for improvement. This could be steps taken to remove pollutive practices, the eradication of labor abuse in supply chains, or resolving exposure to corruption. Failure to do so will lead to the company being put on Robeco’s exclusion list. Exclusion is however used as a last resort, as in many cases companies under enhanced engagement successfully resolve the issue.