Controversy Watch Saint-Gobain: EU Commission launches an investigation into possible price fixing on Chryso

Research evidence excerpt

Controversy Watch Saint-Gobain: EU Commission launches an investigation into possible price fixing on Chryso

o the Statement of Objections.

However, it pointed to a statement it made in 2023 which read, “Compliance with competition

laws in all its businesses is key for Saint-Gobain’s Construction Chemicals business unit is and

has always been fully committed to competition law compliance and is cooperating with the

investigations. At this stage we see no reason to believe there will be a financial impact for Saint-

Gobain. We will not make any further comments.”

Applying the J.P. Morgan EMEA Sustainable Investing

Controversy Playbook

We view the above event as qualifying as a controversy. As a reminder, our First Principles -

Controversy Watch defines a controversy as “a negative sustainability-related news event.”

ESG Ratings & Sustainability Consensus?

• MSCI: SGO has been rated “A” by MSCI, the highest possible rating, since Dec 2022.

This rating is similar to 18% of the companies in the Building Products sector. (Universe:

MSCI ESG Ratings, Building Products, n=97)

• Sustainalytics: As per Sustainalytics, the company has an ESG risk score of 18.6,

categorized as “Low Risk” . The company ranks 9th out of 128 in the building products

industry, corresponding to the 7th percentile.

According to our research, a high ESG rating is likely to minimize the market impact of

a controversy, acting as a meaningful buffer against its adverse financial effects. Our

quantitative backtesting shows that the most adverse valuation impact is concentrated in stocks

with the lowest ESG scores, while stocks with top-tier ratings exhibit minimal sensitivity to

controversy downgrades. This is likely because companies with robust sustainability profiles are