State Street Global Advisors Publishes 2020 Proxy Season Review, Showcasing Recent Asset Stewardship Activity
Also Unveils Inaugural Annual Climate Report
“Stewardship is integral to our investment approach because we see it as an essential aspect of fulfilling our fiduciary duty,” said
Guidance and Engagement on COVID-19
In light of the extraordinary circumstances induced by COVID-19, in a March letter, State Street Global Advisors shared perspectives on its 2020 asset stewardship agenda, offering assurance that as a long-term shareholder, the firm stood ready to help companies navigate these challenging times. The stewardship team has engaged with 150 companies globally specifically on COVID-19 and its impact on businesses and stakeholders. The pandemic has brought social issues to the top of companies’ agendas, and in response, the stewardship team’s engagement focus has shifted to more immediate environmental, social and governance (ESG) issues, and particularly the areas of: human capital; employee health and safety; and diversity and inclusion.
“As long-term shareholders, we are committed to standing behind our investee companies,” said
Engagement and Voting on R-Factor™ Scores
In January, ahead of the 2020 proxy season, State Street Global Advisors sent a letter to boards detailing that it would begin incorporating R-Factor™into its engagement and voting priorities. R-Factor, launched by State Street Global Advisors in 2019, is a scoring system that measures the performance of a company’s business operations and governance as it relates to financially material and sector-specific ESG issues. R-Factor leverages widely accepted, transparent materiality frameworks from the
During the 2020 proxy season, 14 companies who were laggards in terms of their R-Factor scores held shareholder meetings. The stewardship team requested engagement with all identified laggards. The stewardship team subsequently voted against directors at nine of the 14 meetings (64%) where companies’ responsiveness to our engagement efforts could be improved. Of these nine companies, five were in
“We will continue to hold board directors accountable for their ESG practices and related disclosure,” said
Update and Expansion to Fearless Girl Campaign
Since the launch of the Fearless Girl campaign, on International Women’s Day in 2017, 789 publicly-traded companies identified by State Street Global Advisors who previously had no women on their boards, have responded to the call by adding a female board director. This represents an addition of over 100 companies since the
“We are proud of the impact the Fearless Girl campaign has had in improving the gender diversity conversation across the globe,” added Walker. “There is so much more that needs to be done across the many dimensions of diversity, and we are committed to this mission. We recently wrote to board chairs outlining that State Street Global Advisors will be asking companies in our investment portfolio to articulate their risks, goals and strategy as related to racial and ethnic diversity, and to make relevant disclosures available to shareholders.”
Inaugural Climate Report Published
The stewardship team’s inaugural Climate Report details that since 2014, the team has engaged with more than 600 companies across multiple industries on climate-related issues. The number of climate-related shareholder proposals submitted nearly doubled during the 2020 proxy season. State Street Global Advisors supported 34% of the 53 proposals in the first half of the year, and supported 61% of shareholder proposals requesting companies to report on the financial and physical risks of climate change on their business as well as their plans to reduce greenhouse gas (GHG) emissions.
“Climate change presents a systemic threat creating material risks that companies must address and manage, and the topic will continue to be a core theme of our program until we are confident that companies are effectively addressing the issue,” added Colton. “We believe incorporating climate change risk into companies’ strategic planning is critical to long-term value and we take a case-by-case approach to voting on climate-related shareholder proposals. This has resulted in the support of around 35% of such proposals through the first half of the year compared to 14% during the same timeframe in 2019. Engagement is also a key pillar of our program, and a powerful tool for how we work with companies to drive change.”
About State Street Global Advisors
For four decades, State Street Global Advisors has served the world’s governments, institutions and financial advisors. With a rigorous, risk-aware approach built on research, analysis and market-tested experience, we build from a breadth of active and index strategies to create cost-effective solutions. As stewards, we help portfolio companies see that what is fair for people and sustainable for the planet can deliver long-term performance. And, as pioneers in index, ETF, and ESG investing, we are always inventing new ways to invest. As a result, we have become the world’s third-largest asset manager with US
*This figure is presented as of
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