Social Issues, Climate Change Lead State Street Global Advisors’ Asset Stewardship Agenda
September 05 2019 - 8:00AM
Business Wire
Asset Manager’s Fearless Girl Campaign Continues to Drive Change
Among Corporate Boards
State Street Global Advisors, the asset management business of
State Street Corporation (NYSE: STT), today announced the release
of its Annual Stewardship Report (link), showcasing the results of
its annual stewardship activities, highlighting year-to-date
progress, and identifying key focus areas into 2020.
“Stewardship is integral to our investment approach because we
regard it is an essential aspect of fulfilling our fiduciary duty.
We are committed to practicing proactive responsible stewardship
across our entire asset base,” said Rick Lacaille, Global Chief
Investment Officer at State Street Global Advisors. “While
environmental, social and governance considerations have always had
a place in our firms’ approach, over the past year we have
prioritized a deeper examination of how we can improve our
integration across all investment strategies - a reflection of our
view that these issues will only become more important as drivers
of return and risk.”
Continued Lacaille: “In 2018, we observed that social issues
such as gender diversity and human capital management moved to the
fore of the ESG conversation and were increasingly recognized by
other investors as important long term value drivers. In 2020 our
stewardship team will continue to explore how our portfolio
companies carefully navigate these issues to deliver better long
term value.”
The State Street annual report provides a comprehensive look at
the asset stewardship team’s engagement efforts, including the
impact of core multi-year campaigns focused on gender diversity and
climate change, its increased focus on key social issues, and a
briefing on how the asset manager is integrating ESG and State
Street’s ESG scoring system, “Responsibility- Factor” (R-Factor™),
across stewardship efforts.
“Our stewardship program is designed to have an impact,” said
Rakhi Kumar, Head of ESG Investments and Asset Stewardship at State
Street Global Advisors. “I am especially pleased to announce that
as of June 30, 2019, 43 percent or more than 580 of the 1,350
companies identified as part of our Fearless Girl campaign
responded to our call by either adding a female director or
committing to do so. On climate change, we have conducted more than
365 engagements since we began engaging on the issue in 2014. This
year, we found that while boards are starting to see climate change
as a risk that needs to be mitigated, they are responding in a
short-term tactical manner to a long-term strategic challenge.”
In 2018, State Street’s stewardship team focused on board
guidance in several sectors, including retail, pharmaceuticals, and
materials. In addition, they also focused on broader themes of
corporate governance in the U.S., U.K., Australia, and Europe; pay
strategies; and the incorporation of sustainability into long-term
strategy. The firm engaged with 1,530 companies on key stewardship
issues, representing about 70 percent of the firm’s equity assets
under management. Almost half of those engagements were
comprehensive engagements centered around in-person meetings or via
conference calls, while the rest focused on letter-writing
campaigns. The report also provides insights into the impact of its
stewardship program over the last year by sharing illustrative
examples of company responsiveness to State Street’s voting or
engagement action.
ESG Integration
The report details the ways in which State Street has
prioritized ESG integration across strategies and investment teams.
The firm has invested significant resources into building R-
Factor™ — proprietary ESG scoring system launched this year,
measuring the performance of a company’s business operations and
governance as it relates to financial material ESG issues facing
the company’s industry. Using transparent materiality frameworks
and more than 450 data points from four leading data providers, the
system scores more than 5,000 companies on their ESG practices.
“We’ve dedicated significant time and resources to developing
R-Factor™ because of our belief in the value of ESG integration
across investment strategies,” said Kumar. “By sharing R-Factor™
scores and educational ESG resources with portfolio companies, and
developing investment solutions powered by the system, we are
enabling investors and companies to help us build more sustainable
capital markets for the future.”
For more information on State Street Global Advisors’ asset
stewardship program, click here. To view the full report, click
here.
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 nearly US $2.90 trillion*
under our care.
* This figure is presented as of June 30, 2019 and includes
approximately $36 billion of assets with respect to SPDR products
for which State Street Global Advisors Funds Distributors, LLC
(SSGA FD) acts solely as the marketing agent. SSGA FD and State
Street Global Advisors are affiliated.
Investing involves risk including the risk of loss of
principal.
The whole or any part of this work may not be reproduced, copied
or transmitted or any of its contents disclosed to third parties
without State Street's express written consent.
State Street Global Advisors, One Iron Street, Boston, MA
02110
2716221.1.1.AM.RTL
EXP: 9/30/20
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Olivia Offner +1 617 662 0198 ooffner@statestreet.com
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