As part of the global community, investors and financial institutions are taking up the role of climate stewardship to direct investments toward projects and industries that better support the world we live in.
“Our voting on climate change is typically prompted by shareholder proposals. However, we may also take voting action against directors even in the absence of shareholder proposals for unaddressed concerns pertaining to climate change. The number of climate-related proposals on company ballots has been steadily increasing over the past few years. Annually, we review and vote every climate-related proposal in our portfolio. We also endeavor to engage with the proponents of shareholder proposals to gain additional perspective on the issue, as well as with companies to better understand how boards are managing relevant risks,” according to a State Street Global Advisors research note.
State Street Global Advisors has engaged with companies to understand how they are mitigating and managing the physical and transitional impacts of climate change. SSGA’s engagement approach leverages the four dimensions of the Task Force on Climate-related Financial Disclosures framework, including Governance, Strategy, Risk Management, and Metrics. Companies are expected to disclose their approach to identifying climate-related risks and the management policies and practices to address these growing issues.
“We believe climate change is one of the biggest risks in investment portfolios today. These risks impact almost all segments and industries – not just the obvious polluters. However, with climate risk comes tremendous investment opportunity as the economy reworks against the impact of climate change,” according to SSGA.
As a signatory of the Task Force on Climate-related Financial Disclosure recommendations, SSGA is engaging with companies to review the quality of their climate reporting and to understand how boards oversee climate-related risks. State Street is committed to cutting their carbon emissions on an absolute basis over the next 10 years in accordance with the Science-Based Targets initiative, with a target of achieving carbon neutrality for Scope 1 natural gas and Scope 2 electricity consumption emissions this year.
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