Tag: climate risk
For the 2022 proxy season, SSGA continues its emphasis on climate and diversity transformation
In his last letter to boards as CEO of State Street Global Advisors, Cyrus Taraporevala (who has announced his planned retirement this year) writes that we are at a “moment of significant transition,” facing many challenges, including a pandemic, climate change and gender, racial and ethnic inequities, that have led to economic disruption and even political instability. How should companies address these challenges? SSGA expects its portfolio companies to manage “these threats and opportunities by transitioning their strategies and operations—enhancing efforts to decarbonize and embracing new ways of recruiting and retaining talent—as the world moves toward a low-carbon and more diverse and inclusive future.” Accordingly, SSGA’s “main focus in 2022 will be to support the acceleration of the systemic transformations underway in climate change and the diversity of boards and workforces.”
Why have institutional investors become so outspoken on corporate governance issues at their portfolio companies?
The substantial increase in activism on corporate governance issues by large institutional shareholders and asset managers qua investors has been hard to miss. Now, joining the ranks of these other enormous asset managers and passive institutional investors—such as BlackRock and State Street (see, e.g., this PubCo post, this PubCo post and this PubCo post)—Vanguard has recently announced, in its Investment Stewardship Report for 2017, that it too has been taking a more active role in advocating for effective corporate governance at its portfolio investments. But what has triggered this shift? After all, it’s not as though these institutional investors are new to the sport—they’ve been shareholders for many, many years, but mostly of the low-key variety. Why this noisy advocacy now?
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