State Street Global Advisors has revealed it engaged with over 1,500 companies last year as part of its ESG stewardship program.
The company’s Annual Stewardship Report, which showcases the engagement work undertaken in 2018 and the first half of 2019, reveals SSGA voted over 17,400 meetings and engaged with 1,533 companies, representing more than 70 per cent of its 2018 assets under management in 2018.
The Boston-based firm, one of the world’s largest asset managers with US $2.9 trillion assets, engaged with companies on a number of emerging ESG topics including gender diversity, pay equality, wage strategies, sexual harassment in the workplace and worker retraining.
Last year, SSGA said it sent letters to 344 companies concerning gender diversity and 500 letters to S&P 500 companies on their compliance with the Investor Stewardship Guidelines.
As of 30 June 2019, the firm has voted over 12,600 meetings and held more than 1,400 engagements.
The report also showed companies are responding to SSGA’s call to make their boardrooms more diverse, with 583 of the 1,357 companies it identified (43 per cent) adding a woman to their board or committing to do so.
On climate change, it has conducted more than 365 engagements since it began engaging on the issue in 2014. However, the asset firm said while progress is being made on managing climate risk, it is not happening at the pace commensurate with the challenge.
This is due partly to the mismatch between shorter term company planning cycles and the longer term nature of climate risk, according to the company.
In addition, while a number of companies including Commerzbank AG, Elekta AB, Heineken N.V., MTU Aero Engines AG, and Storebrand ASA, improved their governance practices prior to their annual general meetings, SSGA voted against 69 companies that could not satisfy its ‘comply-or-explain’ expectations.
“While ESG considerations have always had a place in our firms’ approach, over the past year we have prioritised 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,” Rick Lacaille, global chief investment officer at State Street Global Advisors, said.