Climate change is a key systemic risk, representing both a strategic and business challenge for all companies in our portfolios. Since 2014, we have prioritized climate change as a core theme of our stewardship activities.
Voting and Engagement
We believe climate change poses a systemic risk to all companies in our portfolios. The Task Force for Climate-related Financial Disclosures (TCFD) framework has become table stakes for any climate-related discussion, with investors increasingly using this new information to tilt, or even transform, their portfolios for the future. To drive broad climate action and TCFD adoption in the market, we will begin taking voting action in 2022 against companies in major indices in the US, Canada, UK, Europe, and Australia, if companies fail to meet our climate-related disclosure expectations.
As is typical across ESG issues, we will ﬁrst approach our climate-related disclosure expectations with companies through engagements. If we encounter laggards that are not making suﬃcient progress as a result of our engagements, we will consider taking action using our votes, either by supporting relevant shareholder proposals or voting against directors at an upcoming shareholder meeting.
Our Voting Record on Climate-related Shareholder Proposals
Climate-related shareholder proposals submitted to our portfolio companies going to vote during 2021
Climate-related proposals we supported in 2021
Proposals requesting GHG emissions reduction targets we supported in 2021
There was a signiﬁcant increase in the number of climate-related shareholder proposals submitted to our portfolio companies during 2021 with over 100 proposals going to vote (compared to 58 in total in 2020 and 47 in 2019). We supported 49% of climate-related proposals in 2021. 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.
We continue to advocate for enhanced disclosure aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), and in 2021 we supported 54% of proposals requesting GHG emissions reduction targets. For more information on our approach to climate-related proposals in 2021, see our Q2 2021 Stewardship Activity Report.
Climate proposals vary in their content and intent as well as in their approach to advocating for a particular change in disclosure or practice. Some markets feature ‘binding’ shareholder proposals which provide companies with less ﬂexibility in implementing the expectations of majority supported proposals. We continue to generally oppose proposals that require companies to make speciﬁc operational changes such as a transition to renewable energy within a deﬁned timeframe. We ﬁnd the actions requested by these resolutions to be overly prescriptive.
Our Engagement Record
Engagements on climate-related issues since 2014
Climate-focused engagements conducted
Increase in climate-focused engagements compared to the previous year
In 2021, we conducted 254 climate-focused engagements, a 72% increase compared to the previous year (148 in 2020), reﬂecting our increased focus on this topic. Our engagements centered on how companies are both managing climate risk in their operations and addressing climate as an opportunity, and have been successful in driving improvement in both disclosure and long-term climate strategy.
Our engagement approach leverages the four dimensions of the TCFD recommendations:
In 2022, we will launch an engagement campaign on climate transition plan disclosure targeting significant emitters in carbon-intensive sectors. Through our engagements, we will aim to better understand climate transition plans and strategies, and gain insight on each company’s unique set of climate-related risks and strategic opportunities presented by the transition.
The Climate Action 100+ initiative seeks three central outcomes through engagement with companies on climate change: improving governance of climate change, reducing emissions, and strengthening climate-related disclosure. These goals are consistent with what State Street has advocated for in our company engagements, through our thought leadership, and, where needed, communicated through our voting process. The alignment between our climate stewardship approach and that of Climate Action 100+ is evident in our advocacy of the TCFD and Sustainability Accounting Standards Board (SASB) frameworks, which both are in line with the spirit of Climate Action 100+’s eﬀorts.
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.
Action at State Street
Climate-related Reporting and Commitments
Last April, we joined the Net Zero Asset Managers Initiative to ensure our portfolios reach net-zero greenhouse gas emissions by 2050 or sooner and set interim targets for 2030. We will be announcing our plans including our interim targets, Investor Climate Action Plan, and our State Street Global Advisors TCFD report by April 2022. We also call on asset owners to develop a universal disclosure requirement for all companies of a certain size in their portfolios — irrespective of whether they are publicly-traded or privately-held, to avoid the pernicious effects of ‘brown-spinning.”
UN PRI 2020 Leaders’ Group
We are proud to be among the 20 asset managers named to the 2020 Leaders' group for climate reporting.
The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.
All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information.
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 Global Advisors’ express written consent.
You should obtain and read a Key Investor Information Document and Prospectus relating to the SSGA Cash funds prior to investing. Further information, including the annual and semi-annual reports and the Key Investor Information Document and Prospectus describing the characteristics, charges, expenses and risks involved in your investments are available for residents of countries where SSGA cash funds are authorized for sale, at www.ssga.com/cash and from your local SSGA office or by calling +44 (0)20 3395 2333.
Investing involves risk including the risk of loss of principal. It is possible to lose money by investing in the funds.
Before investing, carefully consider a fund's investment objectives, risks, charges and expenses. Click the link to obtain a prospectus which contains this and other information, or by calling +44 (0)20 3395 2333, please read it carefully before investing.
SSGA LPLC UCITS
State Street Global Advisors Liquidity Public Limited Company ("the Company") is an umbrella type investment company with variable capital having segregated liability between its sub-funds. The Company is organised as an Undertaking for Collective Investment in Transferable Securities (UCITS) under the laws of Ireland and authorised as a UCITS by the Central Bank of Ireland.
This website is directed at Qualified Investors only, as defined by Article 10(3) and (3ter) of the Swiss Collective Investment Schemes Act (“CISA”) and its implementing ordinance. Certain funds may not be registered for public distribution with the Swiss Financial Market Supervisory Authority (FINMA), which acts as supervisory authority in investment fund matters, or may not have appointed a Swiss Representative and Paying Agent. For those funds which have appointed a Swiss Representative and Paying Agent, the prospectus, the articles of incorporation, the Key Investor Information Document (KIID) as well as the latest annual and semi-annual reports may be obtained free of charge from the Swiss Representative and Paying Agent, State Street Bank International GmbH, Munich, Zurich Branch, Beethovenstrasse 19, 8027 Zurich, or at www.ssga.com, as well as from the main distributor in Switzerland, State Street Global Advisors AG (“SSGA AG”), Beethovenstrasse 19, 8027 Zurich. For those funds which have not appointed a Swiss Representative and Paying Agent, please observe that the funds are open to Qualified Investors at the exclusion of Qualified Investors with an opting-out pursuant to Art. 5(1) of the Swiss Federal Law on Financial Services ("FinSA") and without any portfolio management or advisory relationship with a financial intermediary pursuant to Article 10(3ter) CISA (“Excluded Qualified Investors”). For further information and fund documents please contact SSGA AG.
You should obtain and read the sales prospectus and relevant Key Investor Information Document (KIID) prior to investing, which may be obtained by clicking here. These include further details relating to the State Street Global Advisors Liquidity Public Limited Company funds, including information relating to costs, risks and where the funds are authorised for sale.