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Stewardship Engagement Guidance to Companies in Response to COVID-19
Dear Board Members,
As business leaders, we are all concerned about what the outbreak of COVID-19 and its rapid spread mean for the health of our employees, our customers and our companies, as well as the overall resiliency of economies and society.
Many of you have already taken extraordinary steps to shift your operations to help, from repositioning production lines to create ventilators and protective masks to funneling resources into developing new vaccines and therapies. And many more are continuing to pay workers while operations are shuttered or making contributions supporting food banks and first responders.
In addition to the public health concerns, this crisis has already been a major disruptor to the global economy, which in turn has strained our financial system. As a long-term investor in your company, State Street Global Advisors would like to share some perspectives on our asset stewardship agenda for 2020 in light of these extraordinary circumstances.
In my letter to you in January, we reinforced our ongoing commitment to engaging with you on a wide range of material environmental, social and governance (ESG) issues related to your company. While we remain committed to ensuring that companies in our portfolios address these issues as a matter of good business practice and long-term financial performance, COVID-19 will undoubtedly have near-term implications for companies and their boards.
We recognize that our engagement conversations will shift to more immediate ESG issues such as employee health, serving and protecting customers and ensuring the overall safety of supply chains in the context of the current crisis – the scope and duration of which none of us can predict.
In addition, we know that you, as directors, are also faced in the short-term with focusing on your companies’ financial resiliency. For instance, many companies are considering reducing their capital spending, share buybacks, dividend payments and expenses. We recognize that balancing the diverse—and sometimes competing—needs of employees, customers, shareholders, regulators, and the broader community will differ by company, industry, and region. As we have invested in your companies, and engaged with you for many years, we are sensitive to those distinctions and committed to helping you think through the short- and long-term implications of those decisions.
That being said, we continue to believe that material ESG issues must be part of the bigger picture and clearly articulated as part of your company’s overall business strategy. With this in mind, we encourage you to:
Refrain from undertaking undue risks that are beneficial in the short term but harm longer-term financial stability and the sustainability of your business model;
Communicate to investors COVID-19’s short- and medium-term potential impact to your business, overall operations and supply chains, including management preparedness and scenario-planning and analysis;
Articulate how COVID-19 might impact or influence your company’s approach to material ESG issues as part of your long-term business strategy.
Lastly, to continue to help stop the spread of the virus, we encourage companies to follow guidance from government authorities to either postpone your shareholder annual general meetings (AGMs) or shift to virtual meetings. When conducting an annual meeting virtually, we expect companies to preserve all the rights and opportunities afforded to shareholders through a physical meeting. Most importantly, shareholders should be able to have active and robust interactions with management and the board at appropriate times.
As always, we stand ready to engage with our portfolio companies to discuss the challenges of balancing both short- and long-term priorities. Do not hesitate to contact our stewardship team at GovernanceTeam@SSGA.com.
We recognize that a global health and economic crisis of this magnitude presents extraordinary challenges for businesses, families and communities around the world. On behalf of my entire team at State Street Global Advisors, we send you our best wishes for good health and safety.
President & CEO
State Street Global Advisors
Investing involves risk including the risk of loss of principal. The views expressed in this material are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. All statements, other than historical facts, contained within this document that address activities, events or developments that SSGA expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions and analyses made by SSGA in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances, many of which are detailed herein. Such statements are subject to a number of assumptions, risks, uncertainties, many of which are beyond SSGA’s control. Please note that any such statements are not guarantees of any future performance and that actual results or developments may differ materially from those projected in the forward-looking statements.
ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns.
SSGA SPDR ETFS MAY NOT BE AVAILABLE OR SUITABLE FOR YOU. THE VIEWS EXPRESSED/INFORMATION IN THIS SITE DO NOT CONSTITUTE INVESTMENT ADVICE, FINANCIAL, LEGAL, REGULATORY, ACCOUNTING OR TAX ADVICE. INDEPENDENT ADVICE SHOULD BE SOUGHT IN CASES OF DOUBT. NEITHER THE INFORMATION NOR ANY OPINION CONTAINED ON THIS SITE CONSTITUTES A SOLICITATION OR OFFER TO BUY OR SELL SHARES OF THE FUNDS OR ANY OTHER FINANCIAL INSTRUMENT.
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SPDR ETFs may be offered and sold only in those jurisdictions where authorised, in compliance with applicable regulations.
Information related to Mexico
This information does not constitute and is not intended to constitute marketing or an offer of securities and accordingly should not be construed as such. The Funds referenced herein have not been, and will not be, registered under the Mexican Securities Market Law (Ley del Mercado de Valores) and may not be publicly offered or sold in the United Mexican States. Disclosure documentation related to any of the aforementioned Funds may not be distributed publicly in Mexico and shares of the Funds may not be traded in Mexico.
UCITS SPDR ETFs
SPDR ETFs Europe I Plc and SSGA SPDR ETFs Europe II Plc issue SPDR ETFs, and are an open-ended investment company with variable capital having segregated liability between its sub-funds. The Company is organised as an Undertaking for Collective Investments 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) lit. a and b. of the Swiss Act on Collective Investment Schemes (CISA). 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, and such funds might not qualify as foreign Collective Investment Schemes under Article 120 of the Collective Investment Schemes Act. Accordingly, the shares of those funds may only be offered to Qualified Investors and not be offered or solicited to any other investor in or from Switzerland, unless they are placed without public solicitation as such term is defined by the Swiss regulations and/or FINMA from time to time 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.spdrs.com, as well as from the main distributor in Switzerland, State Street Global Advisors AG (“SSGA AG”), Beethovenstrasse 19, 8027 Zurich. For additional documentation regarding those funds not registered for public sale, please contact SSGA AG.
You should obtain and read the SPDR 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 SPDR funds, including information relating to costs, risks and where the funds are authorised for sale.
US SPDR ETFs
The distribution of interests of U.S. SPDR ETFs in Switzerland will be exclusively made to, and directed at, qualified investors (the "Qualified Investors"), as defined in the Swiss Collective Investment Schemes Act of 23 June 2006, as amended ("CISA") and its implementing ordinance. Accordingly, U.S. SPDR ETFs are not registered with the Swiss Financial Market Supervisory Authority ("FINMA"). The legal documents of the U.S. SPDR ETFs can be obtained free of charge from Swiss Representative & Swiss Paying Agent State Street Bank International GmbH Beethovenstrasse 19 8027 Zurich, Switzerland Tel: +41 44 560 5000.
Before investing, consider the funds' investment objectives, risks, charges and expenses. To obtain a prospectus which contains this and other information, download a prospectus here, or talk to your financial advisor. Read it carefully before investing.