Stewardship Activity Report: Q3 2017
Mercer Confirms SSGA's ESG Practices for Passively Managed Equity Strategies as ESGp2
During the quarter, Mercer upgraded their assessment on SSGA’s ESG practices for passively managed equity strategies from ESGp3 to ESGp2. Mercer’s global manager research team rates the overall quality of ESG/Active Ownership activities for passive managers using ESG-Passive (ESGp) rating scale of 1–4.
This report provides a preview of the upcoming Australia proxy season, reviews the Shareholder Rights Directive in Europe, evaluates State Street Global Advisors' ("SSGA's") response to the UK Government's Corporate Governance Green paper, and highlights our gender diversity and sustainability efforts in the US.
Preview of the Australia Season
Based on early engagements with Australian companies, and conclusions from the 2016 proxy season, SSGA will be focusing on the following themes this proxy season:
Board Diversity Remains of Focus
Australia is one of the three focus markets that SSGA identified in connection with the Fearless Girl campaign launched in Q1 2017. We sent a letter to 38 companies in the ASX 300 that we identified as lacking a single woman on the board. Included within the letter were our expectations for diversity on boards and our preferred approach for active dialogue and engagement with companies as a driver for greater board diversity. However, we also clarified that in the event that ASX 300 companies failed to take action to increase the number of women on their boards, we would use our proxy voting power to effect change by voting against the Chair of the board's nominating and/or governance committee if necessary. Since adopting our new guidelines, we voted against directors for this reason at 5 Australian companies.