State Street Global Advisors said it has prioritised a deeper examination of ESG integration across its investment strategies as it released its Annual Stewardship Report for 2019.
While environmental, social, and governance considerations has always been a part of its firms' approach, the prioritisation in integration is a reflection of its view that these issues are becoming more important as drivers of return and risk, SSGA said.
"Stewardship is integral to our investment approach because we regard it is an essential aspect of fulfilling our fiduciary duty. We are committed to practicing proactive responsible stewardship across our entire asset base," said global chief investment officer Rick Lacaille.
In 2020, SSGA's stewardship team will continue to explore how its portfolio companies can navigate issues foregrounded in 2018, such as gender diversity and human capital management, in order to deliver better long term value, he added.
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Among its findings, the $4.2 trillion global asset manager has identified still-inadequate action on the part of companies in climate risk and reporting.
It said while progress is being made on managing the risk, it is not happening at the pace commensurate with the challenge; companies are responding tactically, in a short-term manner, to the longer-term, strategic challenge that is climate risk.
On the other hand, strides were made in increasing gender diversity in boardrooms, with the asset manager's Fearless Girl Campaign attracting the most engagements out of all topics.
"The big difference between the start of the campaign and today is that the conversation in boardrooms has moved from "why do we need a woman" to "why don't we need a woman" on the board," the report said.
"I am especially pleased to announce that as of June 30, 2019, 43% of the 1,350 companies identified as part of our Fearless Girl campaign responded to our call by either adding a female director or committing to do so," head of ESG investments and asset stewardship Rakhi Kumar said.
"Our stewardship program is designed to have an impact."
The SSGA annual report provides a comprehensive look at the asset stewardship team's engagement efforts.
This includes the impact of core multi-year campaigns focused on gender diversity and climate change, its increased focus on key social issues, and a briefing on how the asset manager is integrating ESG and SSGA's ESG scoring system, "Responsibility-Factor", across stewardship efforts.