State Street Global Advisors, the world’s third largest asset manager, is intensifying efforts for corporate boards to help combat climate change.
(Related: State Street Wants Companies to Focus on Sustainability)
Eights months after its CEO, Ron O’Hanley, wrote to board members that it will consider a company’s sustainability practices in its proxy votes, it is calling on corporate boards of oil and gas, utilities and mining companies to consider climate change as a significant risk and adopt long-term strategies to protect corporate assets from its impact.
(Related: How ESG Funds Have Changed Corporate Behavior)
State Street wants companies operating in what it terms “high-impact sectors” to:
- Disclose information on governance and board oversight of climate risk
- Establish and disclose long-term greenhouse gas emissions goals
- Disclose average and range of carbon price assumptions
- Discuss the impact of scenario planning on long-term capital allocation decisions
(Related: ESG Investing: No Longer Optional, but Essential)
“Disclosures in those four areas give investors the information that can help them evaluate the robustness of assumptions made in the scenario-planning process and the impacts on long-term strategy,” according to recent report from State Street.