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SSGA 2019 Proxy Voting Guidelines and Engagement Highlights

State Street Global Advisors

State Street Global Advisors has released its Proxy Voting and Engagement Guidelines for 2019. State Street also provided an engagement protocol – State Street Global Advisors’ Issuer Engagement Protocol which aims to make State Street’s engagement activities more transparent and also includes guidance on activist investors and shareholder proposals.

Issuers may want to take note of two areas on which State Street continues to focus on.

Environmental and Social Issues

State Street articulates its approach to environmental and social issues in its Global Proxy Voting and Engagement Guidelines for Environmental and Social Issues. SSGA is focused on environmental and social (sustainability) issues that are material to its portfolio companies – with the goal of mitigating sustainability risks in its portfolio. SSGA uses several frameworks to gauge the materiality of environmental and social (sustainability) issues at a company.

Those include:

  • The Sustainability Accounting Standards Board (SASB)
  • Materiality Map
  • The Task Force on Climate-related Financial Disclosures (TCFD) Framework
  • Disclosure expectations in a company’s given regulatory environment
  • Market expectations for the sector and industry
  • Other existing third-party frameworks, such as the CDP (formally the Carbon Disclosure Project)
  • Their proprietary R-Factor score which aligns with the SASB materiality map

SSGA also attempts to proactively engage with companies by sector or industry using their own R-Factor scoring or as part of their annual stewardship planning they identify prioritized themes to address with them.

Board Gender Diversity

As a reminder, State Street has enhanced its board gender diversity voting guidelines. Beginning in 2020, in the US, UK and Australian markets (with other markets to follow), State Street will vote against the entire slate of directors serving on a company’s nominating committee if that company does not have at least one woman on its board and has not engaged in successful dialogue with State Street Global Advisors’ regarding board gender diversity for three consecutive years.

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