State Street Global Advisors, the world's third largest asset manager, is intensifying efforts for corporate boards to help combat climate change.
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.
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
"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.
