From 2023, State Street Global Advisors (SSGA) will “hold directors accountable” where companies “fail to show adequate progress” on meeting climate disclosure expectations, according to the fund manager’s latest report.

SSGA’s inaugural Taskforce for Climate-related Financial Disclosure (TCFD) report, published Tuesday, examines the $4.14 trillion fund manager’s governance approach, strategy, and engagement processes in relation to climate change.

Holding companies accountable

Following the establishment of SSGA’s ESG Committee this year, the fund manager has committed to strengthening its engagement with portfolio companies on climate change.

In 2021, the fund manager held 254 engagements with companies to “understand their approaches to climate change,” almost double the 148 engagements SSGA held one year prior.

For the first time this year, SSGA announced it would take voting action against companies in the S&P 500, S&P/TSX Composite, FTSE 350, STOXX 600, and ASX 100 indices if they “fail to provide sufficient disclosure in accordance with the TCFD framework,” including disclosing Scope 1 and 2 emissions and related reduction targets.

Starting in 2023, the fund manager revealed it will launch an engagement campaign on climate transition plan disclosure, targeting “significant emitters in carbon-intensive sectors.”

Where companies fail to show adequate progress on meeting these climate plan disclosure expectations, SSGA will vote against relevant directors.

So far this year, SSGA has voted in favor of 91.2% of director reelections at U.S.-listed companies, compared to 87% throughout both 2020 and 2021, according to Insightia’s Voting module.

Shareholder proposal support

According to SSGA’s report, the fund manager voted on 105 climate shareholder proposals in 2021, a “significant increase” compared to the number of proposals subject to a vote in previous years.

SSGA was largely supportive of proposals seeking “say on climate” votes and climate-related lobbying disclosure, supporting approximately 80% of proposals of this kind.

The fund manager lent its support to roughly 50% of shareholder proposals in 2021 seeking emissions reduction targets and additional climate-related disclosure, according to the report.

Overall, the fund manager was “generally not supportive” of resolutions concerning transitioning to renewable energy within a defined timeframe or phasing out a project, business, or product because it “found the actions requested by many of these shareholder proposals to be overly prescriptive.”

So far this year, the fund manager has supported 36.4% of shareholder proposals seeking climate change reporting and 33.3% seeking enhanced environmental reporting, according to Insightia data.