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Daily ESG Briefing: State Street to push fixed-income stewardship

The latest developments in sustainable finance

State Street Global Advisors has published its annual stewardship report, saying it will focus more on bonds in coming years. “Most data providers capture information at the parent public company level, which is difficult to link to individual fixed income issuances”, it said, a challenge that in 2018 prompted it to map equity ISINs to their fixed income counterparts so that its own ESG scores can be applied to both. “This mapping will allow us to further integrate our fixed income holdings into our prioritization, engagement and other stewardship activities in the coming years,” it said.

Companies should drive long-term performance by replacing existing short-term executive pay packages with longer-term remuneration plans, according to new research from non-profit FCLT Global. The research found that the average duration of executive compensation plans for CEOs of the MSCI All Country World Index was just 1.7 years. It recommended that provisions that drive short-term behaviour, such as large, one-off moments of financial reward, should be replaced.

Fintech firm Sugi has launched a tool allowing UK retail investors to check how their investments align with the Paris Agreement. The tool uses Trucost data to show users their overall ‘portfolio temperature’. Fellow fintech company YUKKA Lab has partnered with fund services platform Universal Investment to assess companies’ ESG ‘sentiment’ using machine learning and AI to analyse media reports from over 100,000 sources to extract ESG information on companies.

Legal and General has published its 2020 TCFD report, which claims that the carbon intensity of its £95bn proprietary investment portfolio will be reduced by 50% by 2030. Its investment management wing cast 139,000 ‘ESG stewardship votes’ on behalf of its clients. 

The US Securities and Exchange Commission has launched a webpage dedicated to consolidating information on ESG-related agency actions. The page will appear on the front page of the SEC’s website and be continually updated with new ESG information.