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NYC Comptroller Stringer Reports Progress on Project to Boost Board/CEO Diversity

Last week, New York City Comptroller Stringer announced the progress of the Boardroom Accountability Project 3.0 (Project 3.0) that is designed to foster diversity in the leadership of the companies in which the New York City Retirement Systems (NYCRS) invests. As an actively-engaged investor with sizeable assets under management (NYCRS reports that it had approximately $211.2 billion as of February 2020), NYC Comptroller Stringer notes that prior project campaigns have helped to facilitate the prevalence of important corporate governance matters, such as proxy access and greater board diversity transparency.

As described more fully in our prior post, Project 3.0’s objective is to increase the accessibility of director and CEO positions for women and persons of color by encouraging companies to adopt a “Rooney Rule” policy, resembling the one employed by the National Football League.
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BlackRock Releases Its 2020 Public Company Engagement Priorities

While managing COVID-19 related risks and impacts may be the current priority for many public companies, BlackRock provided a reminder yesterday that environmental, social and governance (ESG) issues will form a core part of its engagement strategy this proxy season.  Publishing its investment stewardship team’s public company engagement priorities for 2020 (Priorities), BlackRock stressed, among other things, that it intends to hold board directors accountable for demonstrating “material progress” on ESG-related disclosures and practices.

BlackRock’s 2020 Investment Stewardship Engagement Priorities

The Priorities place an enhanced focus on sustainability-related issues and disclosures. Moreover, the Priorities articulate key performance indicators against which the asset manager will track companies’ progress and identify those directors whom it will hold responsible for demonstrating progress on these issues. 
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A Snapshot of Board-Shareholder Engagement Trends

Directors of SEC-registered public companies are increasingly taking a more active role in the shareholder engagement process given the evolving corporate governance landscape, including the increasing number of requests for their participation by some of the largest institutional investors. The Conference Board and Rutgers University’s Center for Corporate Law and Governance have recently published a report showing the emerging practices surrounding when and how corporate directors engage with shareholders based on a survey administered in 2018. Because board-shareholder engagements are often undisclosed and private, the results from this survey provide greater insight about how these communications are evolving and may help public company boards prepare for their shareholder engagements going forward.
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NYC Comptroller Stringer Suggests “Rooney Rule” to Boost More Women and People of Color in Corporate Leadership

The New York City Retirement Systems (NYCRS) continues its effort to foster diversity in the leadership of the companies in which it invests. NYCRS is a collection of pension funds that together have over $200 billion in assets under management, and Comptroller Stringer serves as the investment advisor and custodian/trustee.

Boardroom Accountability Project 3.0

Last week, Comptroller Stringer announced the launch of the latest phase of the NYCRS’ shareholder engagement initiative, Boardroom Accountability Project 3.0.  With each phase, the NYCRS designates one or more themes on which to engage with its portfolio companies.  Project 3.0’s theme is increasing the accessibility of director and CEO positions for women and persons of color by encouraging companies to adopt a “Rooney Rule” policy, resembling the one employed by the National Football League. 
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ISS Ratings and Data Now Available on Open:FactSet Marketplace

ISS ESG, the responsible investment arm of ISS, is now offering its ESG data on FactSet’s Open:FactSet Marketplace. ISS ESG is the umbrella entity that consists of ISS-ethix, which focuses on responsible investment issues and related screens, ISS-climate, which provides climate data, analytics and services to financial market participants and ISS-oekom, which provides ESG research and ratings, including ISS’s Governance QualityScore and E&S Disclosure QualityScore.  Open:FactSet Marketplace is a platform offering aggregated data and analytics from various data providers to provide a single point of access for asset managers and other investment professionals.  FactSet, which owns Open:FactSet, reportedly has approximately 100,000 users, but it is unclear how many of these subscribe to its Open:FactSet Marketplace offering.
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BlackRock Releases Its Quarterly Engagement and Voting Numbers

BlackRock has released its Investment Stewardship Report for the Americas region (United States, Canada and Latin America) for the second quarter of 2019.  The majority of the investor’s stewardship activities during this quarter entail voting and direct engagements to inform its voting decisions given that a majority of its portfolio companies’ shareholder meetings are scheduled in this time period. In sum, in comparison to the second quarter of 2018, BlackRock has engaged with approximately 9% fewer companies in the Americas, and for North America (United States and Canada) the percentage of proposals BlackRock has voted against managements’ recommendations, while still low, has increased from 4% to 7%.
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ESG in the US: Current State of Play and Key Considerations for Issuers

Davis Polk recently contributed a chapter to The International Comparative Legal Guide: Corporate Governance 2019 titled ESG in the US: Current State of Play and Key Considerations for Issuers. With the growing importance of environmental, social and governance (ESG) issues to public companies and their investors, this chapter aims to provide insights on the current ESG landscape – from the voting policies and ESG investing platforms of top asset managers to the dizzying array of ESG disclosure regimes and third-party raters.

Read the Full Chapter >
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State Street’s New ESG Scoring Tool – Companies and ESG Raters Take Note

Introduction. Earlier this week, we learned that State Street Global Advisors, or SSGA, has created and is currently applying its new Environmental, Social, and Governance (ESG) platform, known as “R-Factor,” to better inform its investment, engagement, voting, and other decisions regarding any given company. SSGA says that it built R-Factor, its own scoring system, because it believes that the current ESG reporting and scoring landscape lacks standardization and transparency. Moreover, SSGA found that differing methodologies used by the current ESG raters can lead to a variance in company scores. These differences can be critical as asset owners and investment managers seek consistent, comparable and material ESG-related information for their investment analyses.
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