Stockholm (NordSIP) – State Street Global Advisors (SSGA) has signalled a move towards a more tailored approach to ESG investing with the launch of a new opt-in Sustainability Stewardship Service on 1 May 2025.
The U.S. asset management giant and its ‘Big Four’ peers BlackRock, Vanguard, and Fidelity Investments have been significantly reducing their support of sustainability related shareholder resolutions over the past four years. SSGA’s home market has also seen a general shift away from ESG-related matters and corporate engagement with the recent implementation of more complex and stringent regulations by the Securities and Exchange Commission (SEC). SSGA was also the subject of large asset outflows from major European investors in February and March 2025. Both the UK’s People’s Pension and Denmark’s AkademikerPension cited sustainability related concerns as the main motivation for withdrawing a total of more than €32 billion from SSGA.
The new Sustainability Stewardship Service launched this month appears designed to address the increasingly divergent needs of SSGA’s global client base. Clients benefiting from segregated mandates will now be able to opt in to a newly drafted Sustainability Policy that focuses on climate change, nature, human rights, and diversity. Opt-in clients include all SSGA European-registered funds as well as individual asset owners. Topics that fall outside the four stated themes will be covered by the State Street Global Advisors’ Global Proxy Voting and Engagement Policy (the Global Policy).
A cautiously worded Sustainability Policy
The Sustainability Policy applied to opt-in clients includes several caveats seemingly designed to avert any potential regulatory problems: “The Sustainability Policy will not be applied in any jurisdictions where implementing the Sustainability Policy would be deemed to constitute seeking to change or influence control of portfolio companies.” Proxy voting on behalf of opt-in clients will also be constrained by the Global Policy, which specifies certain categories of securities that cannot be voted upon by SSGA.
The Sustainability Policy is heavily focused on corporate disclosures across the four themes rather than specific actions or sustainability targets. The section on diversity is relatively sparse, with a commitment to consider the representation of females and/or racial minorities on company boards. The Sustainability Policy also states that appropriate gender diversity on boards depends on ‘culture’, and that effective board oversight of a company’s long-term business strategy necessitates racial/ethnic diversity only in ‘select markets.’ It remains to be seen how these clauses will be interpreted in practice and whether they will meet the requirements of European asset owners.
In announcing the new opt-in stewardship service SSGA also named Hannah Shoesmith as its new head. Shoesmith joined the firm this month as Managing Director and Head of Sustainability Stewardship, having previously served as Head of Engagement at Schroders.
