State Street

Today I interviewed Rakhi Kumar, Head of ESG Investments and Asset Stewardship at State Street Global Advisors. SSGA is more progressive on environmental issues than BlackRock and Vanguard by a long shot. But it still falls far short of the level of fiduciary duty that is fit for purpose on a melting planet.

SSGA supported most of the resolutions that we think are common sense (requiring utilities to disclose the risks they face relating to climate change). However. SSGA asks only that utilities disclose an emissions target. They don’t offer an opinion on what the target should be in five years or 10 years time. The International Energy Agency provides guidance on what rate of emissions reduction is needed for global warming to be held to a life-sustaining 2 degrees Celsius. And that rate is rapid. So investors should, in my mind, be making clear demands of utilities that emissions reductions be in line with the 2-degree goal set out in the Paris Agreement.

Yes, Trump has walked away from the agreement. However the time horizon for investors and their beneficiaries (primarily future retirees) is not the four-year election cycle. The risks utilities face stand outside the political sphere. Ask Puerto Rico. Or a California utility whose grid was destroyed by wildfires. Or power generators who are losing their largest customers because they have contracted with independent producers of clean energy.

Whew. Sorry. I’m up to my eyeballs in this stuff. Tonight I went to the weekly swing dance lesson at Queen’s University. It was so good to see all my old dance buddies. I didn’t dance terribly well, I have some work to do to get my mojo back. I’ve missed about two months of lessons, during which they covered swing outs, which I totally don’t get. Hopefully they’ll cover them again.
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