January 1, 2020
State Street Global Advisors (SSGA): The Importance of the R-Factor
Is State Street Global Advisors Using the R-Factor to Drive Corporate Sustainability?
Leading asset managers are increasingly relying on ESG data to guide investment decisions, and State Street Global Advisors (SSGA) is at the forefront with its proprietary scoring tool, the R-Factor (“R” for Responsible). This framework evaluates thousands of companies on ESG performance and informs how SSGA engages with boards, management teams, and proxy voting decisions.
Key Findings
SSGA’s R-Factor has already assessed the ESG performance of 6,000 public companies worldwide.
The scoring system integrates data from third-party ESG providers and aligns with established sustainability reporting standards.
SSGA is signaling it will use proxy voting power to press boards lagging on ESG integration or failing to engage with the firm.
Summary
Since 2017, SSGA has been urging boards of directors to embed ESG and sustainability considerations into their long-term corporate strategies. The R-Factor has become a central tool in this effort, providing a transparent and systematic method for evaluating ESG performance. In January 2020, CEO Cyrus Taraporevala issued a letter to boards emphasizing that proxy voting would increasingly be used as leverage to push for greater accountability and progress. This move highlights how influential asset managers are shaping the ESG disclosure landscape and placing real pressure on companies to act.
What You’ll Learn
This Resource Paper explains the background and significance of the R-Factor, including which third-party ESG data providers State Street relies on, the sustainability reporting standards it prioritizes, and the four core pillars of its scoring methodology. It also explores the broader purpose behind SSGA’s push, offering insights into how companies can prepare for investor expectations and the growing integration of ESG into corporate governance and investment decisions.
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