State Street has expressed its belief that “the COVID-19 crisis accelerates the need for transformative change to address climate change” and that it will continue to “encourage companies to disclose how they are addressing both climate risks and opportunities through engagement and voting on shareholder proposals.” In addition, State Street recently became a member of Climate Action 100+, an investor engagement initiative on climate change, and announced that its climate change focus will be on companies it believes are “especially vulnerable to the transition risks of climate change,” as well as “companies in other sectors that, while not as carbon intensive, also face risks such as the physical impacts of climate change.”

To date, there have been a few activist investor situations in which the investment hypothesis involved the potential upside of more climate-friendly changes in operations. Perhaps the largest test of this activist strategy will take place in 2021 as a major U.S. oil company faces the prospect of a proxy fight to refresh the board of directors with candidates the activist views as more capable of implementing the strategic changes necessary to create value in a world adapting to climate change.

US Corporate Governance: The Ascension of ESG | Skadden, Arps, Slate, Meagher & Flom LLP – JDSupra