Press release
ESG Disclosure #1 Topic of Engagements in 2019 Between T. Rowe Price and Company Managements
Climate Change Risk is Rising, But Longer-Term Vulnerabilities Masked by Limited Impact on Near-Term Cash Flows Income Inequality Is One of the Defining
About this update from T. Rowe Price Group, Inc.
[{"type":"text","content":"Climate Change Risk is Rising, But Longer-Term Vulnerabilities Masked by Limited Impact on Near-Term Cash Flows\n Income Inequality Is One of the Defining Socioeconomic Issues of Our Time--Coronavirus Pandemic Further Heightens the Importance of This Investment Issue\n Shareholder Proposals Mean Well, But Are Not Effective at Driving Meaningful Change\n\n\nBALTIMORE, May 11, 2020 /PRNewswire/ -- In an era of rising concerns about climate change, T. Rowe Price reported today that environmental, social and governance (ESG) disclosure issues became the number one topic in its voluminous engagements with the managements of companies around the world in 2019. Looking to the future, the $1.01 trillion1 global asset manager said that the rising risks associated with climate change will impact virtually its entire universe of portfolio holdings to varying degrees. Therefore, climate change alongside other ESG factors is being increasingly factored into analysts' evaluation of company fundamentals.\n\nAccording to the firm's second annual ESG Report, ESG is being ingrained into its investment processes, impacting how it interacts with thousands of company managements in its portfolios and how it casts its proxy votes, and influencing its advocacy efforts to protect shareholder rights. \nThe report also presaged the profound changes in corporate governance that might arise in the aftermath of the COVID-19 pandemic. \n\"It is too early to draw conclusions about the long-term effect this virus will have on companies and economies, but what is clear at this stage is that the culture and values of corporate issuers around the world are being tested like never before,\" Donna Anderson, Head of Corporate Governance, said in the report. \n\"Companies' previous statements about their management of human capital, health and safety, community involvement, and the overall importance of stakeholders to their businesses will be assessed in a whole new context. We predict that these topics will become central to the engagement that takes place between investors and corporations.\" \nThe firm's fundamental investment process is supported by a proprietary Responsible Investing Indicator Model (RIIM) that proactively assesses responsible investing profiles of more than 14,000 corporate and sovereign entities, globally. The RIIM analysis spans more than 20...