TSC is excited to announce the publication of a full set of tools for investors who are ready to use their shareholder rights to protect critical social and environmental systems. As readers of this blog know, system stewardship is the most effective strategy available to diversified shareholders who want to optimize their portfolio returns.
This suite of tools will provide asset owners with principles to adopt and follow throughout the organization, references to important legal guidance, specific language for proxy-voting guidelines, and advisor mandates and other materials that provide a turnkey solution that investors can easily customize. These open-source materials are available on our website and will be updated as we receive feedback.
Investors have already developed highly effective tools to press companies to optimize their returns. These tools include engagement on social and environmental issues that is designed to increase returns and decrease enterprise risk at individual companies. But the greatest threat to the long-term returns of diversified investors does not come from the failure of individual companies to optimize their own returns, but from the trillions of dollars in social and environmental costs businesses externalize annually. Diversified shareholders do internalize these costs, and the company-first lens of current shareholder engagement cannot address company behavior that undermines long-term, broad economic health. Investors need tools to close this gap.
Four elements are essential to system stewardship: a legal foundation, a clear internal mandate, external mandates, and stewardship practices. The full range of resources we are making available to satisfy each element can be found here.
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