Initiatives and Engagement

 

Utilizing engagement initiatives to address environmental, social, and governance-related (ESG) issues can lead to positive portfolio and governance outcomes.

In addition to specific engagement strategies the SBI might apply, proxy rights attached to shareholder interests in public companies are also “plan assets” of the SBI and represent a key mechanism for expressing SBI’s positions relating to specific ESG issues.  By taking a leadership role in promoting responsible corporate governance through the proxy voting process, SBI can contribute significantly to implementing ESG best practices which should, in turn, add long-term value to SBI’s investments.

 

The SBI believes that genuine dialogue, understanding, and collaboration are the most effective means of engagement. As part of the Minnesota State Board of Investment's Climate Roadmap presented to the Board in May 2024, the SBI issued a Request for Proposal for an external partner to support direct engagements with companies. In July 2025, the SBI hired Segal Marco Advisors to develop a strategic engagement plan. This included recommending material issues to prioritize, identifying best practices to share with companies to manage risks and opportunities, assisting in selection of companies to engage with, and developing long-term engagement plans. 

In the last several years, the SBI has engaged on various initiatives with companies in which the SBI holds an interest in its investment portfolios. For example:

  • In 2024, the SBI began a new engagement with PEMEX, the Mexican state-owned petroleum company. This is the SBI's first experience with a company through the ownership of company in its efforts to establish a strong governance framework, reduce greenhouse gas emissions related to flaring and methane venting, and enhance corporate disclosures.
     
  • In 2022, the SBI filed shareholder proposals at several Midwest companies including, Perficient, R1-RCM, and OptimizeRx. The SBI withdrew each of these proposals after the companies improved their disclosure and recruitment policies related to board diversity. 
     
  • In 2020 the SBI began engagement with Hess Corporation and in 2021 started leading and engagement with Marathon Oil. These engagements focused on the disclosure of targets to reduce flaring intensity and methane emissions intensity.