Shareholder Engagement
Corporate engagement constitutes a fundamental aspect of the SBI’s fiduciary obligations and serves as a mechanism to safeguard and optimize the assets under its management. As long-term investors and stewards of capital, the SBI acknowledges that corporate determinations regarding strategy, capital allocation, governance, shareholder rights, and sustainability factors significantly influence financial performance and long-term investment value.
Accordingly, the SBI pursues sustained and informed dialogue with investee companies to articulate the SBI’s expectations and gain perspective on initiatives designed to promote practices that drive sustainable shareholder returns. By advancing responsible and innovative corporate governance, the SBI acts to reinforce best practices that contribute directly to the achievement of better risk-adjusted returns.
The SBI has a long history of utilizing corporate engagement to enhance corporate disclosure on topics including tobacco, drug pricing, opioids, and methane emissions. The SBI believes that dialogue, understanding, and collaboration are the most effective means of engagement.
In 2025, the SBI retained the services of Segal Marco Advisors to develop a more robust engagement program focused on establishing collaborative, long-term relationships with corporate issuers. Through this collaboration, the SBI will pursue sustained engagements aimed at identifying areas of concern, improving disclosure of long-term risks, and sharing perspectives on effective approaches to address them.
In 2024, members of the Stewardship team, together with an external fixed income manager, initiated an engagement with a large state-owned energy company to discuss governance practices, methane and flaring emissions, and the company’s climate-related disclosures. This was the team’s first engagement undertaken through debt holdings.
During our meeting with management, we focused on the company’s emissions-reduction plans and the actions needed to meet its long-term climate goals. We also shared research indicating that methane-abatement investments could be highly cost-effective and reduce both operational and financial risks.
Management acknowledged the infrastructure challenges contributing to elevated emissions and noted that future capital-allocation decisions will need to balance operational requirements with transition objectives.
The company recently published its first sustainability report and committed to reporting in line with the recommendations of the Task Force on Climate-Related Financial Disclosures and the standards of the International Sustainability Standards Board.
We will continue to monitor the company’s progress and maintain an active dialogue as it advances its transition planning.