State Street Global Advisors will use its proxy voting power against companies that are falling behind on ESG, says the bank’s president.

President and CEO Cyrus Taraporevala said in an annual letter to corporate boards that ESG “is no longer an option for long-term strategy.” He added, “this year we are prepared to use our proxy voting power to ensure companies are identifying material ESG issues and incorporating the implications into their long-term strategy. Beginning this proxy season, we will take appropriate voting action against board members at companies in the S&P 500, FTSE 350, ASX 100, TOPIX 100, DAC 30, and CAC 40 indices that are laggards based on their R-Factor scores and that cannot articulate how they plan to improve their score”.