Building a Sustainable Future

Environmental, social, and governance (ESG) investing is top of mind for investors globally. Driven by new initiatives, expanding opportunities, and investors’ own sustainability goals, commitment to ESG initiatives continue to build.

As members of the Net Zero Asset Managers initiative, we are proud to announce our interim targets for 2030 to ensure our portfolios reach net-zero greenhouse gas emissions by 2050 or sooner.

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Your Target: Net Zero

How can you build a future-proof portfolio and implement a Net Zero transition strategy? We outline the key steps you can take to accomplish an effective transition.

Our Target: Net Zero

As members of the Net Zero Asset Managers initiative, we are proud to announce our interim targets for 2030, to ensure our portfolios reach net-zero greenhouse gas emissions by 2050 or sooner.

Target-Setting Methodologies

In an effort to guide investors with their decarbonization journey, here is an overview of the three main methodologies available in the market.

Defining Your ESG Goals

Amid environmental and societal challenges, and incoming ESG regulations, how can investors build long-term resilience in their portfolios while benefiting from new investment opportunities?

We advise that investors define and develop specific ESG investment objectives and goals, based on their vision, mission and investment goals. Common investor objectives can include alpha generation, risk mitigation, adhering to ESG regulations or aligning the portfolio to the investor’s values. Investment principles can be developed based on these objectives, which will form the ESG investment strategy.

ESG Investment Strategies

Investors can meet their specific ESG objectives through a range of investment strategies.

Climate Investing

This is a thematic investment approach that aims to align portfolios with the transition to a low carbon economy and a reduction in global warming to well below 2°C.

For investors seeking to align portfolios with the Paris Agreement goals and the transition to a low-carbon economy, we offer a variety of options across equities and fixed income. Our Sustainable Climate Strategies allow investors to benefit from both mitigation of current and future emissions, and adaptation to embedded climate risks.

Screening

Negative screening excludes specific companies, sectors or countries based on ESG factors and/or an investor’s values-based ideals. The benefits include mitigating reputational risk and enabling investors to avoid allocating funds to companies or sectors that conflict with their beliefs.

With over 40 years’ experience in developing screened approaches across equities and fixed income, we offer clients a tailored way to express their values or risk mitigation preferences in their portfolios.

Data Analytics

We built a transparent, multi-source data architecture to help investors better understand their ESG exposures, takeaction to achieve their investment goals and monitor results.

ESG: Central to Our Investment Philosophy

At State Street, our mission is to invest responsibly to enable economic prosperity and social progress. We believe that identifying and systematically incorporating material ESG issues is integral to our role as fiduciaries of our clients’ capital. As one of the world’s largest asset managers, we can partner with clients to achieve their ESG objectives through our global expertise in ESG research, investment strategy and data analytics, leveraging our top rated* ESG capabilities.

Through strong engagement, voting and thought leadership, we have seen companies respond to our calls to action to enhance diversity at the board level, strengthen board leadership and improve disclosure on their sustainability practices.

Further information on our stewardship approach can be found in our Annual Stewardship Report.

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This information is for informational purposes only, not to be construed as investment advice or a recommendation or offer to buy or sell any security. Investors should always obtain and read an up-to-date investment services description or prospectus before deciding whether to appoint an investment manager or to invest in a fund. Any views expressed herein are those of the author(s), are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may make different investment decisions for different clients. There are no guarantees regarding the achievement of investment objectives, target returns, portfolio construction, allocations or measurements such as alpha, tracking error, stock weightings and other information ratios. The views and strategies described may not be suitable for all investors. SSGA does not provide tax or legal advice. Prospective investors should consult with a tax or legal advisor before making any investment decision. Investing entails risks and there can be no assurance that SSGA will achieve profits or avoid incurring losses.

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