To help investors build more climate-resilient portfolios, our team is designing the next generation of climate change solutions.
See how the State Street Climate ESG International Equity Fund is constructed.
Investors are increasingly aware of the potential systemic risks climate change poses to the financial system. These climate change risks impact almost all segments and industries – not just the obvious polluters. However, with climate risk comes tremendous opportunity with the increasing attractiveness of renewable energy driving investment to fossil fuel alternatives.
The State Street Climate ESG International Equity Fund (the Fund) offers global equity exposure, while building climate change thematically into the portfolio. At the same time, the Fund seeks increased exposure to companies that score well on our Responsibility Factor (R-Factor™), and screens out companies with ESG risk and reputational issues.
Designed for Australian investors, the Fund is characterised by the following:
Reallocates capital away from companies with high carbon emissions and brown revenues, and increases exposure to new energy, and green companies.
To help build a more climate-resilient portfolio, the Fund also increases exposure to companies working proactively to minimise their exposure to actual or expected physical, economic, and regulatory impacts of climate change.
The Fund aims to align with the most ambitious goals stemming from the landmark 2015 Paris Agreement — including limiting climate change to the 2° Celsius warming scenario over post-industrial levels2.
Excludes companies involved in activities related to: controversial weapons, thermal coal, tobacco, severe ESG controversies, and violations of the UN Global Compact. Learn more about how and why we apply screens.
Provides an increased exposure to sustainable companies that are highly rated by our ESG scoring system (R-Factor™).
Seeks to achieve the most efficient trade-off between climate objectives, R-Factor™ improvement, tracking error and diversification, while achieving long-term returns broadly in line with the MSCI World ex-Australia Index.
Our reporting helps clients understand how the Fund performs against investment objectives, and climate focused objectives. The report can potentially help clients meet their climate reporting obligations to beneficiaries, trustees, and other stakeholders.
A leader in ESG investing for 30+ years, we launched our first ESG mandate in 1985 and were a pioneer in low-carbon investing.
We're proud of our environmental sustainability efforts. From reducing our use of natural resources to helping our employees make more informed choices, together we’ve helped decrease our environmental footprint.
The Other Climate Risk Investors Need to Talk About
1 The above targets are as of 1 June 2020 and are subject to change as both the science and the data behind climate investing evolves. Targets are relative to the MSCI World ex-Australia Index.
2 IPCC (Intergovernmental Panel on Climate Change). 2014. “IPCC Fifth Assessment Report: Climate Change 2014.” https://www.ipcc.ch/report/ar5/.
3 Source: State Street Global Advisors, Principles for Responsible Investment. Rated A+ for Listed Equity Active Ownership (Asset Stewardship) and Strategy and Governance. Scores for FY2019, released 2020.
4 Source: State Street Global Advisors, as at 30 June 2021
5 Principles for Responsible Investment (PRI), Asset Owner Manager Selection Guide, 2018
Investing involves risk including the risk of loss of principal. Equity securities may fluctuate in value in response to
the activities of individual companies and general market and economic conditions. Investing in foreign domiciled securities may involve risk of capital loss from unfavourable fluctuation in currency values, withholding taxes, from differences in generally accepted accounting principles or from economic or political instability in other nations.
The returns on a portfolio of securities which exclude companies that do not meet the portfolio's specified ESG criteria may trail the returns on a portfolio of securities which include such companies. A portfolio's ESG criteria may result in the portfolio investing in industry sectors or securities which underperform the market as a whole.
Responsible-Factor (R-Factor TM) scoring is designed by State Street to reflect certain ESG characteristics and does not represent investment performance. Results generated out of the scoring model is based on sustainability and corporate governance dimensions of a scored entity.
Exp. Date: 31/07/2022