Climate Bond Investing Risk and Opportunity

We believe ESG investing involves the assessment of material environmental, social and governance opportunities or risks during the investment process and that climate change, in particular, presents one of the largest risks, but also, one of the greatest investment opportunities for bond investors.

Reduce the Carbon, Fund the Transition

Our range of highly effective solutions to help bond investors make a material improvement to their carbon profile, while aiming to achieve the returns they need.

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Our Commitment to ESG

$470B+

ESG Assets Managed by State Street Global Advisors ¹

20+

Dedicated Specialists for ESG Data and Research

45+

Fixed Income Responsible Investment Solutions ²

Further Insights

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Strategy Profiles

Imagine if you could improve your bond portfolios carbon profile, reducing climate risk while keeping risk and return characteristics broadly in place.

This is the rationale behind our Sustainable Climate Bond Strategy, which targets Paris aligned reductions in carbon emissions, fossil fuel and brown revenues exposure, and reallocates capital towards companies benefiting from low carbon technologies. The Strategy also increases exposure to green bonds and those bond issuers investing in the solutions needed to achieve net zero by 2050.

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Climate change poses a significant systemic risk within investment portfolios. However, with risk comes opportunity. The future won't wait. Start your transition today.

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Footnotes

¹ As of March 31, 2023, State Street Global Advisors manages approximately $475 billion in ESG assets. Estimated and unaudited ESG AUM as of March 31, 2023 for client mandates in the following categories specified in the SSGA ESG Account Identification Policy:

Negative ESG Screen: A “Negative ESG Screen” (also known as an exclusionary screen) is a screen incorporated into the investment strategy utilized for the management of a portfolio that results in the exclusion from the portfolio of securities of issuers (whether part of a certain sector or industry), where the exclusion of such securities is based on the intent to eliminate from the portfolio securities that fail to satisfy specific ESG criteria. Negative ESG Screens include but are not limited to SSGA Point of View (“POV”) screens, norms-based screens, Socially Responsible Investing (SRI) screens, and screens provided by other third-parties.
Positive ESG Screen: A “Positive ESG Screen” is a screen incorporated into the investment strategy utilized for the management of a portfolio that intentionally includes securities of issuers identified as having positive ESG performance (including positive performance of sub-components of ESG such as environmental, climate or social characteristics) relative to the issuer’s industry or sector peers. Positive ESG Screens include but are not limited to targeting an overall improvement of a portfolio’s ESG profile as compared to a benchmark or stated investment guideline, measured in ESG scores, or investing only in issuers within an industry or sector that score higher within that industry or sector than the issuer’s peers.
Third Party ESG Index: An index is deemed to be a “Third Party ESG Index” if the index methodology incorporates ESG factors or characteristics that are utilized by the third-party index provider to determine which securities are included as index constituents.

² Including: Climate Thematic, Negative ESG Risk Screening, Best-in-Class, Green Bonds, and Bespoke ESG Strategies

Disclosures

For institutional / professional investors use only.

Marketing Communication

State Street Global Advisors Worldwide Entities.

Investing involves risk including the risk of loss of principal.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.

All information is from SSGA unless otherwise noted and has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

The information contained in this communication is not a research recommendation or ‘investment research’ and is classified as a ‘Marketing Communication’ in accordance with the Markets in Financial Instruments Directive (2014/65/EU) or applicable Swiss regulation. This means that this marketing communication (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research (b) is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This communication is directed at professional clients (this includes eligible counterparties as defined by the appropriate EU regulator) who are deemed both knowledgeable and experienced in matters relating to investments. The products and services to which this communication relates are only available to such persons and persons of any other description (including retail clients) should not rely on this communication.

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.

Bonds generally present less short-term risk and volatility than stocks, but contain interest rate risk (as interest rates raise, bond prices usually fall); issuer default risk; issuer credit risk; liquidity risk; and inflation risk. These effects are usually pronounced for longer-term securities. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.

This document provides summary information regarding the Strategy. This document should be read in conjunction with the Strategy’s Disclosure Document, which is available from SSGA. The Strategy Disclosure Document contains important information about the Strategy, including a description of a number of risks.

5732545.1.1.EMEA.INST
Expiry: 30/06/2024