Discover the Benefits of Sustainable Climate Investing
We believe climate change is one of the biggest risks in investment portfolios today. These risks impact almost all segments and industries – not just the obvious polluters.
However, with climate risk comes tremendous investment opportunity as the economy reworks against the impact of climate change. Read on to discover how you can transform your equity portfolio to lose the carbon and keep the returns.
The State Street Sustainable Climate Equity Fund is a long-only investment approach that achieves results through a powerful mix of mitigation of current impacts and adaptation to future climate risks. It offers global equity exposure, while effectively targeting climate change.
Designed from the ground up to create client portfolios that target reductions in current and future carbon emissions, increase exposure to green revenues and increase resiliency to the physical risks posed by climate change.
We designed the Fund to meet investors' needs in terms of climate priorities, desired benchmarks, tracking-error budget and sustainability considerations.
Delivers Across the Board
1. Employs Mitigation and Adaptation
To target net carbon emission reductions in the portfolio, the Fund reallocates capital away from companies with high current and embedded carbon emissions and brown revenues to companies that generate green revenues from low-carbon technology.
In addition to this focus on mitigating the drivers of climate change, the Fund also increases exposure to companies that are actively adapting to the actual or expected future effects of global warming and other environmental changes, helping investors to build more climate-resilient portfolios in the process.
Source: SSGA, as of September 2020.
2. Aligns with the Paris Agreement
The Fund is aligned with the goals stemming from the landmark 2015 Paris Agreement — including limiting climate change to the 2° Celsius warming scenario over the 21st century. It's designed for investors who wish to prepare their portfolios for the transition to a low-carbon economy, in a scalable and risk-aware way. It's available now to meet those needs.
3. Leverages Multiple Data Sources
Given the multifaceted objectives of the Fund, our framework integrates data from leading providers: S&P Trucost (carbon emission intensity, fossil fuel reserves and brown revenues), FTSE Russell (green revenues) and ISS ESG (adaptation). The selected data helps isolate with precision the climate parameters we target.
Combating Climate Change
Download our infographic to explore some of the latest facts about climate change and how our Sustainable Climate Equity Funds help you transform your portfolio's carbon portfolio, addressing climate risk and positioning your portfolio for the transition to the coming low-carbon economy.
Index managers have broadened their toolkits and are able to offer portfolios that no longer just capture the wider market but that have specific objectives, such as
efficiently incorporating ESG criteria.
The COVID-19 pandemic has shown the power of governments to address urgent challenges. Across the world, countries have implemented unprecedented fiscal
measures in response to the crisis. This shows the power of governments to implement necessary change to ensure a sustainable and resilient future.
The recommendations from the European Commission’s Technical Expert Group (TEG) on sustainable finance and the Task Force on Climate-related Financial Disclosures (TCFD) have led to several approaches which are currently used in the market place to assess carbon emissions and calculate company and portfolio-level carbon footprint.
Our Sustainable Climate Equity Funds are part of a suite of highly eﬀective solutions that can quickly help you address climate risk and position your portfolio for the transition to the coming low-carbon economy.
Find out more about our Low-Carbon Corporate Bond Strategy, which offers fully customizable corporate bond exposure with a client-selected carbon reduction target range, or the Low-Carbon Equity Framework that allows clients to select their preferred carbon-reduction objective or targeted tracking error.
For questions or for further information about the State Street Global Advisors ESG Investment Solutions, email us at SSGA_InsightsEMEA@ssga.com
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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.
Performance quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted.
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