ESG Investing: New Opportunities to Drive Value
In a world of change and uncertainty, investors need to consider any factor that has a material impact on long-term value creation. Decades of investing experience positions us to help investors use a variety of environmental, social, and governance (ESG) investing tools to meet their needs.
Defining Your ESG Goals
We advise that investors define and develop specific ESG investment objectives and goals, based on their vision, mission, and investment goals. Common objectives can include alpha generation, risk mitigation, responding to new ESG regulations, aligning investments to their preferences, or meeting individual client investment goals. Investment principles can be developed based on these objectives, which will form the ESG investment strategy.
ESG 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 may help investors benefit from both mitigation of current and future emissions, and adaptation to embedded climate risks.
Negative screening excludes specific companies, sectors or countries based on ESG factors and/or an investor’s preferences. The benefits include mitigating reputational risk and enabling investors to avoid allocating funds to companies or sectors that conflict with their beliefs.
With decades of experience in developing screened approaches across equities and fixed income, we offer clients a tailored way to pursue their goals or risk mitigation preferences in their portfolios.
Best in Class
This approach focuses on investment in sectors and companies that we believe are leaders in terms of meeting certain ESG criteria relative to investment universes and/or industry peers.
Where appropriate, we aim to invest in sectors and companies, that are leaders in this way using our internal R-FactorTM ESG rating system and other ESG data sources.
ESG Integration
Our active portfolio managers may integrate ESG signals and factors where consistent with a strategy’s investment objective, in efforts to mitigate risk and identify opportunities for long-term performance potential.
Analytics & Insights
Our investment team draws upon our vast capabilities, partnerships, and data sets to assess companies on financially material, decision-useful information. From climate to governance structures and business involvement activities, our commitment to rigorous analysis helps investors gain insights.
Stewardship & Value
Our pragmatic and widely respected asset stewardship program is focused on driving long-term value creation. Our team of experts accomplish this through:
Our Investment Philosophy
As part of State Street Corporation, whose mission is to create better outcomes for the world’s investors and the people they serve, we invest responsibly to enable economic prosperity and social progress. As a fiduciary, we have an obligation to put our clients’ long-term interests first.
To be effective in fulfilling this obligation, we need to consider all factors that have a material impact on long-term value creation. This includes material ESG factors, which we believe can affect the performance of investments to varying degrees across companies, sectors, regions, asset classes, and through time.
Your Target: Net Zero
We outline the key steps you can take to accomplish an effective transition.