Insights

Climate Investing Grows Up

Portfolio construction strategies for climate-related risk management and the transition to a low-carbon economy

Caitlin McSherry

AVP, Asset Stewardship

26 February 2020

In early 2019 we noted that climate investing was moving from conversation to action among institutional investors, driven both by regulatory pressure and by a growing desire for organizations to align their portfolios with broader priorities. For institutional investors ready to take action, there are a variety of possible approaches to addressing climate change in a portfolio. Investors can begin by asking themselves four core questions:

What are the risks and opportunities posed by climate change in my portfolio?
What data is available to quantify these risks and opportunities?
What portfolio design/construction approaches are available for investors integrating
climate considerations?
What are the performance implications of building a climate-aware portfolio?

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Disclosures

United States: State Street Global Advisors, 1 Iron Street, Boston, MA 02210

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 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.

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.

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EXP: February 26, 2021

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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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