State Street’s purpose is to help create better outcomes for the world’s investors and the people they serve. Fulfilling that purpose is inseparable from focusing on investing over the long-term.
State Street has a leading position in two businesses, investment management and investment servicing. In the first, we manage portfolios for institutional clients. In the second, we provide services for investors such as risk analytics, trading technology, custody, and fund administration. In both cases, our clients are long-term investors. Therefore, we think about running our firm with a long-term lens in three categories:
- How we invest
- How we service investors
- How we manage our firm
Enhancing stewardship and engagement to advance diversity and move to Net Zero
As an investor, we utilize innovative tools to create portfolio strategies for sustainable investment. State Street Global Advisors (SSGA) also acts as a steward, engaging with company management and boards and casting proxy votes. Our stewardship is a critical tool and in 2022 we are building on our engagement to address climate risk and diversity on boards and in the workforce.
At SSGA, we have made a commitment to Net Zero. As part of this commitment, SSGA partners with our asset-owning clients on decarbonization goals, sets interim targets for specific assets under management (AUM) that will be managed in line with net zero, and keeps track of its progress with an eye to achieving one hundred percent net zero AUM by 2050. Net Zero is an ambitious and important goal for SSGA and this April, SSGA will report its progress for the first time since announcing that commitment.
New ESG risks analytics platform helps clients measure, manage, and report risks
As a service provider, we help investors understand, measure, and manage sustainability risks relating to climate change and other environmental, social, and governance (ESG) concerns. Last year, for example, we introduced our ESG risks analytics platform to enable clients to address new global reporting requirements, including the Task Force on Climate-related Financial Disclosures (TCFD) and the EU Sustainable Finance Disclosure Requirements (SFDR), and to measure their carbon footprint and intensity.
Corporate-wide initiatives include 10 State Street Actions aimed at reducing racism and inequality
As a global corporation with more than 39,000 employees we pursue operational initiatives to address the spectrum of sustainability issues. That includes everything from acquiring meaningful carbon offsets—which we done for over a decade—to obtaining renewable energy credits, to geographic mapping of our organization’s environmental impact. Disclosure is critical to sustainable finance and State Street has adopted and endorsed the disclosure framework created by the TCFD. We regularly engage with groups working to improve transparency such as the International Sustainability Standards Board (ISSB) and regulators including the SEC. In 2020, we introduced 10 State Street Actions aimed at reducing racism and inequality with measurable goals and reporting on progress towards those goals. Specific actions range from improving Black and Latinx employee representation, talent development, supplier spend and Board representation – to conducting anti-racism conversations and training and increasing civic engagement and reflection.
The recent confluence of crises—the COVID-19 pandemic, social protests, and America’s reckoning with an often-painful racial history—has only reinforced our belief that a comprehensive focus on the long-term is essential. By bringing long-term thinking to the fore we are increasing the value of our business and building sustainable, shared prosperity for future generations.