State Street Global Advisors
State Street Global Advisors is an international investment management firm with 29 offices globally across the Americas, Asia-Pacific, Europe, and the Middle East and Africa. It joined the Net Zero Asset Managers Initiative on 20 April 2021 and its initial target disclosure was published on 1 May 2022.
Percentage of assets covered by the Net Zero Asset Managers Commitment Statement
14% of total AUM (USD $582.7 billion)
Information on interim target(s) covering the proportion of assets to be managed in line with net zero
Baseline(s):
Target(s):
Portfolio decarbonisation reference target
By 2030, we expect financed1 Scope 1+2 carbon emissions intensity2 in each client portfolio in our Net Zero Target Assets3 (14% of our total portfolio assets as of 12/31/21) to be reduced by 50% relative to a 2019 baseline.
Engagement threshold target
By 2030, we expect 90% of financed emissions1 in carbon-intensive industries4 in the client portfolios in our Net Zero Target Assets3 (14% of our total portfolio as of 12/31/21) to be coming from companies: (i) achieving net zero5, (ii) aligned to net zero6 or (iii) subject to engagement and stewardship actions.
Portfolio coverage target
By 2040, we expect all of our client assets in our Net Zero Target Assets3 (14% of our total portfolio assets as of 12/31/21) invested in carbon-intensive industries4 to be (i) achieving net zero5 or (ii) aligned to net zero6, and we will work with those clients to help them develop net zero guidelines and implement them into their portfolios.
GHG scopes included:
Our emissions reduction target will currently include only Scope 1 and Scope 2 emissions.
Methodology:
Net Zero Investment Framework
Additional information
Proportion of AUM committed:
We have set interim targets that apply to a portion (approximately 14% as of 12/31/21) of our assets under management (“Net Zero Target Assets”). While we believe attention to climate risk is relevant to long-term value, our targets will only be achieved if net zero is important to our clients and they instruct us to achieve that objective in the portfolios we manage for them. We will not depart from client mandates to achieve net zero, force any client to embrace net zero, or sell companies in any index because those companies do not achieve net zero targets. As an index manager, we are long-term shareholders on behalf of our clients and focus on delivering index exposure to those clients.
Further information:
1Financed Emissions are the greenhouse gas (“GHG”) emissions linked to the companies in which we have invested our clients’ assets on an equity or fixed income basis.
2Financed Scope 1+2 carbon emissions are the Scope 1 and Scope 2 GHG emissions linked to the companies in which we have invested our clients’ assets on an equity or fixed income basis. Scope 1 emissions are direct GHG emissions that occur from sources that are controlled or owned by an organization (e.g., emissions associated with fuel combustion in boilers, furnaces, vehicles). Scope 2 emissions are indirect emissions from the generation of purchased energy, such as electricity, steam, heat, or cooling. Carbon emissions intensity measures the absolute emissions of an investment divided by the investment volume in USD, expressed as tonnes of CO2eq/$M invested.
3 Our Net Zero Target Assets are dedicated equity and/or corporate bond portfolios that also meet one of the following criteria: (i) the portfolio is managed pursuant to a climate strategy; (ii) the portfolio is a fund or separately managed account domiciled in Europe; or (iii) the portfolio is a separately managed account domiciled in the US, APAC or Middle East, but only if the client has embraced net zero or a similar climate pledge.
4 SSGA defines carbon-intensive industries as the following Global Industry Classification Standard (GICS) subindustries: Electric Utilities, Integrated Oil &Gas, Multi-Utilities, Steel, Construction Materials, Independent Power Producers & Energy Traders, Oil & Gas Refining & Marketing, Oil & Gas Exploration & Production, Diversified Metals & Mining, Airlines, Commodity Chemicals, Industrial Gases, Aluminum, Oil & Gas Storage & Transportation, Multi-Sector Holdings, Diversified Chemicals, Fertilizers & Agricultural Chemicals, Air Freight & Logistics, Agricultural Products, Environmental & Facilities Services, Coal & Consumable Fuels, Paper Packaging, Railroads, Marine, Automotive Retail, Oil & Gas Drilling, Food Retail, Paper Products, Hotels, Resorts & Cruise Lines, Internet & Direct Marketing Retail, Hypermarkets & Supercenters, Precious Metals & Minerals.
5We consider a company to be achieving net zero if they meet the following definition set by the IIGCC Paris Aligned Investment Initiative (PAII) Net Zero Investment Framework: the company’s current emissions are at/close to 2050 net zero level and they have an investment plan/business model in line with net zero.
6We consider a company to be aligned with net zero if they meet the following five criteria based on the PAII Net Zero Investment Framework: (i) a long term 2050 goal consistent with achieving global net zero, (ii) short- and medium-term emissions reduction target (scope 1, 2 and material scope 3), (iii) current emissions intensity performance relative to targets (scope 1, 2 and material scope 3), (iv) disclosure of scope 1, 2 and material scope 3 emissions, and (v) a quantified plan setting out the measures that will be deployed to deliver GHG targets, proportions of revenues that are green and where relevant increases in green revenues.
Further information in relation to our targets and net zero strategy will be found here.