State Street Global Advisors adds Climate Equity Funds
State Street Global Advisors has launched a new range of funds, State Street Climate Equity Funds, for investors looking to reduce climate risk in their portfolios.
The new fund range is targeting Paris-aligned reductions in carbon emissions by reallocating capital towards companies benefiting from low-carbon technologies and those with a strong and comprehensive climate change strategy.
The funds will employ a set of norms based and business involvement exclusions, as well as five different climate metrics to deliver on investors’ climate objectives, namely: carbon intensity, embedded fossil fuel reserves emissions, percentage of brown revenue, percentage of green revenue and adaptation score on climate change preparedness.
The funds offer cost-efficient access to diversified global, US and European equity exposures. For European investors, these funds are accessible via a Luxembourg SICAV.
“Climate change is often referred to as a slow-burning crisis,” says Carlo Funk, EMEA head of ESG Investment Strategy for State Street Global Advisors. “The growing awareness and concern will further drive the transition to a low-carbon economy and the time to act is now. We are therefore very excited to launch a strategy that can significantly improve the carbon profiles of client portfolios utilising different climate metrics. The model finds the optimal trade-off between improving the carbon profile while staying in line with a tracking error target, as well as keeping to country and sector deviation constraints.”
Alistair Byrne, head of Pensions and Retirement Strategy, EMEA, adds: “From increasing allocation to greener technologies by up to 300 percent, to reducing embedded fossil fuel reserves and brown revenue exposure by up to 90 per cent with the aim to minimise the carbon intensity, these funds, as a core exposure for many investors, can truly help them move the dial on their journey in building sustainable portfolios for the future."