State Street Launches New Climate Equity Funds

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    Stockholm (NordSIP) – The 2015 Paris Agreement was one of the main contributors to the emergence of sustainable investments since the Great Recession. By creating a set of mutually agreed goals, the deal provided investors with a range of yardsticks to which environmental investments can be benchmarked.

    Following that trend, State Street Global Advisors launched today the State Street Climate Equity Funds. The new fund range targets Paris-aligned reductions in CO2 emissions by prioritising investments in companies benefiting from low-carbon technologies and those with a strong and comprehensive climate change strategy.

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    Aside from norms based and sectoral exclusions the new range of funds will also apply 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 provide investors with exposure to diversified portfolios of global, US and European equities. European investors will be able to access these funds via a Luxembourg SICAV.

    “Climate change is often referred to as a slow-burning crisis,” said 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 utilizing different climate metrics. The model finds the optimal tradeoff between improving the carbon profile while staying in line with a tracking error target, as well as keeping to country and sector deviation constraints.”

    “From increasing allocation to greener technologies by up to 300% to reducing embedded fossil fuel reserves and brown revenue exposure by up to 90% with the aim to minimize 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,” Arnaud Bruyneel, Head of the Nordics State Street Global Advisors, added.

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    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.
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