Capabilities

Climate Integration with Clear Intention

The new Global Climate Transition Equity Strategy is a forward-thinking portfolio that is managed by our Fundamental Equity team. Recognized as one of Barron's Top Fund Families in 2024, the team is powered by proprietary research and a distinctive drive to gain a true picture of companies' climate exposures.

Strategy Overview

Lori Heinel, Global Chief Investment Officer at State Street Global Advisors, introduces the new Global Climate Transition Equity Strategy.

Video (01:08)

Our Approach

State Street Global Advisors harnesses the Fundamental Equity team’s 20 years of average experience, competitive track record, expertise, and established processes that have the potential to uncover insights before the market does, and applies them to a new Strategy that deeply focuses on climate risks and opportunities.

For investors seeking to integrate climate-related criteria into their portfolios, this Strategy offers an approach that is differentiated by:

A proprietary climate scorecard generated from years of research and analysis
High conviction in a select number of names
An unwavering focus on quality issuers with durable growth and attractive valuations

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The Strategy contains 30-40 names. Our culture of comprehensive research allows us to have the confidence to hold a select group of companies that have a reliable plan for meeting their climate targets, and that pass our rigorous standards for quality, growth and value. With the Strategy's low turnover, we invest in companies as owners—not traders—and we maintain a long-term view.

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Our Investment Process

Weightings Are Based on Proprietary Scoring

Our Confidence Quotient (CQ) framework for assessing quality and durable growth is proprietary and time-tested. CQ adds discipline and rigor to our process – which we believe is essential for repeatability of results. The CQ is divided into five sub-measures: Market Position, Management, Financial Condition, Transparency and Fundamental Momentum. Sustainable and climate transition-related metrics and insights are fully integrated into our CQ process.

Global Climate Transition Strategy Research Process

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Source: State Street Global Advisors, as of March 31, 2024.

Our Experience

Putting in the Work to Find Risks and Opportunities

The global climate transition will include both risks and opportunities. Some investors may want to mitigate climate risks for a number of reasons, such as regulatory headwinds, concern over certain companies’ reputational risks, and costly operational changes related to climate. On the flip side, the increased use of renewable energy and the rising attention to extreme weather may have created opportunities for companies that can reduce emissions and help their customers do the same.

Sources of Energy Change

(Estimates of the Future Energy Trajectory from the IEA)

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In this context, we partner with clients to help them prepare their portfolios for an expected global climate transition. At State Street Global Advisors, estimated and unaudited sustainable assets under management were $715 billion as of March 31, 2024.

Leadership Team

Hiring a fundamental active manager involves a belief in the people as much as the process. Our impressive performance reflects the caliber and stability of our team - and our shared commitment to our fundamental, high-conviction investment philosophy.

Michael J Solecki, CFA

CIO, Fundamental Equity

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Paul Nestro, CFA

Director of Research

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Latest Climate Research

Three Climate-Transition Stock Stories

Air Products, Saint Gobain, and Standard Chartered are all well-positioned to benefit from the climate-transition actions that companies and countries around the world are taking.

A Fundamental Approach to Climate Risk Assessment

Climate-related risks can lead to unexpected value erosion. The Active Fundamental Equity team discusses the integration of climate risks into fundamental analysis.

Investing in Long-Term Growth

This article takes a close look at the importance — and the mechanics — of carbon capture in achieving net zero targets by 2050.

Five Reasons to Invest with the Fundamental Growth and Core Equity Team

The Fundamental Growth and Core Equity (FGC) team at State Street Global Advisors takes an active, concentrated, high-conviction approach to equity investing.

Active and Index Based Climate Strategies

A core, index-based climate strategy, combined with a satellite, active-oriented, high-conviction climate strategy, can demonstrate alpha and diversification benefits while controlling tracking error.

Contact us about your climate integration goals.

Disclosure

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Information Classification: General Access

Marketing communication.

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This communication is directed at professional clients (this includes eligible counterparties as defined by the appropriate EU regulator) who are deemed both knowledgeable and experienced in matters relating to investments. The products and services to which this communication relates are only available to such persons and persons of any other description (including retail clients) should not rely on this communication.

Please note that any such statements are not guarantees of any future performance, and actual results or developments may differ materially from those projected.

Investing involves risk including the risk of loss of principal.

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.

All information is from SSGA unless otherwise noted and 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 and it should not be relied on as such.

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.

The returns on a portfolio of securities which exclude companies that do not meet the portfolio’s specified ESG criteria may trail the returns on a portfolio of securities which include such companies. A portfolio’s ESG criteria may result in the portfolio investing in industry sectors or securities which underperform the market as a whole.

A “quality” style of investing emphasizes companies with high returns, stable earnings, and low financial leverage. This style of investing is subject to the risk that the past performance of these companies does not continue or that the returns on “quality” equity securities are less than returns on other styles of investing or the overall stock market.”

Actively managed funds do not seek to replicate the performance of a specified index. The Active Fundamental Climate Transition Equity Strategy is actively managed and may underperform its benchmarks. An investment in the Strategy is not appropriate for all investors and is not intended to be a complete investment program. Investing in the Strategy involves risks, including the risk that investors may receive little or no return on the investment or that investors may lose part or even all of the investment.

Estimated and unaudited SSGA ESG assets under management as of March 31, 2024, as calculated by SSGA for ESG Accounts. SSGA defines an “ESG Account” as a client account (i.e., fund or separately managed account managed by SSGA) that utilizes an investment strategy that falls into one of the following three categories, which are not mutually exclusive:

Negative ESG Screen, as defined below
Positive ESG Screen, as defined below
Third-Party ESG Index, as defined below

1. Negative ESG Screen: A “Negative ESG Screen” (also known as an exclusionary screen) is a screen incorporated into the investment strategy utilized for the management of a portfolio that results in the exclusion from the portfolio of securities of issuers that fail to satisfy certain ESG criteria (e.g., because the issuers comprise part of a sector or industry). Negative ESG Screens include but are not limited to SSGA Point of View (“POV”) screens, norms-based screens, Socially Responsible Investing (SRI) screens, and screens provided by other third parties (including client-directed screens). Where a client’s investment agreement and/or investment guidelines specify, or the client otherwise communicates to SSGA that the application of a negative screen is to satisfy a purpose other than ESG (e.g., diversification), such screens do not qualify as a Negative ESG Screen.

2. Positive ESG Screen: A “Positive ESG Screen” is a screen incorporated into the investment strategy utilized for the management of a portfolio that intentionally includes securities of issuers identified as having positive ESG characteristics (including positive characteristics of sub-components of ESG such as environmental, climate or social characteristics) relative to the issuer’s industry or sector peers. Positive ESG Screens include but are not limited to targeting an overall improvement of a portfolio’s ESG profile as compared to a benchmark or stated investment guideline, measured by an ESG score or an ESG metric or investing only in issuers within an industry or sector that score higher within that industry or sector than the issuer’s peers.

3. Third-Party ESG Index: An index-tracking client account qualifies as an ESG Account if it tracks a Third-Party ESG Index. An index is deemed to be a “Third-Party ESG Index” if the index methodology incorporates ESG factors or characteristics that are utilized by the third-party index provider to determine which securities are included as index constituents. A client account that utilizes a Third-Party ESG Index as a reference benchmark for performance or reporting purposes, but does not seek to track such index as an investment strategy, does not qualify as an ESG Account unless it meets at least one of the first two prongs of the definition of “ESG Account” set forth above.

The methodology used by SSGA to identify ESG AUM may differ from the methodology used under certain classification and disclosure regulatory regimes. SSGA’s ESG AUM may include AUM of client accounts for which a negative screen is applied at the request of the client for regulatory or other purposes, which may not be disclosed to SSGA, that SSGA believes results in the exclusion from the client’s portfolio of securities based on ESG criteria.”