State Street Releases New ESG Thought Leadership and a ‘Values Discovery Tool’ to Help Advisors Reframe the ESG Conversat...
October 02 2018 - 10:00AM
Business Wire
State Street Global Advisors, the asset management business of
State Street Corporation (NYSE: STT), today released a new report,
detailing how advisors can overcome the key challenges slowing the
adoption of environmental, social and governance (ESG) investment
strategies. To coincide with the release of the report,
State Street’s Center for Applied Research (CAR) released a new
values discovery benchmarking tool that is designed to help gauge
an individual investor’s level of interest and commitment to
various ESG issues.
The report, Aim Higher: Helping Investors Move from Ambition
to Action with ESG Investment Approaches, reveals 59 percent1
of all individual investors believe that it is important to invest
in companies that are trying to make the world better for the next
generation, and 51 percent2 of all investors who haven’t
incorporated ESG strategies into their portfolio want their advisor
to speak to them about ESG investing.
“Advisors are uniquely positioned to be a change agent in
mainstreaming ESG investing,” said Brie Williams, head of Practice
Management at State Street Global Advisors. “Growing investor
demand for ESG strategies has sparked a surge in product
development and fueled the need for better guidance and
advice.”
With 50 percent3 of ESG investors planning to increase the
degree to which they incorporate ESG in their portfolio in the next
three years, and 23 percent4 of non-ESG investors planning to add
ESG, the report provides advisors with a clear path for overcoming
the following three hurdles:
- Confusion around investment
performance parity: ESG is not just a “do good” mentality60% of
ESG investors cite lower volatility and 54% cite lower downside
risk as important reasons for incorporating ESG into their
investment process.5 This sentiment is backed by sensible economic
intuition when considered from a risk management perspective, as
investments that ignore ESG factors miss capturing information
beyond financial statements that could indicate higher risk
exposure.
- The need for transparency: Better
data for clearer outcomesSignificant progress has been made in
the number of companies disclosing ESG data and the push for
standardization of reporting across companies will help provide
even greater transparency. In the meantime, improved reporting can
help advisors be proactive with their communications and more
responsive to specific client inquiries.
- Choice overload: Investors need help
defining goals and choosing solutionsInvestors’ need for advice
in navigating a large and growing set of ESG options presents an
opportunity for advisors to provide value in a meaningful way.
Carefully defining objectives to identify the right ESG strategies
and investment vehicles will help clients achieve success in more
ways.
To help advance a dialogue about ESG, State Street’s CAR team
developed an online values discovery questionnaire intended to
measure an individual investor’s level of interest and overall
commitment to various ESG issue groups and provide a benchmark
against other individual investors based on their wealth and
region. The tool is based on an online questionnaire featuring
fifteen questions on ESG issues and investments that will help
investors and their advisors better understand what is most
important to clients beyond their financial goals.
“Over the past several years, interest in ESG strategies have
grown at a rapid pace, but like anything that grows too fast, it
can inevitably lead to information overload and confusion,” says
Mirtha Kastrapeli, global head of research for the Center for
Applied Research. “Our aim with this tool is to help investors cut
through the noise and determine what issues are most important to
them. Personally we believe that having this clarity will help
drive new and more productive conversations around ESG.”
A copy of Aim Higher can be downloaded here and to check
out State Street’s Value Discovery Tool visit the page here.
About State StreetState Street Corporation (NYSE: STT) is
one of the world's leading providers of financial services to
institutional investors, including investment servicing, investment
management and investment research and trading. With $33.90
trillion in assets under custody and administration and $2.70
trillion* in assets under management as of June 30, 2018, State
Street operates in more than 100 geographic markets worldwide,
including the US, Canada, Europe, the Middle East and Asia. For
more information, visit State Street’s website at
www.statestreet.com.
*This figure is presented as of June 30, 2018 and includes
approximately $53 billion of assets with respect to SPDR products
for which State Street Global Advisors Funds Distributors, LLC
(SSGA FD) acts solely as the marketing agent. SSGA FD and State
Street Global Advisors are affiliated.
©2018 State Street Corporation - All Rights Reserved
The whole or any part of this report may not be reproduced,
copied or transmitted, or any of its contents disclosed to third
parties without State Street’s express written consent.
Investing involves risk including the risk of loss of
principal.
The material presented herein is for informational purposes
only. The views expressed herein are subject to change based on
market and other conditions and factors. The opinions expressed
herein reflect general perspectives and information and are not
tailored to specific requirements, circumstances and / or
investment philosophies.
Expiration Date: September 30, 2019©2018 State Street
Corporation - All Rights ReservedState Street Corporation, One
Lincoln St, Boston MA 02111
2259052.1.1.GBL.RTL
1 State Street Global Advisors, Transformative Power of
Philanthropy, 20162 State Street Center for Applied Research Survey
of Retail Investors, December 20163 ibid4 ibid5 ibid
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version on businesswire.com: https://www.businesswire.com/news/home/20181002005652/en/
State StreetBrendan Paul, +1
617-662-2903BPaul2@StateStreet.com@StateStreet
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