Leverages New Research Examining Momentum behind Investors’
Increased Interest in ESG Issues
BOSTON--(BUSINESS WIRE)--
State Street Corporation (NYSE: STT), one of the world's leading
providers of financial services to institutional investors, today
released a new Vision Focus report on sustainable investing. Entitled
“Sustainable Investing: Positioning for Long-Term Success,” the report
leverages new research by State Street Global Advisors (SSgA), the
investment management business of State Street, to examine the growing
impact of environmental, social and governance (ESG) concerns on the
investment decisions of institutional investors.
World population growth, climate change and a range of other catalysts
are transforming sustainability into “a material issue for companies and
investors alike,” the report states.
“With global business and investing moving toward a more sustainable
model, institutional investors need to position themselves for a future
that may look dramatically different from the past,” said Chris McKnett,
vice president of ESG investing at SSgA. “By taking steps to align
themselves with this trend now, institutional investors may be better
positioned to achieve long-term goals.”
Once viewed as a marginal investing “fad,” ESG investing is gaining
momentum as global macro-trends increasingly point to a “sustainability
crisis” taking place around the world, the report states. “Many
investors have called for more opportunities to incorporate ESG factors
into their portfolios, prompting investment managers to enhance their
product and service offerings.”
The report is a bridge to research findings outlined in a new SSgA
study, scheduled to be released later this year. The 2010 study is an
update to research conducted by SSgA in 2008. While the 2008 study
suggested a growing importance for ESG-related investment
considerations, the new study goes a step further by examining ESG in
bear market periods, and found that, in general, high-scoring ESG
companies suffered less during the 2008-2009 downturn.
In addition, the new research found that the magnitude of protection
enjoyed by companies with strong ESG practices increased at the same
time as the largest market declines occurred.
According to the Vision report, the global financial crisis contributed
to greater awareness of ESG issues by spotlighting the need for “more
stringent corporate governance and disclosure requirements to help
protect the interests of investors.”
“The new emphasis on sustainability is changing the rules of the
institutional investment world,” continued McKnett. “As ESG factors are
increasingly mandated by investors, those companies with favorable ESG
ratings are likely to become the preferred holdings.”
The Vision report reviews the development of ESG investing from the
early focus on exclusionary screening of companies whose products or
services were deemed inconsistent with an investor’s values, to today’s
more proactive approach of incorporating ESG factors into the investment
decision-making process. With more in-depth analysis of ESG data and
ratings, the report states, “Today’s sustainable investor is intent on
identifying companies expected to outperform over the long term based on
their practices of embracing the concept of sustainability in the
operation and management of their enterprises.”
State Street’s Vision Series addresses key trends and developments
impacting the financial services industry. Previous reports have focused
on pensions, exchange traded funds, asset allocation and sovereign
wealth funds. To download a copy of this Vision Focus report or others
in State Street’s Vision series of in-depth reports, please visit www.statestreet.com/vision.
About State Street
State Street Corporation (NYSE: STT) is one of the world's leading
providers of financial services to institutional investors, including
investment management, research and trading, and investment servicing.
With $20.2 trillion in assets under custody and administration and $1.9
trillion in assets under management at September 30, 2010, State Street
operates in 25 countries and more than 100 geographic markets
worldwide. For more information, visit State Street’s website at www.statestreet.com.
The statements and opinions expressed are as of 10/20/2010 and are
subject to change at any time, based on market and other conditions.
State Street cannot guarantee the accuracy or completeness of any
statements or data. These views may not be relied upon as investment
advice or an offer for a particular security.
Source: State Street Corporation
Contact:
State Street Corporation
Marie McGehee, +1-617-664-1898