State Street announced a strategic engagement with S&P Global Trucost that brings together State Street’s newly announced ESG Risk Analytics and Reporting capabilities and Trucost’s highly regarded climate data and analytics. The agreement will allow State Street to overlay Trucost’s data intelligence on the risks and opportunities of climate change to build on State Street’s existing client-focused ESG services, offering available intelligence solutions to its clients holding assets totaling more than US$40 trillion.
As a result of this engagement, State Street will offer its clients the opportunity to access Trucost environmental data through the reporting and analytics capabilities of State Street’s platforms. This functionality allows clients to access carbon footprint and other environmental data mapped to their portfolios, as well as increasingly influential Taskforce on Climate-related Financial Disclosure (TCFD) reporting features, applying Trucost’s Carbon Earnings at Risk, Paris Alignment, and Physical Risk data intelligence. By partnering with State Street, Trucost will be able to more deeply integrate its climate data intelligence into clients’ decision making and reporting.
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“This partnership furthers our commitment to offer clients a full complement of ESG analytics and reporting capabilities. Our ESG solutions, coupled with Trucost’s renowned climate data resources, allow State Street to deliver clients the critical data required to help them meet challenging global ESG regulatory guidelines and investor expectations,” said Brenda Lyons, executive vice president and global head of asset servicing products at State Street.
“We are excited to partner with State Street to accelerate the awareness of climate risks and opportunities,” said Dr. Richard Mattison, Chief Executive Officer of S&P Global Trucost and Chief Product Officer of ESG at S&P Global. “Market frameworks are being developed across many jurisdictions and S&P Global provides integrated approaches for market participants to manage and report on climate and ESG impacts.”
Recent findings leveraging Trucost data include:
- Major global companies could face up to 283 USD billion carbon pricing costs, with 13% earnings at risk, by 2025 under a high carbon price scenario.
- Major global companies are on track for >3ºC warming, falling 72% short of required emissions reductions to achieve the Paris Agreement.
- 66% of major global companies have at least one asset at high risk of physical risk under the high impact climate change scenario in 2050. The greatest risk comes from water stress and wildfire.
- For most business activities, the largest proportion of the carbon footprint is concealed in supply chains or in the product use and disposal phase. In the Health Care sector, upstream supply chain emissions account for almost 65% of the sector’s total carbon footprint. For the Consumer Discretionary sector, which includes car manufacturing, almost 80% of the sector’s carbon footprint comes from the downstream use of products by customers.
- 49% of revenues of major global companies are generated in business activities that support the United Nations Sustainable Development Goals (SDGs).
- 31% of revenues of major global companies are aligned to the EU Taxonomy for Sustainable Activities.
- (Source: Trucost, 2021)
State Street recently launched ESG Risk Analytics to provide risk management, metrics and target reporting capabilities for Task Force on Climate-related Financial Disclosures (“TCFD”) on a platform that allows clients to effectively measure their carbon footprint and intensity and offers clients monthly, quarterly and annual ESG reporting. The suite of ESG solutions also provides clients regulatory support and data coverage for the EU Sustainable Finance Disclosure Requirements (“SFDR”). With the Trucost engagement, State Street Risk Analytics will also bring clients support for UN Sustainable Development Goals (SDG), EU Taxonomy, and Sector-Specific Revenue metrics and will expand asset class coverage to include Sovereigns.
“For investment managers and asset owners globally, the demand for ESG reporting and data solutions continues to grow. As this need increases, our ESG Risk Analytics tools, combined with Trucost’s climate data services, are uniquely positioned to help clients meet the evolving global regulatory environment,” said Rick Lacaille, senior investment advisor and global ESG lead at State Street.
As interest from investors continues to grow for ESG integration, State Street’s suite of ESG solutions paired with State Street Alpha℠, the company’s open architecture front-to-back investment servicing platform, brings asset owners and investment managers an integrated, fully automated, end-to-end experience while meeting investment and reporting needs across asset classes.
Source: State Street
