State Street Corporation

State Street appears to have had mixed engagement on sustainable finance policy overall, taking mostly positive top-line positions while expressing objections to specific policies. State Street and its asset management subsidiary, State Street Global Advisors, have been actively engaged with sustainable finance policies across the globe.

State Street has stated support for the goals of the Paris Agreement and in 2022 State Street Global Advisors expressed support for policy advocacy to achieve net zero. In 2021, State Street Global Advisors joined the Net Zero Asset Managers initiative, a coalition of asset managers that supports the goal of net zero emissions by 2050 or sooner, and signed onto a Global Investor Statement calling on governments to take urgent action to reduce emissions. However, State Street has suggested that continued investment in fossil fuels is necessary to achieve the net zero transition. State Street appears to have a mixed position on the need for sustainable finance regulation, supporting regulatory action in some cases, like Australia, and voicing more caution in others, like the EU’s Renewed Strategy. In a 2022 podcast, State Street Global Head of ESG Products suggested that sustainable finance regulation is a “good development” but asserted that markets should be the main driver of these standards.

Since 2019, State Street has become mostly supportive of regulation that would mandate climate disclosure by the corporate sector, but still appears skeptical of stringent regulation on the financial sector. In a 2021 insights paper State Street appeared to support mandatory carbon emissions disclosure for the EU, and in a 2021 letter to the SEC it called for similar mandatory disclosure for issuers in the US. However, in 2021 comments to the FCA on its consultation on climate-related disclosures by asset managers, life insurers, and pension providers, State Street Global Advisors advocated for extending the reporting deadline and called Scope 3 disclosure mandates “premature.” After the SEC released its proposed climate disclosure rule in March 2022, State Street released an article that took a supportive position toward the proposal, calling it a “watershed moment.” However, in its comments to the SEC, State Street outlined several objections to the proposal including its Scope 3 disclosure requirements and certain governance and scenario analysis disclosure requirements. State Street took a mixed position on the International Sustainability Standards Board’s draft climate and sustainability disclosure standards, again not supporting the proposed Scope 3 disclosure requirements. Despite this, State Street has characterized its engagement with climate disclosure policies as supportive in ESG and Stewardship reports.

State Street appears to have taken mixed positions on a taxonomy. State Street supported the EU's taxonomy in a 2019 consultation response to the UK's FCA and a insights article from 2021 reiterated this support. However, in feedback to the Commission on its Renewed Strategy in 2020, State Street opposed the expansion of the taxonomy to cover environmentally harmful activities, and in a 2021 consultation on the review of the AIFMD, State Street characterized the taxonomy as overly prescriptive. In a 2022 insights paper, State Street appeared to support the weakening of the taxonomy to include natural gas as “green”.

In March 2020, State Street Global Advisors released a guide to the EU's climate benchmarks which was generally supportive of the policy with minor concerns around data availability. In feedback to the Commission in 2020, State Street supported verification for the EU Green Bond Standard and supported some of the Commission’s suggestions for new ESG labels but did not support others. In a response to the FCA’s discussion paper on sustainability disclosure requirements and investment labels in January 2022, State Street Global Advisors did not support the proposed classification system for investment products and cautioned against imposing thresholds for fund categories. In August 2022, State Street Global Advisors took a mixed position on the SEC’s efforts to establish ESG funds, supporting the need to distinguish between ESG and non-ESG but asserting that the proposed fund categories were too broad.

In feedback to the European Commission in 2020, State Street was not supportive of incorporating adverse ESG impacts into fiduciary duty or the Commission’s suggestions concerning further integrating ESG preferences in advice to clients. In response to the ESA’s Sustainable Finance Disclosure Regulation (SFDR) consultation on investor ESG disclosure in 2020, State Street Global Advisors argued for a less prescriptive approach, and in the 2021 review of the AIFMD State Street opposed mandatory consideration of ESG factors in investor duties. Alternatively, in comments to the US Department of Labor in 2020, State Street strongly opposed regulation that would limit fiduciaries' ESG investing and voting on ESG issues. In October 2021, State Street issued a press release stating support for the Department of Labor’s proposed ESG fiduciary investing rule, a proposal that would reverse Trump-era regulations limiting ESG investing and voting, but in its comments on the proposal State Street Global Advisors asked the Department to alter language and remove references to ESG, cautioning against an implied requirement to consider ESG factors in all cases. In 2022 comments on the FCA’s proposed Sustainability Disclosure Requirements, State Street Global Advisors appeared to support a requirement to disclose how ESG is incorporated into investor duties, but comments to the SEC also in 2022 outlined several objections to proposed ESG disclosure requirements for investors, including emissions disclosure and proxy voting and engagement disclosure requirements. In 2023, CEO Ron O’Hanley appeared to criticize political efforts that seek to limit ESG investing, saying anti-ESG proponents have “left facts aside.”

State Street has appeared not to support incorporating ESG factors into risk management and prudential regulation. In comments to the Basel Committee on Banking Supervision in 2022, State Street advocated for flexibility in the Committee’s proposed risk management principles and requested that certain provisions on climate risk management and scenario analysis be withdrawn. In comments to the Canadian Office of the Superintendent of Financial Institutions in 2021, State Street suggested that it was premature to mandate additional climate-related stress tests and emphasized that scenario analysis is still in its “early stages.” A March 2022 memo from the Office of the Comptroller of the Currency (OCC) shows that State Street, as constituents of the Bank Policy Institute, met with the OCC to outline “challenges” to its draft principles for climate-related financial risk management.

State Street has disclosed membership in principal US trade associations but has not given details on the sustainable finance policy positions of these organizations or actions taken to address misalignment. It has not disclosed some trade association membership, including in non-US associations.