The State Street Low Carbon ESG International Equities Index Trust
State Street Global Advisors has created a low carbon, high environmental, social and corporate governance(ESG) international equities fund, called the State Street Low Carbon ESG International Equities Index Trust
In response to growing demand for ESG investment options, SSgA has revamped an existing index fund, launched 18 months ago, which initially screened out companies involved in tobacco and controversial weapons. The fund will now track the MSCI World ex Australia Select ESG Low Carbon Integrated Index, which is biased against companies most highly exposed to carbon price changes.
“The world is shifting towards a low-carbon economy and institutional investors are increasingly reassessing their portfolios to make sure they’ll be on the right side of that global trend,” said Susan Darroch, head of Global Equity Beta Solutions, Asia ex Japan, at State Street Global Advisors.
“While many larger institutions are of sufficient size to have customised, low carbon/ESG mandates, other institutions are looking to achieve the same exposure via a low-cost indexed fund. Our clients want the ESG outcome, but to avoid significant deviations in country and sector allocations when compared to the broader market index. There are less than a handful of existing options to do this locally."