Tackling Environmental Sustainability - State Street Best Practices
Headquartered at Boston, State Street is one of the world’s leading financial services companies. They are proud of their efforts to understand and tackle environmental, social and governance (ESG) issues in the interests of their clients, staff and the communities they serve in.
“As COVID-19 reinforces the linkages across resiliency and sustainability, State Street continues to take a leading role in industry efforts around climate change risk, ESG investing and sustainability action,” says Dustin Sarnoski, global head of Real Estate at State Street.
The company tackles sustainability in four key ways. They help clients understand the carbon profile of their portfolio holdings and provide research from leading sustainability thinkers. They also help asset owners reduce climate risk in their portfolios and embrace green innovations. State Street works with policymakers and industry associations to promote transparency and understanding around climate change risks. Over the years, they have made a huge effort to reduce their carbon footprint and are already succeeding after achieving carbon neutrality in 2020.
State Street has also set an ambitious absolute reduction goal to adhere to the “well below two degree” standard set by the Science-Based Targets Initiative.
The company has set goals to decrease its environmental impact via carbon usage reduction (30 percent goal by 2030), water use reduction (10 percent goal by 2025), and an increase in recycling rate (80 percent by 2025). As of December 2020, State Street reached a 12 percent reduction in carbon, 43 percent reduction in water use and achieved a 74 percent recycling rate.
State Street is also actively managing its real estate portfolio, with a potential reduction in office space. The measure has resulted in less energy use, brought on partly by COVID-19, which has been “one of the silver linings of this otherwise difficult period,” adds Dustin.
As part of their Risk Assessment Management Program, State Street has also built environmental and social factors into their vendor selection, ensuring that the supply chain has a low risk of environmental impact. These factors include policies covering equal opportunity, child or forced labour, anti-corruption and environmental certification.
The company’s dedication to environmental causes is not just a corporate-wide, targeted approach. It is about direct, hands-on engagement with employees. This is why an Environmental Sustainability Employee Network (ESEN) was set up in 2016 that has grown and spread worldwide ever since.
Members of the network have ideated several organization-wide activities and initiatives, including eliminating or reducing the use of styrofoam cups and single-use plastics in a number of cafeterias, and participating in environment-friendly campaigns in their local communities.
“The network has proven to be a valuable resource to the business as ESEN members have worked on a variety of projects in different areas of the business, simultaneously supporting network professional development goals and those of business lines, focussed on ESG and sustainability,” – says Timothy Devlin, chair of ESEN Network and a consultant with State Street AlphaSM.
To encourage employee engagement, State Street also offers two company-paid volunteer days, which have proven to be popular with staff who have clocked up hundreds of thousands of hours supporting more than 1,000 community organizations. These include cleaning up hurricane-damaged beaches on the Cayman Islands and participating in tree planting projects in various locations across the world, including Poland, China and Germany.
Learn more from their recently published State Street ESG Report available here.