State Street Achieves 2020 Environmental Goals Three Years Ahead of Schedule
State Street Corporation has released its 2016 Corporate Responsibility report, which highlights the company’s commitment to corporate citizenship, and environmental, social and governance activities. The report details how State Street exceeded its environmental goals set for 2020, three years ahead of schedule, including reducing greenhouse gas emissions and water use by 20 percent per person, and diverting 90 percent of waste sent to landfills. State Street was recently included on CR Magazine’s 100 Best Corporate Citizens list for 2017, jumping 30 spots since last year. The company ranked highest among banks included on the list.
Rick Pearl, Global Corporate Responsibility Officer for State Street [pictured], discussed the environmental goals for 2020, implementation and incorporation into long-term strategic planning, and corporate responsibility initiatives for beyond 2020—Jason Howell
JH: When did you initiate the 2020 goals and what were your main objectives?
RP: Environmental issues are of increasing importance to our stakeholders, including employees, the communities in which we operate, clients and shareholders. From a business standpoint, more clients are expecting their financial service providers to offer products and services that address environmental issues. More than three years ago we set a series of goals to reduce our greenhouse gas emissions and water usage by 20 percent per person and to divert 90 percent of waste sent to landfills by 2020, compared to a 2012 baseline. State Street has either met or surpassed these goals in 2016, three years ahead of our original target.
JH: Can you provide details on how these initiatives were achieved?
RP: Our success reflects greater employee involvement in environmental initiatives all across our company, enhanced energy efficiency and recycling at our facilities and reduced commuting times due to flexible work arrangements, just to name a few.
JH: Which initiatives did you find most challenging to implement?
RP: Waste diversion was likely the most difficult for us to implement. Because we have such a high rate of recycling to begin with, it took a longer amount of time to reach our goal than for carbon and water.
JH: How do you feel State Street is positioned relative to peers in incorporating environmental initiatives?
RP: Being a responsible citizen is a vital part of who State Street is and what we stand for as an organization. We were recently named to CR Magazine’s 100 Best Corporate Citizens list, ranked highest among banks.
JH: How does State Street set priorities and allocate corporate resources for environmental goals?
RP: Environmental factors have become part of State Street’s normalized decision-making processes, along with cost, etc. in real estate, procurement and IT, to name three key areas. The environmental goals are set by our environmental sustainability (ES) committee and approved by State Street’s Executive Corporate Responsibility committee. The ES committee evaluates company environmental data against contemporary international standards to determine its targets.
JH: Does State Street quantify the economic impact of ESG initiatives?
RP: As of December 31, 2016, SSGA had $176 billion in ESG assets under management, representing about 7 percent of total assets under management. With $176 billion in ESG assets under management, we have a broad perspective on the field of ESG investing and the varying client viewpoints that inform our approach. The majority of our ESG investments are in client-directed index strategies.
JH: In terms of specific business lines, is State Street looking to increase ESG investments under management and are special products being created to satisfy potential demand?
RP: To help investors better adopt ESG investment strategies, State Street offers a mix of investable products from low carbon and gender diversity ETFs to multi-factor risk analytics capabilities like ESG exposure reporting. We are often looking at new and innovative offerings to help clients move from ESG awareness to full integration.
JH: What are your other ongoing corporate responsibility initiatives and goals for beyond 2020, and how are they incorporated into State Street’s long-term corporate strategy?
RP: We’re building on our momentum by committing to new science-based targets to reduce our global greenhouse emissions by another 30 percent by 2025. State Street has invested in a number of projects during the year to offset carbon emissions from our operations and business travel, including the purchase of renewable energy certificates (RECs) to completely offset our North American electricity use. We also invested $418 million in renewable energy projects, including residential and utility solar and wind programs.