State Street partners with S&P to bolster ESG data and analytics offering

Custodian follows month of prioritising ESG capabilities with deal to integrate S&P Global Trucost’s data and analytics capabilities.

By Jonathan Watkins

State Street has entered into a strategic engagement with S&P Global Trucost to leverage its climate data and analytics, as part of the custodian’s own environmental, social and governance (ESG) capabilities.

As a result of the agreement, State Street will offer its clients the opportunity to access Trucost environmental data through the reporting and analytics capabilities of its own platforms.

The functionality will allow its custody clients to access carbon footprint and other environmental data mapped to their portfolios, as well as Taskforce on Climate-related Financial Disclosure (TCFD) reporting features, applying Trucost’s Carbon Earnings at Risk, Paris Alignment, and Physical Risk data intelligence.

State Street has significantly upped its ESG work over the past month, most recently enhancing its ESG Solutions suite through a new risk analytics offering providing clients with the ability to address global regulatory reporting and risk disclosure requirements. 

In addition, the custodian said it intends to set up an ESG-aware commingled cash collateral reinvestment strategy, in a first for its agency lending business.

The latest move with S&P is another example of custodians bolstering their proprietary data offerings with FinTechs and partners to cover as many data and analytics possibilities as they can.

“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. 

State Street’s work in the ESG space quickly earned it a new mandate with the Risk Analytics solution adopted by Australian super fund, EISS Super, just a day after the custodian announced its launch.  

Speaking with Global Custodian after its earnings call Ron O’Hanley highlighted the importance of ESG on both the asset management and asset servicing sides of the business.  

We get a lot of the window from our asset management side, as it’s become more fully integrated into the investment process for many – and soon to be most – asset managersSo to be able to do performance analytics and management we need to be able to offer that service to our clients. 

We think we’ve got some data that truly is valuable, SSGA developed the R factor analysis [for example]. But often times the biggest challenge isn’t the data, it’s managing the data and bringing it to a form that can actually be analysed and reported. So our role is in analytics and marshalling the data.