State Street introduces global carbon asset servicing solution


State Street has launched a carbon asset servicing solution that enables key stakeholders integrate carbon-related assets into their portfolios.

According to the firm, it seeks to help clients simplify the management of carbon assets. Additionally, clients accessing the solution will be able to incorporate carbon assets into both existing ESG and non-ESG portfolios, leveraging the company’s back and middle-office capabilities.

The solution provides a range of fund administration and depositary services, including recordkeeping, NAV calculation, reporting and other oversight functions. With the adoption of this solution, clients can now leverage State Street’s full range of asset services for this growing carbon asset class.

State Street’s also said its new solution provides asset managers, asset owners and other financial institutions seamless integration of carbon assets into State Street’s core investment servicing offering — coordinating multiple parties’ data, including top carbon registries, exchanges and cash agents, allowing clients to gain exposure to this growing asset class via spot and derivatives markets.

State Street global head of ESG product Phil Kim said, “The carbon assets market is growing dramatically—as the total traded value for compliance and voluntary credits reached a record €865 billion in 20222 and is expected to grow fifteen-fold by 2030 as new regulations in major regions push corporations globally to report on and offset their greenhouse gas emissions.

“Our new carbon asset servicing solution will help clients gain access to this emerging asset class so they can directly hold carbon allowances and credits and trade them as they would other products, and ultimately look to maximize the potential of their investment portfolios using State Street’s fund administration expertise.

“As businesses continue to move toward models that reduce greenhouse gases and emission standards increase in scale and magnitude, the price of carbon offsets are likely to increase. Investing in carbon assets can help fund the energy transition and diversify portfolios, all while offering the opportunity for investment returns.”

Dun & Bradstreet, a provider of business decisioning data and analytics, has recently expanded its ESG Rankings coverage from 42 million to 75 million.

The firm said this expansion reflects a recent update regarding the materiality weighting assigned to the company’s ESG Rankings to better align with the Sustainability Accounting Board Standards (SASB).

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