This week, during the 75th United Nations General Assembly, climate change will once again be a central topic, with thousands of virtual participants from around the world reinforcing the urgent need for action. While COVID-19 has highlighted the linkages between public health and the environment, the UN’s Intergovernmental Panel on Climate Change reports that the world has a little less than a decade left to bend the curve on greenhouse gas emissions (GHGs) to avoid temperature rises that will dramatically threaten people and the planet.
For our part, I am pleased to announce that State Street is committing to reducing our carbon emissions on an absolute basis over the next 10 years in accordance with the Science-Based Targets initiative (SBTi), and we will achieve carbon neutrality for our Scope 1 (natural gas) and Scope 2 (electricity consumption) emissions this year. Carbon neutrality is achieved by calculating a company’s carbon footprint and reducing it through a combination of reduction actions plus the purchase of renewable energy credit (RECs). Reducing our emissions on an absolute basis addresses our carbon footprint at its root by ensuring that less carbon is created in the first place.
At State Street, we are committed to taking action on climate change across four different dimensions. First, as a servicer of assets, we help our clients better understand the carbon profile of their portfolio holdings so they can take action. Second, as an asset manager, we help asset owners reduce climate risk in their portfolios and embrace the growth opportunities in green innovation. As part of our asset stewardship efforts, State Street Global Advisors engages with portfolio companies and boards to understand how they are managing the opportunities and risks that climate change brings. Third, as a responsible corporation focused on the long term, we are committed to reducing our own carbon footprint. Lastly, as an engaged industry and community partner, we work with policymakers, industry initiatives like the Taskforce on Climate Related Financial Disclosures, and local stakeholders like the One Waterfront project in Boston to maximize our effort and impact on the problem of climate change.
As a global financial institution, one of our main environmental impacts comes from our operational activities. To address this, we diligently track and monitor the impact of our business operations, and we work towards aggressive, science-based targets that hold us accountable for reducing our energy use and greenhouse gases, water usage and discharge, and improving waste recycling.
We have an especially strong track record on carbon reduction. In fact, at the end of 2019 we met our 30 percent carbon reduction goal (using 2015 as the base-year) six years ahead of our 2025 timetable. We are delighted to reach carbon neutrality this year thanks to infrastructure retrofitting, purchasing RECs and carbon offsets, and enjoying tailwinds from “greening the grid” (which means that, where possible, we purchase electricity generated by renewable energy sources).
We are also focused on reducing our carbon footprint overall. That means reducing our carbon emissions on an absolute basis over the next 10 years, in alignment with the SBTi around the “well below 2 degrees centigrade” standard. We are aiming to achieve nearly a 30 percent reduction in absolute Scope 1 (natural gas) and Scope 2 (electricity consumption) carbon emissions by the end of 2030.
To learn more about our carbon reduction efforts and other environmental initiatives, I encourage you to read a recent Q&A with State Street’s Head of Global Dustin Sarnoski.
At State Street, we are unwavering in our commitment to reduce the environmental impact of our own business operations as well as work with institutional investors and other stakeholders around the world to respond to the climate change challenge. This multi-pronged approach magnifies our impact. In this week of climate focus around the world, I call on both the public and private sectors to recommit to measurable reductions in greenhouse gas emissions so that together we can work toward a more resilient and sustainable future.