A Q&A
1. You have nearly a decade of experience leading sustainable investing research in asset management. What client needs made this the right time for State Street Investment Management to establish a dedicated Global Head of Sustainable Investing Research, and what attracted you to this challenge?
The industry has reached a point where client needs are increasingly sophisticated. This requires deeper, more specialized resources. State Street Investment Management recognized this shift and committed to supporting investors with their sustainability-related goals. In fact, the Sustainable Investing Research team has doubled in size over the last three years.
What attracted me to the firm was the strong foundation already in place. There is significant scale and breadth here—across equity, fixed income, and multi-asset capabilities—and deep expertise in data and portfolio implementation. Crucially, there is also a genuine commitment to innovation. This is the firm that launched the first US exchange-traded fund (ETF), and that appetite to develop new capabilities to meet client needs extends naturally to sustainable investing.
Finally, the culture of collaboration was essential. For years, my team has been engaged with our Fundamental Active Equity, Systematic Equity, and Fixed Income teams. A core tenant of our approach is that we are not operating in a silo or an ivory tower doing purely academic research. We are partnering directly with investment teams to ensure our research is implementable, practical, and designed to help address real client preferences.
2. Having been in this role for several months, how have you defined its core mission? What persistent challenges in sustainable investing—perhaps around data, interpretation, or integration—is your team prioritizing?
Our core mission is to enable investment teams across the firm to deliver on clients’ sustainable investing objectives.
Practically speaking, this means taking a proactive approach to emerging topics like biodiversity, or adaptation and resilience to physical climate risk. We proactively analyze the investment implications of these topics, developing a clear investment thesis on their potential to be financially material for our clients’ sustainability-related investment goals. A guiding principle for the team is that we must constantly “keep asking why”—why is this material, why would an investor choose to focus on it, and why is a specific implementation strategy the right approach?
The most persistent challenge we face in this work is the availability and quality of sustainability data. In my view, this manifests in two ways.
First, the corporate sustainability disclosure environment remains fragmented. Ideally, we want high-quality data directly from corporate issuers. However, in the absence of consistent disclosure across countries, we often have to rely on estimates from data providers. The more that disclosure improves and becomes standardized—which is why we engage with efforts like the International Sustainability Standards Board (ISSB) that aim to streamline materiality-focused, investor-useful disclosures—the more we can implement strategies based on verifiable facts owned by the company, rather than third-party estimates.
Second, the understanding of financial materiality itself is evolving. As new research emerges on topics like portfolio companies’ dependencies on nature, it takes time for the data available to investors to catch up. Our team is prioritizing staying ahead of these innovations as the data landscape evolves.
3. A key trend in sustainable investing is moving beyond third-party aggregated ratings. What is your team’s approach to research methodology, particularly for complex themes like physical climate risk or biodiversity?
The trend towards using data that is more specific than third-party aggregated ratings has been underway for several years, driven by increased investor sophistication. Aggregated ratings often combine disparate issues and can be “black box” in nature. It is difficult to interpret what a “B minus” score means for a portfolio when it bundles 12 different underlying inputs. It attempts to be the one tool for every job, but sometimes a more targeted approach may be warranted.
Climate transition risk was the tipping point for this shift. Investors realized that a specific emissions number was a far more effective proxy for quantifying transition risk (like a potential carbon tax) than an aggregated E-pillar score.
We are now seeing that dynamic play out across other complex topics. Investors are asking more targeted questions and need the “right tool for the job.”
For example, assessing the physical impacts of climate change and biodiversity requires location-specific data—a new layer of analysis. To understand a company’s dependency on nature (like a beverage company’s reliance on a specific water supply) or its exposure to physical climate risk, location is paramount.
To use a tangible example: if you are analyzing a real estate asset in a coastal city, you need data on projected flood risk for that specific location under different climate scenarios. You also need data on whether the company is investing in adaptation measures, such as modular flood barriers. Our research methodology focuses on identifying the specific objective—are we measuring dependency, risk, or opportunity?—and then sourcing the targeted data required to answer that specific question.
4. Could you share one or two priority themes on your research agenda for the next year and explain how a key insight on that theme can become actionable for our portfolio managers or clients?
A top research priority this year has been responding to client demand for investment solutions that target real-world outcomes, including those reflected in the UN Sustainable Development Goals (SDGs). This opens up new questions: How do we identify companies contributing to solutions for environmental and social challenges, and how do we measure the outcomes of those investments across asset classes?
Take the example of a power utility. We need revenue data tied specifically to solutions. It’s not enough to know their total revenue from power generation—we need to know how much revenue comes from alternative energy versus legacy sources. If alternative energy is 1% of revenue, it’s marginal; if it’s 20% or 30%, it’s core to the business, and we can link an investment in the asset to a tangible outcome such as affordable and clean energy (SDG 7) or climate action (SDG 13).
The research process involves setting the criteria for credibly identifying assets that can contribute to solutions, and then sourcing the data at sufficient granularity for portfolio construction and outcome measurement.
To make this actionable, we rely on deep collaboration with the sustainable investing strategy and investment teams. They are our eyes and ears for client needs. They ask us the hard questions before the clients do, effectively helping us “road test” the research. The investment teams ensure that what we produce is actionable within their specific investment processes, which will look very different for a systematic equity portfolio versus an active fundamental equity portfolio.
By bringing the investment teams along as we develop the research and operationalize the data, we ensure they have high-quality data in their systems, understand how to use it, and can speak to it. We are also creating a common language across the firm, which provides a more consistent experience for clients invested in multiple strategies.
5. Finally, what is your long-term vision for the role of research in State Street Investment Management’s sustainable investing platform? What foundational research capabilities are you building to help clients navigate emerging changes in this space?
My long-term vision is for the Sustainable Investing Research team to be a trusted partner for our clients globally.
In practice, this means being deep experts who can act in a consultative role. We must help clients with sustainability-related goals navigate the complexities of sustainable investing and understand the trade-offs involved in different approaches. There is a lot of noise in this space, and we want to help separate the hype from reality. We aim to be practical and credible, understanding the limitations of what is possible today while continuing to drive innovative solutions.
The foundational capability we are building is not a single data platform or tool, but rather a breadth of capabilities with credibility. The goal is to provide clients with choices, giving them the tools they need to achieve their specific objectives. By continuing to ask the right questions and identifying the best data and implementation strategies, we can support the firm’s ongoing innovation and meet the diverse and evolving needs of our clients.