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State Street Climate ESG International Equity Fund

Responsible Investing Approach

The Fund favours companies with lower carbon emissions and with higher environmental, social and governance (ESG) ratings, including those producing green revenues, and those that are better positioned for the physical risks posed by climate change, as well as companies with strong ESG ratings using State Street's ESG scoring methodology ("R-FactorTM").

The Fund aims to avoid companies with large fossil fuel reserves, or significant brown revenues, to screen out companies with material business activity involving tobacco, controversial (including nuclear) weapons, thermal coal, gambling, alcohol or adult entertainment and to screen out companies that exhibit severe violations of the United Nations corporate sustainability principles or have extreme ESG controversies.

The Fund Manager aims to influence change in respect of socially responsible and sustainable business practices through engagement with investee companies or by using its proxy voting power. The Fund Manager actively engages with portfolio companies on issues that promote long-term value creation. This engagement is a common feature of all portfolios managed by the Investment Manager, voting decisions are not specific to this Fund.

Documents

Exclusions

The Fund aims to avoid companies with large fossil fuel reserves, or significant brown revenues, to screen out companies with material business activity involving tobacco, controversial (including nuclear) weapons, thermal coal, gambling, alcohol or adult entertainment and to screen out companies that exhibit severe violations of the United Nations corporate sustainability principles or have extreme ESG controversies. The exclusion thresholds are assessed by using data from two data providers: Sustainalytics and MSCI, and then the Fund Manager generates a restricted list from each provider using the metrics and thresholds outlined in the Information Booklet.

Exclusions Full/Partial Exclusion
Description
TobaccoTobacco Partial

The Fund does not invest in companies that derive more than 10% of their revenues from the production of tobacco and tobacco-related products (including vaping, pipes and other related products).

AlcoholAlcohol Partial

The Fund does not invest in companies that derive more than 10% of their revenues from the manufacture of alcoholic products.

WeaponsWeapons Full

The Fund does not invest in companies that derive any revenue from the manufacture of cluster munitions, antipersonnel mines and land mines, depleted uranium, incendiary weapons and white phosphorus.

Partial

The Fund does not invest in companies that derive more than 10% of their revenues from the manufacture of biological, chemical or nuclear weapons, nor does it invest in companies that derive more than 10% of their revenues from manufacturing or distribution (wholesale or retail) of firearms and small arms ammunition for civilian markets. The Fund also excludes companies where its subsidiary has more than 50% of ownership in companies involved in controversial weapons. 

Fossil fuel exploration, mining and productionFossil fuel exploration, mining and production Partial

The Fund does not invest in companies that derive more than 10% of their revenues from the extraction or power generation of  thermal coal, oil and gas.

Human rights abusesHuman rights abuses Partial

The Manager will exclude companies whose actions the Manager believes are violating compliance with the United Nations' (UN) Global Compact Principles and companies experiencing extreme ESG controversies. The screen captures companies who are in violation of these principles, which cover Human Rights, Labour, Environment and Anti-Corruption.

Labour rights violationsLabour rights violations Partial

The Manager will exclude companies whose actions the Manager believes are violating compliance with the United Nations' (UN) Global Compact Principles and companies experiencing extreme ESG controversies. The screen captures companies who are in violation of these principles, which cover Human Rights, Labour, Environment and Anti-Corruption.

Environmental damageEnvironmental damage Partial

The Manager will exclude companies involved in incidents/events that may pose business or reputational risk due to potential impacts on stakeholders, the environment, or the company. Where the event has a severe impact on the environment and society, posing serious business risks to the company.

GamblingGambling Partial

The Fund does not invest in companies that derive more than 10% of their revenues from the ownership or operation of gambling facilities, and that offer gambling services.

Adult entertainment/pornographyAdult entertainment/pornography Partial

The Fund does not invest in companies that derive more than 10% of their revenues from the production of adult entertainment and/or that own/operate adult entertainment establishments.

Inclusions

The Fund Manager will favour companies who we believe are well positioned for global climate change including, but not limited to, those generating lower carbon emissions and higher green revenues. It will also favour companies that rate more strongly on its R-FactorTM score, which is a measure of Environmental, Social and Governance capabilities.

The Fund Manager aims to influence change in respect of socially responsible and sustainable business practices through engagement with investee companies or by using its proxy voting power. The Fund Manager actively engages with portfolio companies on issues that promote long-term value creation. This engagement is a common feature of all portfolios managed by the Investment Manager, voting decisions are not specific to this Fund.

State Street Global Advisors votes its clients' proxies where the client has delegated proxy voting authority to it, and State Street Global Advisors votes these proxies and engages with companies in the manner that we believe will most likely protect and promote the long term economic value of client investments. Through its conversations with company boards and management teams, the Manager aims to understand whether and how companies are incorporating overseeing the risks and opportunities related to climate into relevant strategy setting and financial planning processes. Engagement Topics Include Board Oversight, Climate-related Risks and Opportunities, Climate Transition Plans, TCFD Disclosure, and Methane Emissions.

Climate action & towards net zero

UN Sustainable Development Goals

Conventions & Treaties

State Street finds that the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) provide an effective framework for the disclosure of climate-related risks and opportunities and expects all companies to provide public disclosures in accordance with the four pillars of the TCFD. State Street expects portfolio companies to regularly identify whether there are risks related to human rights, as defined in the Universal Declaration of Human Rights and the ILO Declaration on Fundamental Principles and Rights at Work, in their operations and manage any material risks that emerge, providing relevant disclosures to investors. The Fund Manager applies negative screening and excludes companies whose actions the Manager believes are violating compliance with the United Nations' (UN) Global Compact Principles.

Conventions & Treaties Aligned
Description
UN Global Compact Yes

The Fund Manager excludes companies whose actions the Manager believes are violating compliance with the United Nations' (UN) Global Compact Principles.

Task Force on Climate-related Financial Disclosures Yes

State Street finds that the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) provide an effective framework for the disclosure of climate-related risks and opportunities and expects all companies to provide public disclosures in accordance with the four pillars of the TCFD.

International Labour Organisation's Fundamental Conventions Yes

State Street expects portfolio companies to regularly identify whether there are risks related to human rights, as defined in the Universal Declaration of Human Rights and the ILO Declaration on Fundamental Principles and Rights at Work, in their operations and manage any material risks that emerge, providing relevant disclosures to investors. 

International Bill of Human Rights Yes

State Street expects portfolio companies to regularly identify whether there are risks related to human rights, as defined in the Universal Declaration of Human Rights and the ILO Declaration on Fundamental Principles and Rights at Work, in their operations and manage any material risks that emerge, providing relevant disclosures to investors.

ESG Score

ESG Score
Does the portfolio have an ESG score? Not disclosed
If so, who is responsible for calculating the score? Not disclosed
If a score is calculated, is this publicly available; i.e. displayed in monthly reports, on your website, etc.? Not disclosed
If the portfolio has an ESG score, how often is that score recalculated to account for changes to portfolio holdings? Not disclosed

Impact Investing Score

Impact Investing Score
Does the portfolio have an Impact Investment score? Not disclosed
If a score is calculated, is this publicly available; i.e. displayed in monthly reports, on your website, etc.? Not disclosed
If the portfolio has an Impact Investment score, how often is that score recalculated to account for changes to portfolio holdings? Not disclosed
Does the fund publish its holdings publicly? Yes

Policies, Certification & Marketing

Policies, Certification & Marketing
Proxy voting policy View Proxy voting policy document
Stewardship policy View Stewardship policy document
Modern slavery policy View Modern slavery policy document
Is the fund RIAA certified? No
Asset Stewardship Report 2023 View Asset Stewardship Report 2023 document
Fundmonitors.com

State Street Climate ESG International Equity Fund

Strategy Summary

The Fund seeks to achieve capital growth and income in line with the MSCI World ex-Australia Index, subject to delivering climate and ESG objectives. To achieve this goal the Fund invests in listed International securities in the MSCI World ex Australia Index and favours companies with lower carbon emissions and with higher environmental, social and governance (ESG) ratings. The Investment Manager will normally rebalance the portfolio quarterly to maintain the Fund's ESG and climate characteristics. The Fund's investment strategy may include the use of options, futures and other derivatives. These instruments are not used speculatively and are never used to gear the Fund.

Key Terms

Status: Open Inception Date: Jul 2016
Strategy: Equity Long Style: Growth
Geography: Global Domicile: Australia
Investors: Retail Min. Investment: AU$25000
Mgmt. Fee: 0.24% Perf. Fee: 0%

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Australian Fund Monitors Pty Ltd
A.C.N. 122 226 724
AFSL 324476
Email: [email protected]
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