State Street launches carbon asset servicing solution

Oksana Patron

10 May 2023

State Street Corporation has announced the launch of its new Carbon Asset Servicing Solution and depositary services that will allow asset managers, asset owners and financial institutions to integrate carbon-related assets into their portfolios.

The new solution will provide a range of fund administration and depositary services, including recordkeeping, NAV calculation, reporting and other oversight functions and will also allow clients to leverage State Street’s range of asset services for this growing carbon asset class.

“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 maximise the potential of their investment portfolios using State Street’s fund administration expertise,” Phil Kim, global head of ESG Product at State Street, said.

According to the company, the carbon assets market was dramatically growing with total traded value for compliance and voluntary credits having reached a record €865 billion in 2022 and expected to grow fifteen-fold by 2030.

“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,” Kim concluded.