While the world has changed significantly in light of the COVID-19 crisis, State Street’s purpose of helping to achieve better outcomes for the world’s investors and the people they serve has remained steadfast.
Even before the pandemic disrupted the global economy, and our lives with it, our clients —asset managers and asset owners — faced growing challenges. The rise of passive investing, elusive alpha, lower-for-even-longer interest rates, and rising operational costs and complexity altered the business of investing, prompting institutional investors to re-engineer their businesses. As they work to find competitive advantages and become more efficient, our clients are relying on us to take on more of their investment operations. They want a new kind of partner that anticipates their problems and offers innovative solutions.
To best serve these evolving needs, State Street is undertaking a transformation of its own, and the strategy we developed to drive that change took hold in 2019. Throughout the year, our efforts to become an essential partner to our clients, create a high-performing organization, enhance operational resiliency, develop an end-to-end servicing platform and execute on behalf of our shareholders, gained considerable momentum.
As 2020 began, the impacts of the pandemic sharpened the urgency for providing our clients with more comprehensive solutions and a global operating model that can adapt quickly to their ever-changing needs. The crisis also highlighted the commitment and imagination of our employees as they worked to deliver our services with minimal to no disruption. Their agile approach and dedication, and the investments we have made in technology and infrastructure, helped us demonstrate extraordinary resiliency as we worked to help our clients achieve their objectives in an unprecedented environment.
What became clear during this crisis is that we are more interconnected and dependent on one another than ever before. This is why we have named our first-ever stakeholder report - Stronger Together. We intend for it to bring to life the many ways we are working together to create a new State Street that exceeds our clients’ expectations for responsiveness, problem-solving and results.
Inside this report, members of our Management Committee and executive leaders outline how we are implementing new ways of becoming a better provider for our clients. They describe the changing needs of our clients and how we are adapting our capabilities, not only for what they need today, but also to ensure we are a strong partner for them in the future.
A significant development for us in 2019 was the launch of State Street AlphaSM, the industry’s first data-driven, front-to-back servicing platform from a single provider. With it, we expect to transform the way we engage and serve our clients, while providing them with the insights and technology scale they need to grow and adapt.
We also discuss improvements we have made in our client service programs and the ways we are using technology to continue to innovate. To better serve our clients, we shifted key operational functions to global service centers in 2019, enabling a “follow-the-sun” approach to continuous service across time zones. This model helped sustain our operations as the pandemic spread, allowing us to reassign workloads amid rolling country lockdowns.
The importance we place on talent, inclusion, diversity and corporate citizenship is also highlighted in this report. We are encouraged, but not surprised, by the renewed sense of purpose and energy our employees are bringing to State Street’s transformation. To continue to build a diverse and engaged workforce, we instituted new programs and online learning tools and supported employee networks focusing on everything from environmental sustainability and business process improvement to skillset development and network building. We have also evolved our performance management process, making a commitment to ensure that all employees receive timely and consistent feedback. Our collective work is helping to further our goal of becoming a high-performing organization with engaged and unsurpassed talent.
State Street’s commitment to our communities and to environmental, social and governance issues is evident by the work of our State Street Foundation, volunteerism of our employees, and our focus on sustainability to promote long-term value. We are proud that our engagement on important sustainability issues continues to have a measurable impact, including significant increases in the number of women on corporate boards as a result of our Fearless Girl campaign.
In addition to highlighting business and financial performance metrics, this report includes a summary of our sustainability performance in 2019. As long-term stewards of our clients’ assets, we understand that material ESG issues can impact performance well into the future. In the same way that our asset management business has called on portfolio companies to incorporate sustainability into their long-term strategy, we have committed to making sustainability part of our business priorities and will report on our progress alongside our financial performance. We have adopted the investor-driven materiality framework of the Sustainability Accounting Standards Board (SASB) and the principles of Task Force on Climate-related Financial Disclosures (TCFD) to improve the transparency around our efforts. We are also working to promote consistency and comparability of sustainability metrics throughout the industry.
Even in volatile times, we at State Street remain laser focused on our long-term strategy. With our strategy in place, we believe we can realize our vision of becoming the leading asset servicer, asset manager and data insights provider capable of delivering long-term value to our shareholders, our clients, our employees and the communities in which we live and work. This belief stems from our experiences over the past 228 years.
We have endured events that defined centuries — from world wars and economic depressions to incredible advances in science, technology and equality. All of these moments were marked by stories of challenge, but also of success. We are confident that this time will be no different.
We all have a role to play in creating our future, and we truly are Stronger Together.