State Street Associates

The Intersection of Securities Lending and ESG Investing

As more investors integrate ESG themes into their borrowing strategies, many are asking if ESG investing and securities lending can co-exist?

April 2020

A growing number of asset owners are evaluating their securities lending practices due to environmental, social and governance (ESG) issues as long-term investors. Many ESG-minded asset owners are concerned that borrowers could undermine the stewardship efforts of their long-term investments or fail to consider ESG characteristics in their investment decisions.

A review of short selling’s role in providing liquidity to and facilitating price discovery within capital markets suggests that short selling is neither detrimental to long-term value nor harmful to ESG concerns.

Hear how institutional investors and lenders are integrating ESG characteristics into their investment processes.