What Do the UN Sustainable Development Goals Mean for Investors?

The report is intended to allow investors to learn, engage and collaborate on sustainable development goal focused activities in order to promote long-term sustainability.

The launch of the UN Sustainable Development Goals (SDGs) in 2015 has made clear that the global community of countries relies heavily on the private sector to solve some of the most urgent problems the world is facing. Both companies and institutional investors are being asked to contribute to the SDGs through their business activities, asset allocation and investment decisions.

Discussions taking place since the launch of the SDGs tend to focus on how investors can contribute to the SDGs. But it is often too easily taken for granted that investors are already convinced they should. The SDG investment case tries to answer the question: Why are the SDGs relevant to institutional investors? It explains what the SDGs are, why there is an expectation that investors will contribute, and then makes the case for why investors should want to.

Since the launch of the Principles for Responsible Investment in 2006, the preamble to the Principles has said: “We recognise that applying these Principles may better align investors with broader objectives of society.” Never before have these “broader objectives of society” been more clearly defined than in the SDGs. All the countries of the world have agreed on a sustainability agenda, covering three broad areas – economic, social and environmental development – and comprising 17 global goals, further developed in 169 targets, to be reached by 2030.

As well as the SDGs providing the first generally agreed framework that defines the “broader objectives of society”, SDG 17 clearly shows the global community’s need to get investors on board. But to do so, investors will want to know how contributing to the SDGs will help them fulfil liabilities and beneficiaries’/clients’ expectations about risk-adjusted returns. They will ask: Why should I consider the SDGs relevant to my investment strategy, policy, asset allocation, investment decisions and active ownership?