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Transforming our World through Investment

The purpose of this study is to examine how institutional investors across the world are beginning to interact with the Sustainable Development Goals (SOGs), and paint an early picture of investors' current and future plans to engage with these Goals. The study also identifies barriers investors face to supporting the Sustainable Development Goals, and provides recommendations for how these could be overcome.


EXECUTIVE SUMMARY


The purpose of this study is to examine how institutional investors across the world are beginning to interact with the Sustainable Development Goals (SOGs), and paint an early picture of investors' current and future plans to engage with these Goals. The study also identifies barriers investors face to supporting the Sustainable Development Goals, and provides recommendations  for how these could be overcome.

The 17 Sustainable Development Goals, also known as the Global Goals, are outlined in the UN document Transforming Our World: the 2030 Agenda for Sustainable Development1  and were adopted by 193 countries at the UN Sustainable Development Summit in September 2015. The Goals cover a wide range of social, environmental and economic targets for global sustainable development and tackle some of the most serious issues facing people and the planet.

The findings of this report are based on responses to a survey received from institutional investors across the globe, with US$5.9trillion in total assets under management, and on interviews with other stakeholders. The key conclusions drawn from the research are listed below:

• 58% of the investors which completed the survey state that senior leadership at their organisation are aware of the Goals. 56% of respondents say that senior leadership see the Goals as relevant to their whole organisation, and 44% say that senior leadership see the Goals as relevant to their investment arm.

• 65% of respondents agree that acting on the Goals 'aligns with their fiduciary duties', and 75% believe that acting to support the Global Goals will bring their organisation reputational benefits. 62% of respondents believe that acting on the Goals 'can create apportunilies for increased investment returns' and 44% agree that 'weak progress towards the Global Goals represents a material risk for our organisation'.

• More than half of the respondents identified working toward achieving all 17 Goals as having either high or medium potential to help meet their Organisations' investment objectives. Goal 9 ('Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation') was ranked as having the highest potential, followed jointly by Goal 8 ('Promote sustained, inclusive and sustainable economic growth, full and produclive employment  and decent work for all') and Goal 13 ('Take urgent action to combat climate change and its impacts').

75% of respondents are already taking action on three or more of the Goals, although not all are framing these activities in the language of the SDG framework. The top three Global Goals investors are currently taking action on are Goals 13 ('Take urgent action to combat climate change and its impacts'), 5 ('Achieve gender equality and ernpower all women and girls') and 7 ('Ensure access to affordable, reliable, sustainable and modern energy for all'). The Goals which are likely to see a significant increase in action in the next 15 years are Goals 4 ('Ensure inclusive and equitable quality education and promote lifelong learning apportunilies for all'), 11 ('Make cities and human Settlements inclusive, safe, resilient and sustainable'), and 16 ('Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective,accountable and inclusive institulians at alllevels').

• 67% of respondents report that they are potentially prepared to seek clients' and/or beneficiaries' views on the Global Goals, although only 16% will 'definitely' do so. 89% of respondents are prepared to report on their impacts on the Goals to clients and/or beneficiaries, although at present only 21% will definitely do so.

• Nearly two thirds of respondents are already working with civil society and policy makers on environmental, social and governance (ESG) issues relevant to the Goals, and many of those who are not would be willing to do so. However, two thirds of respondents are not aware of their governments' response to the Goals and investors feel they Iack mechanisms for communicating with governments.

• The main barriers to investors focusing on the Goals are Iack of data showing the relevance of the Goals to investors (cited as a barrier by 66% of respondents), the wideranging nature of the SOG framework (cited by 57%) and insufficient investee company transparency on ESG issues (cited by 55%).


Investors reported that overcoming these barriers would be helped by:
- lncreasing  the relevance of the Goals to investors, through more evidence demonstrating the advantages of taking action on the Goals, examples of actions investors can take, and linkages with other sustainability initiatives
- Action by regulators, such as providing incentives or legislating for better company reporting
- More transparent and consistent reporting by companies on ESG issues
- lncreased capacity to take action, through greater commitment to supporting the Goals from senior leadership teams at investment organisations
- lncreased  demand  for action around the Goals from clients and beneficiaries
- Support for acting on the Goals from others in the investment chain, such as sell-side Organisations
- Rewarding those acting with a long-term perspective


Based on this analysis we recommend  that investors and investor organisations facilitate action to support the Goals in a variety of ways. These include:
• Creating and sharing tools which allow investors to identify synergies between the Goals and their investment objectives.
• Publishing evidence  which demonstrates the impact of taking action araund the Global Goals on investment returns.
• Warking with other actors to encourage companies to disclose more and better data about their environmental and social impacts.
• lntegrating investors' reporting about their contribution to the Goals with other reporting frameworks, and sharing examples of how investors can report on their contribution to the Goals outside of existing reporting frameworks.
• Raising awareness of the Goals throughout the investment chain, through asking relevant service providers to take action on the Goals.
• Seeking clients' and beneficiaries' views about the Goals and reporting to them on actions taken.
• Working in partnership with the broader stakeholder community to advance the Goals by sharing knowledge and resources, and coordinating action.


United Nations (2015) Transforming our world: the 2030 Agenda for Sustainable Development AIRES/10/1 https://sustainabledevelopment.un.org/post2015/transformingourworld/pubilcation


To download the full report, please click here.

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