Insights

The Value of SDGs

 

The United Nations Sustainable Development Goals (SDGs)  are a plan to promote prosperity while protecting the environment. The 17 interconnected goals set out how to deliver global sustainable development. While governments have developed the goals and signed up to their implementation, government action alone will not be enough to achieve them; private investor capital is needed and indeed the SDGs aim to foster collaboration within and between international private and public stakeholders. The SDGs help investors like us identify areas where capital can address the world’s biggest problems. They have become a universal framework for impact investing. Given their ubiquity, the SDGs are well positioned to help bring about systems change.

Investing in companies that help achieve the SDGs is about more than just doing the right thing for society, it’s also a smart investing strategy. SDGs are important because they help:

  • Identify Opportunities. The Business and Sustainable Development Commission estimates that achieving the SDGs could produce over US$12 trillion in new market opportunities in areas such as food, agriculture, cities, energy, materials, health and well-being and could create over 380 million jobs.
  • Avoid Risk, Find Resilience. Many companies are now expected to consider the SDGs as part of their overall decision-making, with growing recognition that continuing the practice of externalizing costs would expose them to policy and reputational risks. The SDGs provide a framework for analyzing the externalities that companies should internalize to be more resilient to future crises, more stringent regulations, growing societal pressures and stakeholder capitalism.
  • Create Action. Through direct engagement and allocation of capital, investors can collectively push companies for more positive impact and improvement towards the commonly understood SDGs.
  • Evaluate Impact. Corporate revenues and operations can be assessed, measured, and mapped based on which SDGs they impact favourably or adversely.