Opportunity: SDG investing
Combining investment returns and contributing to concrete sustainability goals
The 2015 UN adoption of 17 Sustainable Development Goals (SDGs) was the first time in history the world had agreed a common plan to promote sustainable growth, advance social inclusion, and protect the environment.
Investors are now embracing the SDGs to contribute to a better world and underpin long-term investment performance.
SDG investing is about impact. SDG scores identify which companies risk causing significant negative impacts, and which ones are in position to deliver sustainable solutions.
SDG investing offers very clear benefits:
Investors can define their own goals and make them specific and measurable.
With 17 SDGs to choose from, encompassing the entire field of human endeavor, investors can zero in on what they consider most important.
Achieving the goals leads to massive business opportunities
as it means investing in the companies whose products and services can progress them. Some companies and sectors are naturally more attuned to contributing to the SDGs, which has directed investment flows.
We can identify how companies contribute to the SDGs
when they make products or offer services that help achieve one or more of the 17 goals. Some businesses by their nature contribute to specific SDGs, while others may be better placed to contribute to an entire theme.
Jan Anton van Zanten
Investors are shifting from avoiding ESG risks towards pursuing SDG impacts. 58% consider them a high priority over the three next years.
Investors increasingly prefer to align their investment priorities with SDGs, with 18% saying they had made it a high priority and a further 40% saying they were considering adopting this strategy over the next two to three years.
This is a direct consequence of the current shift to more advanced impact strategies. Using SDGs provides you with solutions to measure progress over time against sustainable objectives and a consistent reporting methodology that can be applied across the majority of asset classes – a necessity under the latest SFDR regulation.
Robeco is one of the frontrunners in this space. We have deployed our renowned research-driven investment approach and created a proprietary SDG Framework: a powerful tool that systematically evaluates companies based on their performance across key SDG-related targets.
Robeco is sharing its SDG expertise. We are opening up our SDG Framework to all stakeholders interested in SDG investing in order to improve it further. Robeco expects collaboration via the Open Access initiative to encourage understanding and adoption of SDGs, help investors mitigate risks and take advantage of opportunities.
Robeco has various funds that are using the SDG Framework, these include:
Robeco SDG Credits: One of Robeco’s first SDG products, with a three-year track record, which builds on the extensive knowledge and experience of our Credits team.
Robeco SDG Engagement Equity: This fund focuses on a concentrated selection of global companies where Robeco actively engages with management to optimize strategic alignment with relevant SDGs.
SDG Low Carbon Equity Indices: This fund is at the other end of the spectrum, providing a family of indices that seek efficient exposure to high impact stocks that have a positive contribution to SDGs.