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Investing to advance Sustainable Development Goals

Investing to advance Sustainable Development Goals

08-11-2017 | Insight

Robeco and RobecoSAM are taking action to ensure they can actively promote the United Nations’ Sustainable Development Goals (SDGs).

  • Jacob  Messina, CFA
    Jacob
    Messina, CFA
    Head of Sustainability Investing Research, RobecoSAM

Speed read

  • New paper outlines plans to advance SDGs via investing
  • Asset managers and business in general taking a wider role
  • Engagement and fund holdings can make a difference

The UN launched 17 SDGs in 2015 that set goals for a range of issues ranging from ranging from improving water quality and making food sources more reliable, to achieving more sustainable energy and alleviating poverty in emerging markets. They form part of the 2030 Agenda for Sustainable Development to which 193 countries are signatories.

The commitment by Robeco and RobecoSAM to further these aims are explained in an article entitled ‘Accelerating Impact: Advancing Sustainable Development Goals through Investing’. In practical terms, both investors believe that it can be achieved through methods such as engaging with users of fossil fuels to encourage them to switch to renewables, or by offering funds that directly invest in sustainable practices.

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Underlying drivers

“The SDGs provide a unique opportunity to demonstrate our capacity and progress in understanding the underlying drivers of sustainability,” says Jacob Messina, Head of Sustainability Investing Research at RobecoSAM.

“Since the launch of the SDGs, we have been reviewing what they mean for our approach to sustainability investing. This paper describes the steps that we have taken to date, and some insight into our future aims.”

A main tenet of the SDGs is that they re-distribute responsibility for economic and social progress from the exclusive realm of public agents including governments to a wider base of stakeholders that include corporations, asset owners and private investors. The SDG framework significantly increases the role of business and finance in advancing social, economic and human development.

“Put together, these have major implications for the future direction of sustainability investing,” says Messina. “We already know that sustainability is gaining momentum: business support for sustainability is starkly evident in the world’s reaction to the COP 21 climate change agreement in Paris.”

“More specifically, industries are responding in ways that would have been unheard of just a decade ago. Oil and gas companies are diversifying their business models towards cleaner energy alternatives; electric utilities are setting renewable energy targets for power sourcing; and automotive manufacturers are announcing large-scale plans for electric vehicle production.”

A joint effort

As pioneers of sustainability investing, Rotterdam-based Robeco and Zurich-based RobecoSAM already offer products that clearly contribute to the SDGs, such as the RobecoSAM Smart Energy Fund. They have spent many years collaborating on sustainability issues from across the spectrum.

One proven way of doing this is through Robeco’s engagement programs. For example, the engagement theme ‘Environmental Challenges in the European Electric Utilities Sector’ actively encourages electricity utilities to implement ambitious environmental strategies, particularly in adopting renewable energy sources.

Both investors plan to go the extra mile and take the SDG approach much further, in a variety of innovative ways that are fully explained in the article.