latamen
Investors ramp up investments in the SDGs

Investors ramp up investments in the SDGs

13-04-2022 | Insight
A majority of investors plan to increase their focus on the Sustainable Development Goals (SDGs), the Robeco Global Climate Survey 2022 has found.
  • Jan Anton van Zanten
    Jan Anton
    van Zanten
    SDG Strategist

Speed read

  • 63% of investors have climate change as a priority for SDG investing today
  • Half are following more holistic goals for governance and basic needs
  • Rising interest globally and regionally in natural capital over next two years

The second annual survey of 300 financial investors showed rising adoption of the full range of 17 goals over the next two years, as they are used to target specific investment objectives such as climate change or empowerment.

Some 18% of investors said they had made it a high priority to align or benchmarking their portfolios with the SDGs, while 22% indicated they were doing this, but as a lower priority. A further 40% said they would consider doing so over the next two to three years.

And as has been commonly found in SDG investing, some of the goals are more popular to target than others, with a core focus on the favorite objective of tackling climate change itself (SDGs 7 and 13), but surprisingly with less interest in the related issue of natural capital (SDGs 12, 14 and 15).

Stay informed on Sustainable Investing with monthly mail updates
Stay informed on Sustainable Investing with monthly mail updates
Subscribe

A blueprint for investors

“The SDGs provide a blueprint for sustainable investors, and this survey shows that many investors are using the goals for exactly that purpose,” says Jan Anton van Zanten, Robeco’s SDG Strategist. “In most cases, investors indicate that they are trying to align their investments with these goals, now and in the future, though with differing objectives.”

“It’s encouraging news because integrating these global goals into investing strategies can be a daunting task. How do you know which goals are positively or negatively impacted by the companies you might invest in? This requires research to identify the companies that can really make a difference – and of course, this is where we come in.”

“Robeco’s SDG Framework provides a thorough assessment of companies’ impacts on the SDGs and  enables us to align our investments with positive impacts, on the entire SDG agenda, or on specific goals if required. That way, we pursue financial returns and support companies that contribute to a better planet for all.”

Five buckets

The 17 goals were divided into five buckets for the survey – climate change, governance, basic needs, empowerment and natural capital – so that the following question could be answered:

“Which of the following UN SDGs do you see as relevant to your overall investment approach today, and which do you expect to be relevant to it in the next 2 years?”

Investor interest in the five buckets for the SDGs today and over the next two years. Source: Robeco Global Climate Survey 2022, CoreData.

The survey showed that 63% of investors are focused on climate change investing today, while 55% will make it a priority over the next two years. Investments will target strategies that can contribute to two of the goals: SDG 7 (affordable and clean energy) and SDG 13 (climate action).

There was a surprisingly high commitment to support governance, with 50% of investors saying they are targeting it now and 46% committing to it over the next two years. These target two SDGs that are normally less popular as they are seen as more difficult to invest in: SDG 16 (peace, justice and strong institutions) and SDG 17 (partnerships to achieve the goals).

More holistic approaches

For the basic needs bracket targeting some of the most pressing issues for society such as poverty and poor health, almost half (46%) said they are investing in the relevant goals now, rising to 51% who will do so over the next two years. These target SDG 1 (no poverty), SDG 2 (zero hunger), SDG 3 (good health and well-being), SDG 6 (clean water and sanitation) and SDG 11 (sustainable cities and communities).

Empowerment similarly follows the more holistic societal issues such as reducing inequality. These cover SDG 4 (quality education), SDG 5 (gender equality), SDG 8 (decent work and economic growth), SDG 9 (industry, innovation and infrastructure) and SDG 10 (reduced inequalities). The survey showed that 40% will target the five relevant SDGs now and 52% over the next two years.

The biggest shift was seen in natural capital, where only 24% of investors are targeting it now, but 53% are planning to do so over the next two years. These target SDG 12 (responsible consumption and production), SDG 14 (life below water), SDG 15 (life on land) where experience has shown it can be difficult to find suitable listed companies to invest in.

Regional differences

Regionally, there are differences in preferences between investors located in Europe, North America and Asia. Climate change is the most focused category of investors across all regions, though Europe gives this a higher priority (76% today) than Asia (57%) and North America (54%).

North America has the highest interest today in governance (55%) but very little interest in natural capital, with only 14% of investors saying they are prioritizing it today. Asia is most interested in climate change (57% today) and least interested in natural capital (24%).

Perhaps surprisingly, as Europe is the home of many governance institutions including the European Court of Human Rights, the region lags behind Asia and North America in investor interest in this bucket. Only 47% of European investors have it as a priority today compared with 49% in Asia and 55% in North America.

The regional differences in investor interest for the five SDG buckets. Source: Robeco Global Climate Survey 2022, CoreData.

Views of 300 investors

The results are contained in the 2022 Robeco Climate Survey, which gathered the views of 300 global investors on their approaches to decarbonization, climate change, biodiversity and engagement. It is the second survey of its kind following the success of the 2021 report.

The research was carried out via an extensive global online survey conducted by CoreData Research during January 2022. Collectively the investors questioned have assets under management of USD 23.7 trillion, ranging from under USD 1 billion for the smallest to over USD 1 trillion for the largest.

What are investors doing about the climate?
What are investors doing about the climate?
Download here our 2022 Global Climate Survey
Subjects related to this article are:
Logo

Important information

The Robeco Capital Growth Funds have not been registered under the United States Investment Company Act of 1940, as amended, nor or the United States Securities Act of 1933, as amended. None of the shares may be offered or sold, directly or indirectly in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act of 1933, as amended (the “Securities Act”)). Furthermore, Robeco Institutional Asset Management B.V. (Robeco) does not provide investment advisory services, or hold itself out as providing investment advisory services, in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act).

This website is intended for use only by non-U.S. Persons outside of the United States (within the meaning of Regulation S promulgated under the Securities Act who are professional investors, or professional fiduciaries representing such non-U.S. Person investors. By clicking “I Agree” on our website disclaimer and accessing the information on this website, including any subdomain thereof, you are certifying and agreeing to the following: (i) you have read, understood and agree to this disclaimer, (ii) you have informed yourself of any applicable legal restrictions and represent that by accessing the information contained on this website, you are not in violation of, and will not be causing Robeco or any of its affiliated entities or issuers to violate, any applicable laws and, as a result, you are legally authorized to access such information on behalf of yourself and any underlying investment advisory client, (iii) you understand and acknowledge that certain information presented herein relates to securities that have not been registered under the Securities Act, and may be offered or sold only outside the United States and only to, or for the account or benefit of, non-U.S. Persons (within the meaning of Regulation S under the Securities Act), (iv) you are, or are a discretionary investment adviser representing, a non-U.S. Person (within the meaning of Regulation S under the Securities Act) located outside of the United States and (v) you are, or are a discretionary investment adviser representing, a professional non-retail investor. Access to this website has been limited so that it shall not constitute directed selling efforts (as defined in Regulation S under the Securities Act) in the United States and so that it shall not be deemed to constitute Robeco holding itself out generally to the public in the U.S. as an investment adviser. Nothing contained herein constitutes an offer to sell securities or solicitation of an offer to purchase any securities in any jurisdiction. We reserve the right to deny access to any visitor, including, but not limited to, those visitors with IP addresses residing in the United States.

This website has been carefully prepared by Robeco. The information contained in this publication is based upon sources of information believed to be reliable. Robeco is not answerable for the accuracy or completeness of the facts, opinions, expectations and results referred to therein. Whilst every care has been taken in the preparation of this website, we do not accept any responsibility for damage of any kind resulting from incorrect or incomplete information. This website is subject to change without notice. The value of the investments may fluctuate. Past performance is no guarantee of future results. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. For investment professional use only. Not for use by the general public.

I Disagree