UN Sustainability Goals: A Road Map for Impact Investing
Thursday, February 2, 2017
Equity investors are increasingly thinking about how their decisions affect society. The United Nations’ Sustainable Development Goals (SDGs) provide a good road map for identifying investments that can make an impact—and generate profits as well.
The UN SDGs represent an aspirational view of what the world could look like by 2030. Introduced in September 2015, the 17 goals and 169 specific targets address areas of critical importance to humanity, including eliminating poverty and hunger, improving access to education and healthcare, and addressing the negative impact of climate change (Display). Crafted and agreed to by 193 developed and developing nations, the SDGs attempt to build on the earlier Millennium Development Goals and accomplish what they did not achieve.
The SDGs are not without controversy. Critics argue that there are too many individual targets, while some goals lack focus, are vaguely worded, or are difficult to measure and track. Some goals are seen as too expensive to implement or even contradictory with other goals. There is some truth to each of those claims.
But does that mean that there is no value in the SDGs or that they are not relevant for investors? We’d say just the opposite. In our view, the SDGs provide a powerful investment framework for active equity investors looking to achieve strong long-term investment results and also have a positive societal impact. Despite the complexities, we view the SDGs as a 15-year blueprint that highlights key opportunities for businesses—and attractive, differentiated trends for investors.