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9 May 2016

Transforming our world through investment

Jo Mountford, ShareAction
ShareAction's new report suggests that the involvement and commitment of private sector actors will be needed if we are to achieve the Sustainable Development Goals.
International Development

The Sustainable Development Goals are a set of 17 Goals for global development until 2030. The Goals are ambitious, attempting to address some of the biggest social, environmental and economic challenges facing people and the planet, and achieving them will require support from a wide range of stakeholders. In particular, there is a role for private sector actors to play and their contribution is likely to be crucial to achieving the Goals.

ShareAction is a charity whose mission is to make the investment system better serve savers, society and the environment. Last year, we conducted a survey of institutional investors across the globe to find out about their views on the Goals, and if they have plans to contribute to them. The results are shown in our recent report: Transforming Our World Through Investment: an introductory study of institutional investors’ role in supporting the Sustainable Development Goals. The survey results show that there is significant potential for investors to contribute to the Sustainable Development Goals, and that many investors are already doing so. For example, investors have been engaging with investee companies to encourage them to pay the Living Wage and tackle modern slavery in their supply chains, which contributes to Goal 8 (‘Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all’). They have also invested in medical technology that will help to expand healthcare provision in developing countries, which contributes to Goal 3 (‘Ensure healthy lives and promote well-being for all at all ages.’) The survey results also demonstrate that there are numerous benefits to institutional investors who support the Goals. 75% of survey respondents believe that taking action to support the Goals will bring them reputational benefits, 62% believe that aligning their investment practices with the Goals can offer opportunities to increase their investment returns, and respondents believe that taking action to support every Goal could help them meet their investment objectives.

The results clearly demonstrate that investors have a role to play in contributing to the Goals, and that they are likely to benefit from doing so. However, our survey also showed that at present many investors have not yet made plans around the Goals, and that often senior leadership at the organisation is not aware of the Goals. Even those investors which are making plans to contribute to the Goals face barriers to doing so, such as lack of information showing how the Goals are relevant to them, insufficient data about investee companies’ environmental and social impacts, or a lack of interest from clients and beneficiaries. If investors are to make a significant contribution to the Goals, these barriers and others will need to be overcome.

The report makes a series of recommendations for action which investors, investor organisations, and others, can take to help investors contribute to the Goals. These include the creation of tools to help investors align their investment portfolios with the Goals, engagement with companies about improving their reporting on environmental and social impacts, and raising awareness about the Goals throughout the investment chain, from individual savers to investment service providers. ShareAction will be working with a range of stakeholders to implement these recommendations and facilitate the increased contribution of institutional investors to these vitally important Goals.

Jo Mountford, ShareAction

Views expressed in this post do not necessarily reflect those of the Baring Foundation.