Executive summary

  • The 17 United Nations Sustainable Development Goals (SDGs) set aspirations and targets for economic development, social inclusion and environmental sustainability – they are applicable in the developed and developing world.
  • Reaching these Global Goals require governments, businesses, investors and civil society to join together to take action. Unlike their predecessors, the Millennium Development Goals, the SDG framework calls on the private sector to deliver solutions.
  • Attention so far has largely focused on how businesses and investors can align their activities to specific SDGs. One mapping exercise has grouped the SDGs into five themes where companies have quantifiable business revenue (basic needs, empowerment, climate change, natural capital and governance).
  • Meanwhile the Business and Sustainable Development Commission has identified growth and investment opportunities around the SDG. The BSDC estimates the goals could be a key driver of economic growth and unlock opportunities worth up to $12tn per annum by 2030, or more than a tenth of global output. In addition, almost 400m jobs could be created across the food and agriculture, cities, energy and materials and health and well-being sectors.
  • On the other hand, failing to achieve the SDGs could create macro financial risks. A range of major social issues as diverse as the loss of biodiversity, smoking, obesity, illiteracy and food waste are estimated to burden output growth by a fifth.
  • Therefore the SDGs provide a roadmap for the likely path of public policy at an international, national and regional level. Consequently, investors are focusing on the SDGs not just to capture technological advances and associated business opportunities, but to ensure their investments are not in conflict with the likely path of public policy.
  • In some quarters there is impatience as to when asset managers will start integrating and implementing an active SDG strategy into their investment process. This is important since a commitment to the SDGs as well as broader ESG factors are necessary conditions for the long-term economic success of a country.
  • Up until now most attention has focused on private equity and debt funds such as China clean tech, US renewables or microfinance in emerging markets. But these investment opportunities can lack sufficient size for large institutions. Given investors want to scale-up their allocations, attention has turned to the fixed income and listed equity space for a solution.
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