Sustainability: 17 goals that are changing the world

Gigantic amounts of investment – millions of new jobs

These comprehensive goals cover almost all areas of life. At the same time, they are a powerful economic driver. According to the UN, there is a deficit of $2.5 to 3 trillion a year among developing countries alone to achieve them.^[2] The international community expects 380 million jobs to be created worldwide in a wide variety of sectors if the targets are met. Meeting the targets should release up to $12 trillion dollars of economic output annually.^[3]

This makes SDGs an important factor in investment decisions. Churches and foundations in particular have always been very careful to invest their money in an ecologically and ethically sound manner. But other institutional and private investors are also increasingly looking to invest their money in sustainable companies and projects. The SDG criteria offer welcome guidance in this regard.

Additional topics addressed

What many investors appreciate about the SDG is that they go beyond the ESG criteria that have long been familiar in the financial sector, which focus primarily on the environment and climate protection (E), social standards (S) and good corporate governance (G). The UN's goals thus make the sustainable investment spectrum more multifaceted – not least because they address additional issues such as the fight against poverty and hunger, lack of education and promoting peace and justice.

Furthermore, in a classic ESG approach the primary aim is to exclude unsustainable companies from the investment universe. With the 17 UN goals, investors can select companies from the remaining universe that make a positive contribution to achieving the SDGs. This increases the incentive for companies to strengthen their commitment to sustainability and to expand products and services that contribute to the SDGs.

"Mobilising private investment was part of the concept from the very beginning," says Paul Buchwitz, manager of the DWS SDG Global Equities fund. "The United Nations knew that the 17 goals could not be financed using only government funds."

So, sustainable investment means constantly being active, and tracking down and classifying new developments. And that is how DWS has operated in this area for many years. As early as 2008, it was one of the first asset managers worldwide to sign the United Nations Principles for Responsible Investment (PRI). In 2018, DWS integrated SDGs into its ESG Engine, in-house software that uses data from five rating agencies specialised in different ESG criteria to create its own sustainability ratings, lists of best performers and possible warning signals.

ESG and sustainability have become an integral part of asset managers‘ research and analysis and an important criterion in investment decisions and new product development. The portfolio currently comprises more than 30 active and passive retail funds.