UN SUSTAINABLE DEVELOPMENT GOALS
WHAT ARE THE SUSTAINABLE DEVELOPMENT GOALS?
In September 2015, the global community - represented by all 193 member states of the United Nations (UN) - adopted the Sustainable Development Goals (SDGs). The 17 SDGs and 169 individual targets will guide the global community’s sustainable development priorities from now until 2030 and seek to “stimulate action […] in areas of critical importance for humanity and the planet”.
The UN Commission on Trade and Development (UNCTAD) has estimated that meeting these targets will require US$5-7 trillion in investment each year from 2015-2030. But the UN and member countries cannot deliver on the SDGs alone; only an estimated US$1 trillion annually will come from public funds, leaving a gap of up to US$6 trillion annually for private capital to fill.
ALIGNING RESPONSIBLE INVESTMENT WITH THE SDGS
Many PRI signatories believe that their investments in companies (and other entities) will only be profitable in the long term if societies and the financial system develop in an equitable and sustainable way.
Additionally, ultimate beneficiaries (participants in pension funds, clients of insurance companies, etc.) increasingly demand that all parties in the investment chain (markets, asset holders and managers) take their broader long-term interests, and those of future generations, into account.
The preamble to the Principles for Responsible Investment, signed by more than 1,750 signatories, states: “We recognise that applying these Principles may better align investors with broader objectives of society.” The SDGs act as welcome guidance as to what the “broader objectives of society” are, and should play an important role in the development of the responsible investment agenda for the years ahead.
Undeniably, current responsible investment practices contribute to the “broader objectives of society”, but the contribution is limited and achieving the SDGs through corporate responsibility and responsible investment will require a more dedicated approach. To meet the challenges of the SDGs, responsible investment should not just look at how ESG risks and opportunities affect the risk-return profile of an investment portfolio, but also how a responsible investment portfolio affects those broader objectives of society.
As such, the SDG agenda requires signatories to move from a mere process-based approach of material ESG integration towards an outcomes-based approach that, while achieving market-rate return on investment, explicitly aims to contribute to the sustainability challenges put forward by the SDGs.
The PRI's 1,750 signatories represent around one third of global private capital. To meet the SDG challenge, they would have to invest US$2 trillion annually in companies and other investments that directly link to positive SDG outcomes. By 2030, the deadline proposed by the UN, that should amount to cumulative 25% of assets under management having a direct positive contribution to the SDGs. These new flows of private sector capital will be crucial to meeting the global challenges put forward by the SDGs.
In 2017, the PRI published its-10 year strategy, our Blueprint. The SDGs are firmly embedded within the strategy as one of the nine pillars that will define our work over the next decade.
THE INVESTMENT CASE
THE pri's work
WHAT WE WILL DO
To better understand investors’ needs, interests and opportunities, the PRI needs to hear from signatories. For more information on our SDG work, contact Jake Goodman.