Doing well by doing good 2018: Bigger strides for sustainable investing

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This year saw more governments and businesses than ever before put the United Nation’s Sustainable Development Goals (SDGs) at the heart of their development plans.

As 2018 begins, how on track is implementation of the 2030 global goals, and what does 2018 hold for sustainable investment?

Despite major advances, the UN’s 2017 annual progress report on SDGs warned that unless the speed of progress is stepped up, the 17 goals to be achieved by 2030 will be missed.

“Implementation has begun, but the clock is ticking,” said UN Secretary-General Antonio Guterres. “The rate of progress in many areas is far slower than needed to meet the targets by 2030.”

In November, a UN report praised countries that are increasingly using SDGs to tackle poverty and address inequalities within their national development plans. More than 60 nations voluntarily reported on their implementation of the 2030 Agenda for Sustainable Development.

However, a funding gap of nearly $2.5 trillion must be bridged if the 2030 goals are to be made a reality. The UN’s development program sees impact investment as a key way to close this gap.

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It’s a view shared by UBS, the world’s leading global wealth manager.

“It’s no longer a niche market,” said Sergio Ermotti, UBS group CEO. “Impact investment is an important business driver and, more importantly, it is a business driver because clients want it.”

UBS is launching a series of investment products aligned to the 17 SDGs. These will be linked to sustainability and impact-screened indices including on global sustainability, social equality-based LGBTQ and an index linked to the environment and clean energy. A portion of profits will be donated to philanthropic foundation UBS Optimus Foundation.

UBS’ investment bank alone now has more than one-third of its assets in sustainable or impact investments whose value hit the $1 trillion mark for the first time in 2017.

So, what else is on the agenda for sustainable development in 2018?

First up, at the end of January it’s the annual World Economic Forum (WEF) meeting in Davos, Switzerland. This year’s theme is “Creating a Shared Future in a Fractured World.”

The WEF has been mobilizing business leaders around SDGs as recognition grows that if the goals are to be reached, a mixture of private and public-sector capital is needed. Countries will be reaffirming their commitment to SDGs while recognizing that stronger partnerships and cooperation are needed.

For the first time, it’s an all-women line-up co-chairing the Davos event, including IMF Director Christine Lagarde and IBM Chief Executive Ginni Rometty.

Gender equality is also high on UBS’ priorities in 2018. Last year, the global bank announced a partnership with Rethink Impact, a venture capital investment fund investing in gender diverse, tech-enabled companies working to solve the world’s biggest challenges based on the UN’s global goals

Gender-lens investing continues to attract growing interest. It involves investors putting their money into companies that improve the lives of women and girls as well as having more women represented at every level in business, from design teams through to the board of directors.

“Listed companies with a greater number of women on their boards have on average delivered bigger returns to shareholders,” says Rina Kupferschmid-Rojas, head of sustainable finance at UBS & Society.

In March, the Impact Summit Europe takes place in The Hague. With impact investing now the fastest growing investment strategy in Europe, the conference aims to “catalyze private institutional capital” to support the financing of SDGs.

New York is the host for the SDG Investment Fair in April. The fair will showcase initiatives on scaling up investment in SDGs and promote policy dialogue between governments and the investor community to help facilitate deals on SDG investments.

In July, the UN hosts a three-day high-level political forum (HLPF) on sustainable development to follow up and review the 2030 Agenda. As part of this, member states are encouraged to submit Voluntary National Reviews to demonstrate how they are meeting their commitments to achieve the 17 goals.

The challenge over the next 12 months will be how to increase public-private cooperation and scale up impact investment opportunities in order to get back on track for meeting the global goals by 2030.

Source: CNBC

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