Set out to end all forms of poverty, fight inequalities and tackle climate change by 2030, the UN Sustainable Development Goals (SDGs) certainly aim high and wide.
While not legally binding, governments are expected to take ownership of the delivery of the SDGs. However, the goals recognise the importance of supporting sustainable development and that ending poverty must therefore coincide with strategies that build economic growth and address a range of social needs, including education, health, social protection and job opportunities, at the same time as controlling climate change and ensuring environmental protection.
The Business and Sustainable Development Commission, launched to explore how business, finance and civil society can contribute to achieving the SDGs, says that the opportunities in relation to food, cities, energy and materials, as well as health and well-being, could unlock more than $12 trillion in business savings and added revenue every year, approximately 10% of forecast global GDP in 2030. And this is something that has not been lost on the investment community.
Promisingly, since they officially came into effect on 1 January 2016, the SDGs have attracted plenty of attention from institutional investors. A coalition of Dutch and Swedish pension funds has committed to making Sustainable Development Investments in line with the goals, while other financial institutions have promised to integrate the SDGs in their approach to business, corporate governance and investment.
We believe that investor stewardship and the SDGs go hand in hand. In fact, the investor community can be a strong force in helping the goals become a success. It can put pressure on companies to take action to support the SDGs.
In our view, our engagement plan, which provides the blueprint of our stewardship goals and efforts, is well-aligned with the SDGs and supports each goal either directly – through support of a relevant target – or indirectly.
For example, our work with companies to reduce their exposure to climate-related financial risks helps to improve education, awareness raising and human and institutional capacity on climate change mitigation and so is directly aligned with SDG 13 of climate action. It also indirectly helps to reduce poverty over time, thus contributing to meeting SDG 1 of no poverty. Through our engagement on human rights and on pollution and waste management, we directly contribute to SDG 3 of good health and well-being, while our work on bribery and corruption, as well as conduct and culture, will directly assist in the achievement of SDG 16 of peace, justice and strong institutions. Pushing companies to have in place good supply chain management will indirectly contribute to better life below water and life on land, as per the SDGs 14 and 15.
Alignment of UN SDGs with the themes of Hermes EOS’ engagement programme:
In addition, because of the ESG integration and impact investing undertaken by our fund manager colleagues, we are also aligned with the SDGs through our investment approach.
As former UN Secretary-General Ban Ki-moon said: “Sustainable development is the pathway to the future we want for all. It offers a framework to generate economic growth, achieve social justice, exercise environmental stewardship and strengthen governance.”
Looking into 2017 – Our key engagement themes in the new year