SDG engagement rises among global investors

The UN’s Sustainable Development Goals (SDGs) are becoming increasingly important to investors around the world, an annual survey by professional services firm PwC has found.

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After questioning 162 private equity firms and other investors, it was found that 67% have identified what SDGs are most relevant to their investments, compared with 38% in 2016.

The number of investors that take a proactive approach to monitoring portfolio performance against the SDGs has also jumped from 16% to 43% during that time.

In addition, 35% of the respondents said they now have a team dedicated to environmental, social and governance (ESG) matters, up from 27% back in 2016.

PwC’s global private equity, real assets and sovereign fund leader, Will Jackson-Moore, said these are signs of “increasing maturity” in the development of responsible investment.

“Private equity houses and limited partners are driving genuine change,” he continued. “That is especially important as their role in global capital markets increases.

“It is heartening to see that responsible investment is seen as a matter for those at the heart of the investment process and needs to be supported by rigorous monitoring and reporting.”

The survey across 35 countries and territories also found that 81% of investors report ESG matters to their boards at least once a year, with a third doing this more often.

A massive 91% have a responsible investment policy in place or in development, compared with 80% in 2013, with three-quarters of these using key performance indicators.

Moreover, it was found that 76% are concerned about the impact of human rights abuses on their portfolios, with 83% worried about climate risk, although just 31% have acted on the latter.

“We are at the stage that we can see ESG genuinely driving returns, and enhanced ESG practices can potentially enhance multiples: it may well be the next big value lever," Jackson-Moore said.

“It is therefore vital for investors to recognise that, even if responsible investment may seem challenging, there are numerous solutions and frameworks that can be applied to achieve positive outcomes.”

 

Image credit: UN

Author: 

Chris Seekings is a reporter for TRANSFORM

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