Shaping the future of responsible investment – Zurich

Shaping the future of responsible investment – Zurich

Agreement by world leaders on the UN Sustainable Development Goals (SDGs) last year placed the 17 goals – and the 169 targets that underpin them – at the heart of the global effort to tackle poverty, protect the global environment, and reduce inequality.

Delivering on the goals will require action not only by government, but also the private sector and financial institutions – and the PRI is currently consulting on, among other things, how it might help its signatories better align their activities with the SDGs.

But attendees at the 10 Year Global Workshop in Zurichs, on 2 June, raised concerns over whether the SDGs would be appropriate metrics against which to measure investors’ progress.

Some argued that reporting against so many targets would be impractical. Others were concerned that the SDGs are aimed at governments, and were therefore not appropriate goals for investors. Another suggested that SDGs are aimed at emerging economies, rather than developed ones – although some SDGs are relevant globally.

These are legitimate concerns. However, there are strong counter arguments for considering alignment with SDGs. Some targets are more investment-relevant than others, such as those addressing climate change, gender equality and energy access. And, while the SDGs are directed at governments, those governments will depend upon the private sector to deliver against them.

In its recent evaluation of the first 10 years of the PRI, consultancy Steward Requeen noted that the PRI should be aiming for “real-world change”. Indeed, as our managing director Fiona Reynolds argued in PRI’s 2015 annual report, “for our impact on investors to be meaningful it needs to be reflected in their impact on companies”. The SDGs represent a potential mechanism for that impact, and therefore that real-world change, to be assessed.

Nonetheless, the SDGs do pose challenges for investors. Whether they provide suitable yardsticks for the PRI signatories remains to be seen.