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ESG

Are the SDGs truly investable?

Natixis surveys large institutional investors and produces framework to avoid ‘SDG-washing’.

natixis-SDG-investment-780

Last month Natixis released research from a survey of 42 investors – with $14 trillion under management – which have a framework for how to invest in line with SDGs that is more than just lip service.

Half of the investors surveyed, which included BlackRock, UBS Asset Management, LGIM and Robeco, said they have formal commitments to the SDGs, although those commitments varied widely.

“SDGs have become a ‘must-have’ for companies and investors, and in almost every green bond or social bond issue we will find SDG references and stickers,” says Cédric Merle of Natixis’ Center of Expertise and co-author of the research. “There are even now SDG-specific bonds. But investors were increasingly asking us about the reliability of these claims and how to measure whether the SDGs were really being targeted in an impactful and consistent way.  We were also sceptical about whether a lot of the usage of SDG labelling is simply ‘washing’.”

Over seven months, Merle and his team developed a methodology to help investors and companies best consider each SDG with regards to expectations and assessment and reporting.

Investability

Some of the SDGs are certainly deemed more investable than others at present.


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