Are the world's largest investment firms unaware or uninterested in UN's vision for a fairer society?
Five years ago, the United Nations (UN) member states adopted a set of goals that aim to end poverty, protect the planet, and ensure peace and prosperity for all.
The UN Sustainable Development Goals (SDGs) are intended to be met by 2030, but a new survey shows that the global investment management sector has some way to go to support them.
Recently Deborah Debas, a responsible investment specialist at Desjardins, shared her thoughts on the WP Advisor Connect ESG event and hailed the SDGs as a good foundation for investors to back the companies of the future.
But banking group Standard Chartered’s research found that, among the top 300 investment firms, just 13% of their combined assets under management of $50 trillion are linked to the SDGs.
And the share of investments that are focused on North America and Europe are overweight at 64%, despite 88% of investors saying that emerging markets (EMs) outperformed developed markets over the last three years.
Asia, which includes a number of developed markets, accounts for just 22% of investments, with just 2% for the Middle East, 3% for Africa, and 5% for South America.
This lack of investment in EMs is putting the 2030 target for achieving the SDGs at risk but investing in these regions is seen as high risk and the pandemic has made it more difficult for EMs to achieve the investment they need.
Not mainstream
Some 55% claim the SDGs are not relevant to mainstream investment and 47% say investment in the SDGs is too difficult to measure. However, one fifth of investors admit that they were not aware of the SDGs.
“Much progress has been made in recent years to realise the SDGs, but this study makes clear the need to move faster,” said Simon Cooper, CEO of the banking group’s Corporate, Commercial and Institutional Banking division. “A seismic, unprecedented surge in private-sector investment – alongside public investment and commitments – will be required to bridge the gap and hit the 2030 SDG targets.”
The survey is included in a new report called ‘The $50 Trillion Question’ and includes fund managers, strategists, and EM specialists.
“There is no single answer to ‘The $50 Trillion Question’, but it is evident that investors need to expand their focus beyond developed markets if we are to achieve these goals,” urged Cooper. “Emerging economies offer investors a unique opportunity: strong returns combined with the chance to have a significant, positive impact. Now is the time to seize it.”
