Investors in alternative assets have to turn talk into action if they want to help solve some of the world’s most pressing environmental and social issues, a survey has discovered.
The overwhelming majority (91%) of such investors believe that integrating the UN’s Sustainable Development Goals (SDGs) into investment decisions could help increase access to education, fresh water and cleaner sources of energy.
Almost as many of the respondents (89%) believe that considering the goals when managing their assets could help improve risk-adjusted returns.
Yet only a quarter of the more than 200 pension schemes, endowments and insurers that responded to alternative investment specialist LGT Capital Partners’ survey integrate SDGs into their portfolios. A further 40% intend to use some of them when assessing companies within the next two years.
Goals 7 (Affordable and Clean Energy) and 13 (Climate Action) are most commonly used by those putting SDGs into their investment frameworks, according to ESG to SDGs: The Road Ahead, a survey looking at how investors integrate ESG into their portfolios.
It appears that investors have identified the SDGs as a framework to measure outcomes as policies change from managing risk to driving growth.
Other areas of interest picked up by the survey include investors wanting best practice standards and a broader range of data sources to aid the further integration of ESG into investment decision-making.
