Through the Sustainable Investing Open Access Initiative, Robeco shares its Sustainable Investing Intellectual Property to promote and encourage research and ideas. The platform highlights Robeco’s SDG Framework and Country Sustainability Ranking (CSR). The SDG framework offers free insight into individual SDG scores for corporate issuers.

This proprietary SDG Framework is a robust tool that systematically evaluates companies based on their performance across key SDG-related targets. A company’s overall performance across the most strategically relevant SDGs aggregates into an overall company SDG score. The resulting SDG scores are used to construct portfolios that pursue positive impact and avoid negative impact, thereby advancing sustainable progress in the economy, society and the natural environment.

Why are they relevant to investors?

SDG Investing is about impact investing. This differs from ESG integration, which focuses on avoiding financial risks that stem from poor performance on environmental, social and governance issues. SDG scores can identify which companies are expected to have significant negative impact and which ones can or will provide sustainable solutions.

1. Investors indicate that they want to align their investments with the SDG goals, now and in the future, with 18% saying they had made it a high priority. A further 40% said they would consider doing so over the next two to three years.

2. SDG Investing lets investors zoom in on their own goals. With 17 SDGs to choose from, there’s no shortage of issues that an investor can use to zoom in on their own ambitions, allowing them to direct and manage exposure to their chosen SDGs. This has helped make sustainable investing something specific and measurable.

3. Achieving the goals leads to massive business opportunities as it means investing in the companies whose products and services can progress them, from making telecoms accessible in remote areas to rolling out healthcare and education facilities to a wider populace. Some companies and sectors are naturally more attuned to contributing to the SDGs than others, which in turn has directed investment flows.

4. We can identify how companies contribute to the SDGs when they make products or offer services that help achieve one or more of the 17 goals. Some business by their nature contribute to particular SDGs, while others may be better placed to contribute to a whole theme or bucket, such as meeting basic needs

All in all, the SDGs provide a framework to define a sustainable philosophy and priorities at a corporate level, track progress over time, and use a consistent reporting methodology that can be applied across the majority of asset classes.

 

Guest contribution by Robeco.

Join Robeco on October 3 at Building Bridges 2023 to learn more about the Sustainable Investing Open Access Initiative.

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