Institutional investors and the UN Sustainable Development Goals

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trees growing on coins in germination sequence with green graph / csr / sustainable development / business growth ©Weerapat Kiatdumrong /123RF Stock PhotosMSCI Inc. and the Organization for Economic Co-operation and Development have collaborated on a joint research paper to facilitate discussions about how institutional investors can implement the UN’s sustainable development goals in their strategies.

There are 17 sustainable development goals that aim to deal with challenges including climate change, income inequality and sustainable consumption. The target delivery dates for these goals is 2030. Yet, according to a press release by MSCI “…based on current development and private spending levels, the SDGs will not be attainable by 2030.”

The MSCI and OECD’s collaboration focuses on two goals. The first is creating a framework for discussion around investment options and the potential role of institutional investors in achieving the sustainable development goals. The second is developing a proof-of-concept illustration of a hypothetical index for institutional investors in public equity markets that targets sustainable development goal needs.

“Over the last few years, institutional investors have become increasingly interested in finding ways to deploy capital to solve global problems without the risk of sacrificing returns; however, we have not yet seen a large-scale shift in asset allocations towards the sustainable development goals,” said Meggin Thwing Eastman, executive director and head of ESG impact and screening research at MSCI in a press release.

“Together with OECD, we aim to propose a systematic framework that institutions can use to evaluate their portfolio’s societal impact and address any sustainable development goal gaps they identify.”

 

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