Advisors might want to get up to speed on a new set of goals driving the socially responsible investment movement.
Adopted in 2015 by 193 member states of the U.N., the Sustainable Development Goals (SDGs) set 17 goals for a livable planet. The goals include ending hunger and poverty; ensuring access to education, health care and justice; making cities more sustainable; gender equality; reducing inequality and protecting the environment.
Even if advisors don’t incorporate social screens in their investment process, the companies they own in portfolios will be impacted by the goals.
“In 20 years, I’ve never seen a sustainable development program catalyzed in the market like [the SDGs] have been,” said Will Kennedy, officer in charge and senior program officer of the UN Office for Partnerships.
“All the major companies are now figuring out how to line up corporate strategies against this agenda--that’s unprecedented,” Kennedy said during a panel discussion Friday at the annual SRI investing conference in San Diego.
“The SDGs are universal norms,” said John Streur, chief executive at Calvert Research and Management. “It’s the framework we hope to get people behind.”
Still relatively new, the standards have taken over “faster than anything we’ve ever seen” in the SRI space among both public companies and asset managers, said Steve Schueth, president of First Affirmative Financial and conference organizer, in an interview.
The U.N.’s goals are simple outcomes and easy for investors to understand, unlike the dry and academic environmental, social and governance factors, observers said at the conference.
By focusing on outcomes, the SDGs avoid the eye-glazing discussion of a screening process or scoring system, Schueth noted, so you can then identify companies working toward achievement” of the standards.
“Then you have a qualitatively different conversation with the client,” he said.