Five years ago today, the 193-member United Nations General Assembly came together to formally adopt the 2030 Agenda for Sustainable Development, an ambitious and far-reaching framework to deliver a more sustainable future for people and planet.
The 17 UN Sustainable Development Goals (SDGs) are a rallying call for companies everywhere to advance sustainable development through the investments they make, the solutions they develop and the business practices they adopt. For fund managers, the SDGs are a roadmap for the industry to act as stewards of capital on behalf of investors, to achieve more equitable, peaceful, resilient, and prosperous societies.
Five years on, Covid-19 threatens to reverse much of the progress that has been made in achieving the UN SDGs. With a third of the SDG timeline having elapsed and a decade to go, are we still on track to achieve the goals by 2030? What setbacks might the pandemic cause and how can investors help to bring about meaningful and transformative change?
The state of play
Even before Covid-19 struck, the SDGs represented a radical challenge for stakeholders to deliver on the ambitions set out by the UN in 2015. According to a recent report by The Lancet, Will the Covid-19 pandemic threaten the SDGs?, the world was off track to end poverty by 2030 under SDG 1 irrespective of Covid-19, with projections suggesting that 6% of the global population would still be living in extreme poverty by 2030. Recent estimates suggest that Covid-19 could add 71 million additional people to this figure, due to the economic consequences of the coronavirus.
This is just one example of the ways in which Covid-19 will make it harder for us to achieve the UN SDGs, with considerable challenges arising out of the social and environmental costs of the pandemic.
See also: – The danger of SDG washing
Against this backdrop, it is vital that investors continue to mobilise capital, supporting companies and communities over the long-term to generate sustainable solutions for both the current crisis and beyond.
Achieving the UN SDGs: An integrated response required
Covid-19 has highlighted the heavily integrated, interdependent nature of our world, whether it be our health, economies, social systems, governments or environment.
In similar vein, the UN SDGs acknowledge that the challenges we face are inherently connected.
Each goal is multi-faceted and two seemingly different targets can often be combined in a single goal. For example, climate action (SDG 13) emphasises the need to improve education. At first, this may at first appear incongruous with tackling climate change. Upon closer inspection however, the need for improved education and awareness around mitigation, adaption and impact reduction is an essential step in taking action against climate change over a long term horizon.
As investors, it is our role to identify where these points of integration exist and act accordingly as a conduit for capital to deliver resilience, innovation and long-term growth.
The case for investing in the UN SDGs
The pandemic is causing such widespread social and economic hardship and there is a growing sense that it could be a pivotal moment in history that will precipitate lasting change. How does this affect the outlook for sustainable development and investment?
Although we cannot understate the scale of the challenge, we are confident that many of the changes will be positive for sustainable investment for the following three reasons.
First, there are some things which are not changing. At the heart of our investment approach is the consideration of four environmental and social megatrends – climate change, resource constraints, population growth and ageing demographics. None of these megatrends are changing course and present substantive investment opportunities for us to deliver better solutions to the challenges we face.
Second, there is evidence of strong political commitment towards sustainable development from numerous governments. We anticipate that many of the political and regulatory changes we see will be aligned with supporting and accelerating this agenda. More governments are recognising that sustainable development is good for growth, good for jobs and good for economic resilience – particularly at a time of acute social and environmental stress.
Third, but perhaps most important of all, is innovation. As investors we can see what companies around the world are focusing on in terms of innovation; and what we see excites us. More and more companies are aligning their innovation with sustainable development objectives. Based on these innovation pipelines we anticipate the next decade is going to be one of momentous change. We see a decade of clean energy and electrification. We see breakthroughs in battery technology and widespread adoption of electric vehicles. We see a decade of digitalisation and hyperconnectivity which will enable new ways of organising our economies and promote greater efficiency and circularity across multiple industries.
Instead of undermining it, we are hopeful this crisis will continue to highlight the attractiveness of sustainable investing and how it leads to better outcomes, not only for investors but also for the environment and society. If it does so, there is every reason to believe that the UN SDGs can be achieved within the next decade.
