A US SIF Foundation report released Wednesday sheds light on how and why U.S. institutional investors use the United Nations Sustainable Development Goals.
While sustainable development goals were a relatively new concept when US SIF Foundation officials conducted their investor survey in 2018, "we expect to see a higher number of survey recipients — investment management firms and institutional asset owners — citing the SDGs as an additional motivation for sustainable investing in 2020 and beyond," Wednesday's report said.
The report, "Investing to Achieve the UN Sustainable Development Goals: A Report for the US Investor Community," is based on U.N. public reports, data on SDG bonds, climate bonds and SDG-themed equity funds, and interviews with investment management firms and institutional asset owners committed to sustainable investment. Of the 141 money managers, 56 firms, with a total of $2.15 trillion in ESG assets under management, said they considered the SDGs as a motivating factor in pursuing sustainable investing strategies.
Of the 92 institutional asset owners responding, 21 asset owners, representing $4 billion in ESG assets under management, cited the SDGs as a motivation, with interest prevalent primarily at smaller institutions, US SIF found.
The SDG report also noted the increase in green bonds and other asset classes with sustainable development theses, including private equity. For the fixed-income market alone, "there is a lot of evolution," US SIF Research Manager Chris Phalen, the report's author, said in an interview.
More investors are conducting mapping exercises with the SDGs that are most applicable to their firms, Mr. Phalen said. The report offers sub-targets and other indicators that offer "concise metrics" that would be helpful asset owners and other investors in the absence of a more robust system, he said.