To coincide with Earth Day earlier this week, M&G’s Impact Investing team presented their SDG Reckoning Report on the progress of the UN’s Sustainable Development Goals (SDGs) at an event held in London last week.
The report revealed opportunities for investors to position capital to facilitate achieving the SDGs’ key objectives.
The UN set out the SDGs to align governments and businesses behind the common goal of improving the planet with 17 defined goals.
According to M&Gs research, almost all SDGs have seen little progress.
The goals focus on specific areas of environmental protection and societal improvements, such as improving diversity and reducing waste.
The critical analysis by M&G’s team shows many of these objectives are a long way off being met, and there is a material opportunity for investors to deploy capital with the specific aim of meeting the SDGs – while generating a financial return.
Speaking at an event hosted by M&G last week, Head of Impact Investing Ben Constable-Maxwell provided an insight into specific SDGs where the opportunity is greatest.
You may be surprised to learn environmental goals, including Life on Land, Climate Action, and Responsible Consumption and Production, have made little or no progress in recent years.
There is the suggestion the pandemic shifted attention – and capital flows – away from clean energy and carbon reduction to healthcare. Good Health and Well-being were one of only two SDGs to progress in recent years.
Fossil Fuels and lower renewable electricity generation
Factors curtailing progress in environmental goals were the increased use of fossil fuels in the wake of the pandemic and the reduction of renewable electricity generation as a proportion of total generation.
Not only do the UN SDGs 2030 goals highlight the opportunity in carbon reduction technology, but the Paris 2050 Net Zero goals also present a material opening for value creation.
Environmental investing is, of course, nothing new – Constable-Maxwell discussed other themes, including promoting financial inclusivity and enhancing the circular economy.
Investment in Healthcare and HealthTech businesses reached fever pitch during the pandemic and has been instrumental in progressing SDGs.
Greater adoption of the internet helped infrastructure targets.
M&G Positive Impact Fund
M&G has developed the M&G Positive Impact Fund specifically to generate a financial return in companies that produce a measurable positive impact on society, diversity and the environment.
Companies selected for this portfolio include SolarEdge which has helped avoid 23 million metric tonnes of emissions.
The Bank of Georgia provides banking services to 2.9 million people in a country transitioning from communism.
M&G identified a number of Moats for the Bank of Georgia which includes talent retention and access to capital in the region.