A new report published by the Principles for Responsible Investment (PRI) and PwC found that the majority of investors are failing to allocate funding opportunities to environmental or social projects and companies.
According to the report, the SDGs should serve as a list of material ESG factors that should be considered as part of investor’s fiduciary duty, while simultaneously boosting their financial performance by energising sustainable economies and markets.
“The SDGs will have an important impact on the future development of the economy and financial markets,” PRI’s director of investment practice and engagement Kris Douma said.
“As drivers of global GDP growth, they are relevant for investors. For institutional investors who consider themselves as ‘universal owners’, not meeting the SDGs will potentially bring macro financial risks.”
Just 17% of PRI signatories are funnelling investment into ESG areas such as renewable energy, clean technology and affordable housing. The report notes that current political and climate concerns may impact company accounts and investing into projects aligned to the SDGs would serve as a way to future proof portfolios.
The report also notes that the SDGs will be a fundamental driver of long-term economic growth, which would increase corporate revenues and equities and assets for investors. Notably, the report claimed that the SDGs would give investors a “common language” to shape sector-wide strategies.