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Special Report

Impact investing

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PRI in Person: The ongoing allure of the SDGs

“Sextant for the investor community”. “A gift from the UN to the world”. “A global to do list”. “A moral imperative but also an economic necessity”.

It has been evident for some time already that the UN Sustainable Development Goals (SDGs) have captured the imagination of institutional investors, and this was underscored at a conference of the Principles for Responsible Investment (PRI) in Berlin this week.

As well as recurring references throughout the event, the dedicated SDG panel featured a number of major globally recognised asset owners such as CalPERS from the US, ABP from the Netherlands, and Cbus, one of Australia’s largest superannuation funds.

CalPERS’ investment director for sustainability, Anne Simpson, argued that the goals were not only “a moral imperative, but also an economic necessity”, while Cbus’ Alexandra West, portfolio head for strategy and innovation, said that realising the SDGs would ensure a sustainable economy, and hence economic growth.

In Europe, Dutch pension fund managers APG and PGGM are arguably the forerunners when it comes to applying the SDGs. Earlier this year, they presented an SDG “taxonomy ”, the fruit of their work to assess the investability of the goals.

Speaking at the PRI in Person conference, Jose Meijer, vice chair of the board of ABP (APG’s main client) said the SDGs were “a gift from the UN to the world”.

They were an excellent fit for ABP, and would shape the world its beneficiaries live in, or want to live in, she added.

Inspired by the Dutch pension investors’ work, CalPERS has been mapping the SDGs to its portfolio and found “a strong degree of connectivity”, said Simpson.

She said what was missing was the means to measure impact, but indicated this was not yet a major concern.

“Necessity is the mother of invention,” she said.

There was a clear consensus among the panellists that the SDGs were a positive and useful framework for their pension funds, but Cbus’ West highlighted that integrating the goals into the fund’s investment approach was a challenging task.

“It’s very difficult to come up with an investment strategy based on the SDGs,” she said.

Indeed, shortly after the panel discussion, a representative of a French pension fund told IPE they wanted to align their approach with the SDGs, but were finding this difficult to do.

Conversations on the sidelines of the conference revealed a slightly more reserved stance on the SDGs than that expressed by the panellists.  

A representative from an Antipodean pension fund, for example, said it would feel “disingenuous” to somehow retrospectively map the goals onto a fund’s portfolio and investment strategy.

The head of ESG at a UK-based asset manager, meanwhile, expressed concern that investors as well corporates were “latching on” to the SDGs too quickly. 

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  • QN-2546

    Asset class: Real Estate Equity Fund (non listed).
    Asset region: Europe.
    Size: Total CHF 600m, approx. CHF 100-300m per fund investment.
    Closing date: 2019-06-28.

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