Sustainability Champions are concerned with aligning their investments with a broad range of environmental, social and governance (ESG) issues. You may therefore want to consider investments in companies that are contributing broadly to the creation of a more sustainable global economy.
Why is it important to invest sustainably?
The United Nations (UN) Sustainable Development Goals Report 2022 warns that the world is facing a confluence of sustainability issues.
The COVID-19 pandemic, for example, pushed 93 million more people into extreme poverty and disrupted essential health services, resulting in a drop in immunisation coverage for the first time in a decade and a rise in deaths from tuberculosis and malaria, among many other impacts. Prolonged school closures have put 24 million learners – from pre-primary to university levels – at risk of missing out on the opportunity to be educated.
Humanity’s negative impact on the climate has also been accelerating. Increased heatwaves, droughts, wildfires and floods are affecting billions of people around the world and causing potentially irreversible damage to the Earth’s ecosystems. All the while, developing countries are battling record inflation, rising interest rates, and looming debt burdens, all of which disproportionately affect women, children, and the most vulnerable communities globally.
According to the UN Sustainable Development Goals Report, sustainability-focused policies, programmes and investments by nations, corporations and individuals alike can help the world to emerge stronger from these crises and prepare for the challenges ahead.
The UN’s Sustainable Development Goals
In 2015 the UN adopted the 2030 Agenda for Sustainable Development, a blueprint for delivering peace and prosperity for people and the planet. At its heart are 17 Sustainable Development Goals covering the most pressing environmental, social, and governance challenges the world currently faces.
Investing sustainably encompasses each of the 17 Sustainable Development Goals. You can explore them all in detail here.
How to invest if sustainability is important to you
Sustainability can be reflected in a diversified investment portfolio by choosing managers that use environmental, social and governance (ESG) metrics, and corporate engagement, to manage a broad range of sustainability risks, and identify sustainable opportunities, as part of their overall investment process.
Such an approach can help investors ensure that financially material sustainability risks are accounted for in their portfolios, while still giving them the chance to grow their wealth and achieve their long-term financial goals.
Citations
United Nations. The Sustainable Development Goals Report. 2022, https://unstats.un.org/sdgs/report/2022/The-Sustainable-Development-Goals-Report-2022.pdf
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