A tale of two COPs (and why, despite the negative noise, they do matter)
We look at what the latest COP developments mean for investors.
Sustainable development goals
Aligning investment with sustainable development
A blueprint for sustainable investing
In 2015, the United Nations developed a set of 17 global sustainable development goals (SDGs).
We believe these goals are a blueprint for achieving a better and more sustainable future for all.
The SDGs address major global sustainability challenges, including poverty, inequality, climate change, environmental degradation, peace, justice, and technological innovation. All these challenges need significant public and private investment by 2030.
The opportunity
The financing gap is the difference between the current level of funding and the amount of investment required to achieve the 17 goals. Research estimates that trillions of dollars in additional investments are needed annually to achieve the SDGs by 2030.
We view this gap as an opportunity for companies to address unmet needs. Businesses can help to tackle the most pressing issues facing the world.
In our view, companies are more likely to deliver superior long-term financial returns if they align their business strategy with the SDGs. Many companies will benefit from the rising demand for SDG-related products, services and infrastructure. These should contribute positively to society and the environment.
Selecting the desired SDG strategy
We offer four SDG-aligned strategies, which are based on asset class, region or reporting needs.
Asian SDG Equity
The UN estimates Asia Pacific countries will achieve less than 10% of their measurable SDG targets by 2030. For the most innovative businesses, this lack of progress creates a significant untapped market. It’s these types of companies in which we look to invest.
Emerging Markets SDG Equity
Emerging markets (EM) need more than $4.2 trillion in annual investment to achieve the SDGs by 2030. Our Strategy seeks to access this opportunity by investing in companies actively addressing the SDGs through their business activities and/or products.
Emerging Markets SDG Corporate Bond
Our 'profit with purpose' corporate bond portfolio provides access to EM sustainability opportunities while generating income at a lower risk compared to equities.
Global Impact Equity
A more diverse opportunity, we aim to provide long-term growth by investing in globally listed companies. These businesses must deliver attractive financial returns while intentionally developing products and services that contribute to quantifiable, positive social and environmental outcomes.
Reasons to invest in our SDG strategies
- People
We have experienced, cross-asset investment teams in multiple global locations. They leverage independent, in-house expertise from abrdn’s sustainability group.
- Rigorous and credible approachWe focus on companies that are making a positive contribution to evidence-based unmet needs. Additionally, a minimum of 20% (30% for global impact) of a company’s capital expenditure, operating costs, or research and development spend must be linked to the SDGs. We create an additional stock note, coined an ‘impact’ or ‘SDG’ note, which is written and peer-reviewed by our analysts and the wider SDG governance group.
- Policy supportRenewable energy and green technology have huge policy support for carbon neutrality in the EU, the US and China. There is also enormous potential to expand financial services across emerging markets. There are still 1.7 billion adults who do not have access to financial products or services. Our own exposure spans insurance companies, digital payment operators, micro-lenders, and housing finance companies.
- Diverse opportunitiesWe use an eight-pillar impact framework that distils the 17 SDGs into core investible themes. These eight pillars offer diversification across the goals. They help us to focus on a wide range of companies that provide local solutions to major global problems.
- Impact reportingWe deliver results in a reliable way, measuring against specific sustainable key performance indicators. In addition to case studies and pillar-level data, we also analyse a company’s impact, according to country and region.
Important information.
*Sustainable Finance Disclosure Regulation (SFDR)
Find out more about abrdn sustainable investing