The latest SDG report for 2022 calls for “an urgent rescue effort for the SDGs,” noting: “the 2030 Agenda for Sustainable Development is in grave jeopardy…” with recent negative trends in:
“poverty eradication”
“essential health services”
Food access
“debt burdens”
And seemingly many of the environmental metrics
Among others.
Interestingly, the report notes that measurement data remains one of the big issues, noting as an example that “for 8 of the 17 SDGs, fewer than half of the 193 countries or areas have internationally comparable data from 2015 or later.” “Increased investment in data and statistics is urgently needed.” But does better data constitute a “rescue effort” in the presence of these notable and urgent declines? And why hasn’t all the money flowing into ESG / SDG investments not stemmed the negative trends?
A report by an interesting US fintech Util - Impact Investment Leaders and Laggards may indicate why significant investments into ESG / SDG funds have had so little impact (so far). They analyzed all US domiciled equity funds by their company holdings, and mapped the impact of each company’s industry and products on the 17 SDGs. Their summary findings:
“There’s no such thing as a ‘sustainable investment’…Almost every company, industry, and fund impacts some goals positively, others negatively.”
“The transition to a low-carbon economy is a case study in sustainability tradeoffs.”
As we pointed out in a recent post on mining: “Building renewables at necessary scale is a mine-digging, energy-burning, acid-leaching, waste-dumping business, the effects of which are — like climate change — distributed unevenly.”
“ESG [investing] diverts capital flows away from those countries in most dire need of investment.” Further, "ESG is biased towards large companies with reporting resource and against those in developing markets” that are “in urgent need of sustainable investment.”
Helpfully for those of us trying to identify funds that positively impact various SDGs, this report goes into detail on those funds that (currently) have the highest positive and negative exposures to each of the 17 SDGs. In the end these authors also indicate better data is part of the solution: “Only with comprehensive company, industry, and fund data can tradeoffs be understood and managed, and positive impact optimised.”