Enhancing Sustainable Finance Through SDGs
The Growing World of Sustainable Finance
While impact investing started as a niche trend in the world of finance, it has since become an integral part of portfolio management and investment strategies. From ESG scores to alignment with the UN Sustainable Development Goals and more, the aim of investing with impact has moved from a trend to a requirement in recent years.
What are SDGs Exactly?
In 2015, the United Nations adopted 17 global goals calling for action to end poverty, protect the planet, and ensure that, by 2030, all people can live in peace and prosperity. The 17 SDGs address intersectional issues from world hunger, to climate action, to economic growth. Due to their intersectionality, action in one area will affect outcomes in others. Countries must approach the goals comprehensively and inclusively to foster development socially, economically, and environmentally. While the SDGs call specifically on countries to take action, the goals are also applicable across the private sector and can be used as a key tool in corporate social responsibility. Due to the intersectional nature of the SDGs, they can be used as a basis for investment, although they were never meant to be a framework for sustainable investment reporting.
How do SDGs Tie in with Investing
Central to the UN SDGs is a recognition of the importance of directing capital to areas and industries of growth, particularly those where the SDGs are concentrated. According to the UN, developing countries face a $2.5 trillion gap in financing. Organizations whose missions are centered around improving social and environmental welfare need more funding, and impact investing plays an essential role by addressing gaps within the nonprofit and for-profit spaces.
At Physis, we use the UN SDGs as a critical component of our platform; displaying key metrics as they relate to the SDGs in order to supplement portfolio analysis and to see how the investment is contributing to achieving these goals. This approach allows investors to tie their investments to global impact by prioritizing sustainable development as outlined by the United Nations.
Building a Narrative of Impact Investing
From the big institutions to the everyday investors, the demand for more than just financial reporting is fastly growing. A study from Morgan Stanley shows that 86% of investors want to understand the positive and negative impacts of their money.
At Physis, we move beyond standard portfolio analysis to bring insights on the UN SDGs and over 700 other unique indicators. We hope to enable a new narrative about money expanding beyond financial metrics. A whole story that can be told about the companies in your portfolio, from the new technology developed, to the use of recycled materials, to women in leadership positions. The Physis platform is the place to find enough information to prove and report the story of impact with one click through a static or dynamic report. All investors can track, measure, and understand the impact of their investments by simply searching for a company or fund in the DataHub.
An increasing number of investors are demanding impact with their money, the Sustainable Development Goals are one of the many fundamental sustainability practices key to building a sustainable future. The Physis platform was specifically developed to keep investors and regulators happy by providing proof of impact for asset/wealth managers, independent advisors, or family offices across the U.S. and the EU! Want to know the real story behind your portfolio? Join us.