Sustainable behaviour driving effective Investments.
While momentum is building among corporate issuers to contribute to the SDGs, we believe overall private sector progress is insufficient to achieve the 2030 Agenda. Many investors would like to allocate more capital to companies best aligned with the SDGs, but existing levels of disclosure make this difficult to do.
A key challenge lies in the identification and development of fit-for-purpose, comparable metrics that allow investors to evaluate the impact of their capital decisions, as many SDG reporting frameworks aimed at filling the gap between ambition and attainment are at an early stage of maturity.
PIMCO recently conducted a study on the quality of reporting on the UN Sustainable Development Goals (SDGs) for more than 240 corporate and financial issuers. The SDGs are a globally agreed sustainable development framework consisting of 17 goals and 169 targets to be achieved by 2030. The goals were adopted by all 193 members of the United Nations in 2015 as a global call to action for positive change.
The SDGs are important to investors as they can provide a framework for measuring impact in ESG (environmental, social, governance) investment strategies. But for this to work, investors need to be able to quantify and compare the contributions of each issuer to the achievement of the SDGs. To enable investors to make informed decisions and direct capital towards positive impact, companies need to publish relevant SDG performance data. Unfortunately, current corporate environmental and social disclosures make this difficult to do.
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