Steve Waygood, chief responsible investment officer of Aviva Investors, calls on the Exchanges to make sure investors have better data and disclosure on sustainability to allow them to improve the risk analysis of portfolio securities.
Last month, 150 world leaders gathered at the United Nations to set 17 new Sustainable Development Goals (SDGs) with some 169 targets, from ending hunger to providing water and sanitation for all. With an estimated cost of around $22 trillion attached to achieving these ambitious goals,1 we cannot expect governments and civil society alone to meet the challenge. It will need capital markets and global investors to play their part.
The good news is that momentum for sustainable investment is at a tipping point. Over 1,300 investors managing almost a quarter2 of world assets (around $60 trillion) have committed to the UN-supported Principles for Responsible Investment (PRI), and the global sustainable investment market is growing at around 9 percent3 annually.
However, there remains a failure by a majority of investors to turn these aspirations into action. Last month, for example, the PRI reported that only 43 percent of its signatories integrate ESG into the fundamental analysis of company valuations in equities.4
So what is holding them back?