On September 25th, 2015, the global community represented by all 193 member states of the United Nations (UN) adopted a set of goals to end poverty, protect the planet, and ensure prosperity for all as part of a new sustainable development agenda. The 17 Sustainable Development Goals (SDGs) represent the globally agreed World’s most pressing environmental, social and economic issues. All countries are concerned and will be affected in one way or another. According to Principles for Responsible investment (PRI), the UN Commission on Trade & Development (UNCTAD) has estimated that US $5-7 trillion per annum up to 2030 is necessary to achieve SDGs.
As investment professionals, it is our responsibility to care about future generations. This means protecting their future assets, growing their capital, and also doing our best to leave them in a better place and in a safer world. We can do this by investing in companies not only with the highest Environmental, Social and corporate Governance (ESG) scores but also those considering the SDGs as their core strategy. It is clear to us that this is the path to follow.
Appetite to invest in a sustainable manner is growing significantly. Our clients recognize the importance of investing in companies with the highest quality of governance, taking care of their staff, adjusting their strategies to new constraints and regulations. Sustainability is not a fashion, it is a reality that we must all consider while building our asset allocation.
Understanding the impacts of climate change as well as the principles of sustainable investments is key to performance for the coming years. Even if some still dispute the scientific aspect of climate change, incidence of natural disasters around the World will continue to increase and have important impact on different economies.
The World is experiencing profound changes, as we head toward the end phase of the present industrial period. Disruption caused by new technologies such as renewable energies, batteries, smart materials, etc will leave no room for companies not open-minded enough to recognize these changes. Not adapting to new regulations could have an immediate impact on earnings and shareholders profitability. Quality and sustainability when investing will be major factors to generate outperformance.
Our recent success in partnering with the World Bank (International Bank for Reconstruction and Development or "IBRD", rating AAA/aaa) to promote an investment solution through an Equity Linked Bond with the SDGs criteria illustrates well the growing interest of the banking community for sustainable and responsible investments. Our clients want to take an active role in shaping our future by investing in a