Head of Responsible Investment, Roger Lewis, provides an overview of the historical context that led to the creation of the 17 UN Sustainable Development Goals (SDGs), which aim to improve lives, protect the planet, and build partnerships to achieve specific targets by 2030. Roger also offers insight into how investors can integrate the SDGs for long-term value creation.

The days before the SDGs: growth without guardrails

The 1990s brought an era of deregulation, corporate power, and belief in free-market capitalism. But lack of oversight fueled economic and societal inequality and environmental damage. Landmark scandals like Enron revealed deep flaws in corporate governance and an obsession solely with share price growth led to greed and deception throughout the organisation.

More recently, the opioid epidemic, which peaked in 2012, showed how profit motives can encourage unethical business practices that actively harm society by covering up harmful effects or encouraging addiction.

In addition, greenhouse gas emissions have steadily risen to over 420 parts per million, leading to observable climate shifts that will intensify in coming decades.  

These are all examples that underscore the need for responsible investment and business practices that consider long-term impacts.

Introducing the SDGs for collective impact

In 2015, the UN and countries around the world agreed the Sustainable Development Goals (SDGs) as a collaborative framework across governments, companies, and investors to tackle the world's biggest challenges. The 17 Goals aim to improve lives, protect the planet, and build partnerships to achieve specific targets by 2030.

What does this mean for governments, companies and investors alike?

• Governments must incorporate the SDGs into policy, report progress through national reviews and dedicate official development assistance spend
• Companies and its boards and managers – should identify priority Goals where they can drive impact and innovate around products, services and business models. Boards must oversee SDG alignment and progress

• Investors should evaluate assets based on positive SDG contributions and ongoing monitoring through engagement

How are the SDGs driving progress?

The SDGs provide a framework for peace and prosperity for the next 50 years. Though ambitious, their breadth catalyses integrated thinking and responsible business practices that serve both shareholders and society.

Financial advisors can elevate the SDGs with clients to focus investments around meaningful impact. Individuals and institutions alike will benefit from allocating capital towards asset managers that actively consider the Goals through strategies like ESG integration, thematic investing, shareholder advocacy, and impact measurement.

While broad in scope, integrating the SDGs creates focus for long-term value creation and achieving even incremental progress across the SDGs and their sub-targets will drive real change. Ultimately, we all have a role to play in driving innovation and stewarding resources to build a prosperous, inclusive and environmentally sound economy.

Roger Lewis is Head of Responsible Investment at Downing, find out more about Downing's approach to Responsible Investment