A 2015 survey of PRI signatory investors found that 84% of respondents would allocate capital to investments supporting the SDGs, and 89% would support regulatory reforms that promote the SDGs. Investors are starting to look at the SDGs as a way to address growth opportunities and manage risks. New tools are being developed to help institutional investors measure their alignment with the SDGs, such as the MSCI ACWI Sustainable Impact Index. With an estimated cost of $ 3-5 trillion per year to achieve the SDGs in developing countries alone, financial actors, including investors and companies are expected to interact within the financial ecosystem to direct investment and capital in ways that deliver both financial returns and public-goods outcomes. A new initiative, Catalyzing Financial Innovation, lead by the UN Global Compact in collaboration with UNEP FI and PRI will seek to support this by identifying innovative financial products that have the potential to redirect private and public finance towards critical infrastructure and sustainable solutions. Despite all this, recent research out of MIT Sloan report that only 24% of surveyed Investor Relations (IR) professionals are asked by their organizations to tell investors about the value of sustainability to the company’s bottom line.
IR has a crucial role to play in responding to the growing appetite for sustainability information from investors and bridging existing communication gaps. Traditionally the IR function is responsible for the strategic, timely and accurate communication of the company's financial performance to the investment community. In turn, IR offers company management insights into capital markets to inform strategy setting and corporate decision-making.
When IR is actively engaged and integrated into sustainability planning, companies will be better able to understand and respond to the interest that both mainstream and the so-called Socially Responsible Investors have with respect to the sustainable development agenda. Additionally, as investors increasingly integrate ESG information into their investment analysis, IR will bridge the demands of the investment community for research and engagement on the SDG agenda with the company's own priorities.
Coming Soon: Spotlight on Research & Development (November 2016)