Impact Investing, Impact Finance, SRI & SDGs with CONNEXIS
Impact driven sustainable investment & finance is one of the key trends in international financial markets, primarily triggered through customer demand. Private & institutional investors like pension funds & insurance companies, but also asset managers & private banking services request the demonstration of positive SDG impacts or at least generally value driven products.
Sustainable Finance - From a Niche Market to Center Stage in Five Years
A 2017 TIAA survey among 1,300 US investors & advisors showed that 49% of investors currently own value driven investments while an additional 28% want to invest responsibly within 12 months. Over 90% of millenials even want to invest all of their funds responsibly.
In Switzerland, sustainable investment has grown 16 times in just 5 years, from a small niche (2014: CHF71bn) to a substantial share of the market (2019: CHF1,163bn) .
Risks & Opportunities, Hypes & Trends
This fundamental shift in customer demand poses significant risks, but also grand opportunities, for investors on the one hand as well as the financial services industry on the other hand.
With over 20 years of experience in the sustainability/CSR/ESG world and its leading role in the development of international standards CONNEXIS is the ideal partner and advisor for investors as well as financial service providers to
- Navigate the changing landscape pro-actively
- Differentiate between short term hypes and long term trends,
- Identify hard wired impact – positive or negative!
- Define science-based targets for strategic decisions
- Demonstrate contributions of climate change measures
- Monitor & disclose performance, e.g. via dashboard solutions or other data-based platforms
ESG Investing, Socially Responsible Investing & Impact Investing
ESG Investing integrates environmental, social & governance (ESG) standards & criteria into investment/finance decisions. This integration drives better ESG performance of investments (i.e. companies), while improving or safe-guarding investment performance/yield at the same time.
Scientific studies show that ESG investment strategies deliver equal or better financial performance compared to traditional (non-ESG) investment approaches.
Socially Responsible Investing (SRI) applies value driven criteria to investment decisions in order to exclude & include activities (e.g. weapons, alcohol, gambling, nuclear, coal, etc) from investment portfolios. SRI intends to balance investment performance with ethical principles.
Impact Investing - a more recent trend with particularly strong growth - requires the achievement of specific (measurable) outcomes (impacts) of financial decisions.
Sustainable Development Goals & Impact Investing / Impact Finance
In 2015 the UN General Assembly set the goal of achieving 17 sustainable development goals (SDGs) by 2030. These SDGs include far-reaching goals such as ending worldwide poverty and hunger, providing good health and education to everyone, as well as clean water, clean energy & climate action and the establishment of worldwide peace, justice & strong institutions.
Two years later, in July 2017, the UN added specific targets for each goal, along with indicators to measure progress towards each target. These specific targets & indicators turned the underlying conceptual goals into actionable individual targets.
Since 2017 the UN's SDGs have become a key bearing point for international ESG efforts. Especially impact investors and impact financiers apply these indicators to measure the contribution of their individual efforts towards achieving selected goals & targets by 2030.
Contributing to SDGs with CONNEXIS
It can be very challenging for companies and organisations to navigate the complex landscape of the Sustainable Development Goals and identify a productive approach of contribution towards their fulfillment by 2030.
In a structured, cooperative and transparent process CONNEXIS supports its customers in
- Selecting and ranking SDGs
- Defining productive KPIs
- Measuring & monitoring performance & progress as well as
- Communicating achievements