Dutch pension funds and other institutional investors are leaders in “SDG investing,” and are playing a key role in encouraging private investors to see the U.N.’s Sustainable Development Goals as a ($12 trillion, by one account) investment opportunity.
To that end, APG and PGGM, which collectively represent €567 billion ($657 billion) in assets under management, have developed “taxonomies” for classifying such investments. The two pension funds consider 13 of the 17 global goals to be investable.
Conspicuously left off that list is SDG №16 (“Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.”)
Peace and justice may be unfamiliar themes for mainstream private investors, but impact investors are finding a growing number of startups seizing on potentially profitable opportunities.
One signal: the growing number of SDG №16 investments in ImpactAlpha’s #Dealflow roundups.
- Omidyar Network pledged $100 million to bolster free media and combat hate speech, part of $220 million in grants and investments Omidyar has made over the last decade to drive accountability and transparency in government.
- A $3.5 million fund managed by the Latin American Alliance for Civic Technologies and backed by Omidyar and Fundación Avina is planning to invest in 20 Latin American startups driving citizen engagement in policymaking and government.
- The Knight Foundation, the Democracy Fund, and the Rita Allen Foundation are seeking startups with fact-checking mechanisms to counter propaganda and fake news.
- New Media Ventures and Matter have recently identified cohorts of new media startups targeting civic engagement, community empathy building, and data visualization.
- Impact robo-advisor OpenInvest has developed an investing themearound refugee inclusion that selects company stocks based on their commitments to support refugees.
- The Media Development Investment Fund, which backs independent media companies in regions hostile to a free press, recently made four investments from its new loan fund.
In the report, APG and PGGM said it was “not possible to contribute to this goal through investment activity.” (The research has not yet been published, but you can read about here.)
Among the most investable goals? SDG №11: Sustainable cities and communities, including public transit and other types of infrastructure that will already be familiar to institutional investors.
“The taxonomy is by no means perfect yet,” says APG’s Claudia Kruse, who said the intention was to “kickstart the conversation about a market standard for sustainable development investments.”