While many companies are aware of the United Nation’s sustainable development goals, with some mentioning them directly in their disclosure reporting, only 12 per cent of those referencing the goals actually set quantitative targets for meeting them, according to new research by PIMCO.
The research, which analyzed how 246 companies interact with the framework of the sustainable development goals, found 63 per cent of respondents included some mention of the goals in their disclosures and 55 per cent related the goals to direct actions they’re taking.
“To enable investors to make informed decisions and direct capital towards positive impact, companies need to publish relevant [sustainable development goals] performance data,” noted a release from PIMCO. “Unfortunately, current corporate environmental and social disclosures make this difficult to do.”
Published in 2015, the goals include numerous areas for potential global improvement, including combatting poverty, food insecurity, gender inequality and climate change. “Their appeal lies in the harmonization of three dimensions — social inclusion, environmental protection and economic growth — to form a globally agreed sustainable development framework,” noted the release.
The research also offered a case study of one company with exemplary reporting where the sustainable development goals are concerned. Spanish telecommunications provider Telefonica’s disclosure process demonstrated a thorough understanding of how the different goals are interconnected. It selected industry, innovation and infrastructure as its core goals to focus on, but also identified 11 additional ones. Prioritizing the goals most directly related to a company’s core business, while also recognizing the risks and opportunities related to other goals, paints a clear picture for investors looking to assess organizations based on the U.N.’s framework, the research noted.
Also on the theme of sustainability, the OPSEU Pension Trust is joining 107 global institutional investors committing their support to fighting climate change. In supporting a “just transition,” investors can throw their weight behind strategic global objectives like the Paris agreement and the U.N.’s goals. “The just transition provides a way for investors to better manage the systemic risks of climate change by linking the environmental and social dimensions of long-term economic performance,” the statement read.
Notably, the investors said the transition is aligned with their fiduciary duties because it involves capturing the social and environmental drivers of value creation, which serves the best interests of their beneficiaries. As well, the statement highlighted the importance of the material drivers of value creation as workforces and communities tackle climate change, in addition to the opportunities to generate return with new investments involving the social factors raised by climate change.
The statement comes on the heels of a similar commitment signed by 415 global institutional investors earlier this week, released in advance of the climate change conference in Katowice, Poland.