Incorporating sustainable impact in your investment process
Institutional investors are increasingly looking for ways to steer capital towards companies and projects that provide solutions to major social and environmental challenges, but achieving impact at scale can be a challenging proposition. The United Nations Sustainable Development Goals (SDGs) provide a useful foundation for scalable impact, representing a broad consensus of global stakeholders around 17 ambitious development goals.
MSCI ESG Research has developed a new framework designed to allow investors to measure their current exposure to listed companies providing sustainable impact solutions. Relying on the SDGs, we grouped the 17 goals into five actionable impact themes: Basic Needs, Empowerment, Climate Change, Natural Capital and Governance. From there we developed a detailed taxonomy of solutions and estimated companies’ revenue exposure to these products and services with options for applying minimum ESG standards to minimize exposure to negative impacts and maintain minimum governance standards.
MSCI ESG Sustainable Impact Metrics covers over 2,500 companies for social impact themes and over 8,500 companies for environmental impact themes. The MSCI ACWI Sustainable Impact Index, which leverages the data, is designed to identify companies with high net exposure to sustainable impact themes while meeting minimum ESG standards.