Listed Equity Funds: From ESG to SDG through engagement

This series is supported by our partner Aegon Asset Management. It explores how financial institutions are using the SDGs in their financial products across a range of asset classes. The series also includes briefings on the move from ESG to the SDGs and the SDG Impact Standards.

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The business case for financial services aligned with the UN Sustainable Development Goals (SDGs), the world’s development agenda, is not fundamentally different from the case for environmental, social, and governance (ESG) considerations: they represent economic risks and opportunities.

The difference between ESG and the SDGs is that the former primarily represents considerations (e.g., climate change, gender and diversity) and associated methodologies for addressing these (e.g., exclusion, best-in-class selection) whereas the latter are goals (e.g., gender equality, affordable and clean energy).

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SDG Financial Products was launched at COP26 by GEFI and showcases commercial financial products that are aligned to the SDG in order to share learnings and grow the ecosystem of SDG aligned financial products across asset classes.

SDG Financial Products

The SDG Impact Standards provide guidance on developing an appropriate strategy, management approach, transparency and governance to assist businesses and investors in contributing positively to sustainable development and achieving the SDGs. The Impact Standards also provide a decision-making framework to make sense of existing relevant principles, frameworks and tools.

SDG Impact Standards

From ESG considerations to SDG alignment: More acronyms or better outcomes?

This series is supported by our partner Aegon Asset Management. It explores how financial institutions are using the SDGs in their financial products across a range of asset classes. The series also includes briefings on the move from ESG to the SDGs and the SDG Impact Standards.

Read more Insights

Scotland was among of the first countries in the world to adopt the UN’s Sustainable Development Goals (SDGs), the world’s official developmental agenda, in 2015. Later in 2018, to localise the SDGs, the Scottish Government launched a refreshed National Performance Framework. But more needs to be done to encourage financial institutions to consider SDGs in financial decision making.

Financial institutions are now offering financial products aligned with the SDGs. Some financial products explicitly labelled as ‘SDG’ have been introduced, such as HSBC’s SDG Bond and Federated Hermes’ SDG Engagement Equity Fund.

Thank you for reading the excerpt of this article.

To gain access to the full text, sign up below.

SDG Financial Products was launched at COP26 by GEFI and showcases commercial financial products that are aligned to the SDG in order to share learnings and grow the ecosystem of SDG aligned financial products across asset classes.

SDG Financial Products

The SDG Impact Standards provide guidance on developing an appropriate strategy, management approach, transparency and governance to assist businesses and investors in contributing positively to sustainable development and achieving the SDGs. The Impact Standards also provide a decision-making framework to make sense of existing relevant principles, frameworks and tools.

SDG Impact Standards