Private investors have long sought to align their investments with the Sustainable Development Goals (SDGs), but assessing corporate impact on the SDGs is a complex task. Current methods often lack scientific basis and transparency. To address this issue, a new evidence-based review approach has been introduced for investors to evaluate the impact of economic sectors on individual SDGs. The authors have developed a traffic-light scoring system to assess sector-level impacts on SDGs 1-16.
The initial review conducted by the authors examined the impacts of 81 economic sectors on the SDGs. The results showed that environmental SDGs are largely negatively influenced by most economic sectors. Additionally, primary sector activities have the most negative impact on a larger number of SDGs compared to other sectors. By focusing on the agricultural sector as a case study, the authors utilized Causal Loop methodology to demonstrate the ripple effects of SDG interactions.
Their research highlights three key considerations that are crucial for sustainable investment strategies. Firstly, investors must take into account ‘impact shadows’, which refer to indirect impacts that may not be immediately apparent. Secondly, investors need to understand the spillover effects of actions across different SDGs. Lastly, the hierarchical nature of the SDGs must be considered when formulating investment strategies to ensure a holistic approach to sustainable development.
In conclusion, assessing corporate impact on the Sustainable Development Goals (SDGs) is not an easy task, and current methods often lack scientific basis and transparency. To address this issue, a new evidence-based review approach has been introduced for investors to evaluate sector-level impacts on individual SDGs using a traffic-light scoring system. Their research highlights three key considerations that are crucial for sustainable investment strategies: taking into account ‘impact shadows’, understanding spillover effects across different SDGs and considering the hierarchical nature of
