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Impact Investing

Impact investors that support Sustainable Development Goals (SDGs)

It is over four years since countries of the world resolved to address the multifaceted problems of poverty, inequality, climate change and environmental degradation, which are encapsulated in the United Nations’ 17 Sustainable Development Goals (SDGs). According to the UN, the SDGs are the blueprint to achieve a better and more sustainable future and are meant to map the essentials for a dignified life.

The SDGs have seventeen focus areas which are no poverty; zero hunger; good health and well-being; quality education; gender equality; clean water and sanitation; affordable and clean energy; decent work and economic growth; industry innovation and infrastructure; reduced inequalities; sustainable cities and communities as well as climate actions.  Others are life below water; life on land; peace, justice and strong institutions; and partnerships for the goals.

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“Through the pledge to Leave No One Behind, countries have committed to fast-track progress for those furthest behind first. That is why the SDGs are designed to bring the world to several life-changing ‘zeros’, including zero poverty, hunger, AIDS and discrimination against women and girls”, UNDP stated on its official website.

“We support countries in achieving the SDGs through integrated solutions. Today’s complex challenges—from stemming the spread of disease to preventing conflict—cannot be tackled neatly in isolation. For UNDP, this means focusing on systems, root causes and connections between challenges—not just thematic sectors—to build solutions that respond to people’s daily realities”, the body further added.

In recognition of the roles of SDGs, the Global Impact Investing Network (GIIN) is mobilising its members to contribute their quotas to the attainment of SDGs.

“For years, impact investors around the world have been demonstrating the full potential of the private sector to drive progress in areas such as affordable housing, access to financial services, and sustainable energy—impact areas that very clearly line up with SDGs. While it is still early days for the SDGs, the GIIN has heard from our members (who comprise the largest network of impact investors worldwide) that the impact investing community is eager to explore how their impact strategies can contribute to this global effort, and some are already actively leveraging the SDG goals as a framework for their investment”, GIIN said.

There are quite a number of impact investors that have been supporting SDGs from information extracted from GIIN’s Achieving the Sustainable Development Goals: The Role of Impact Investing.  These impact investors which have channelled their investments to support SDGs are Encourage Capital, PGGM, RobecoSAM, Triodos Investment Management,  LGT Impact Ventures and Cordaid.

Encourage Capital is based in New York, the United States of America(USA), and it is an asset management firm with interest in financial inclusion, climate change, sustainable infrastructure, sustainable sea food and water conservation. It was founded in 2014, via a combination of Wolfensohn Fund Management, LP and EKO Asset Management Partners, LLC. With $255 million fund under management, its focus is on emerging markets. Using a bottom-up approach, the fund manager has made a direct impact on the people and ecosystems and improved the investees’ business models.

PGGM is a pension fund manager based in Zeist, the Netherlands. Established in 1969, it started its impact investing strategy in 2014 and presently has €8.9 billion under management. Its investments are in Europe and emerging markets. PGGM prefers asset classes such as public equities, bonds, private equities, real assets, among others. The areas of impact are climate change mitigation, water, food, and health.

PGGM believes that many institutions will key into the SDG projects because it aligns with their investment strategies, which means in not too distant future, there will be increased investment inflows into SDGs from impact investors.

RobecoSAM is an asset manager based in Zurich, Switzerland. It presently manages $10.7 billion in different asset classes and has significant interest in private equity, public equity and fixed income. With a global focus, PGGM invests in projects that seek to improve access to clean water, health and food security. The SDG goals that align with its investment strategies allow PGGM to collect scores of non-financial impact metrics to monitor the progress being made in its impact investing activities.

Triodos Investment Management was established in 1990 with $3.5 billion in assets under management. It is also based in Zeist, Netherlands. With geographic focus on Africa, Asia, Latin America, Europe, and the Middle East, its investments have been centred on inclusive finance, energy and climate, sustainable food and agriculture, sustainable real estate, and art and culture.

Another impact investor that supports SDGs is LGT Impact Venture. Established in 2007, the asset manager is based in Zurich, Switzerland and has $71.1 million fund under management. Asset classes include private debt and private equity, and LGT prefers areas such as Latin America, East Africa, Southeast Asia and the United Kingdom (UK).

Furthermore, it invests in education, healthcare, renewable energy, agriculture, information and communication technologies. In 2015, LGT Impact Ventures’ investments reached 3.8 million disadvantaged people while its portfolio directly addresses 16 out of the 17 SDGs.

Cordaid Investment Management BV is based in The Hague, Netherlands. A not-for-profit fund manager owned by the Catholic, the fund rates investment in private debt and private equity higher than any other. Its geographic focus includes Latin America, sub-Saharan Africa, South Asia, and Southeast Asia. Poverty eradication, financial inclusion, rural development, food security, and access to healthcare are areas the fund shares with SDGs.

The increasing numbers of fund managers supporting SDGs through impact investing should be an inspiration to private equity firms in Nigeria to learn from the firms identified above about their strategies, plans and investment objectives so that the Nigerian private equity firms can play a major role in the attainment of SDGs in this country.



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