In search of impact - Measuring the full value of capital: Update: The Sustainable Investment Framework

January 2019 – Supporting progress against SDGs has become one of the main objectives of the sustainable finance industry. However, measurement of this progress at fund level from both institutional and retail investors is still only developing. Although many challenges remain to be solved, the Investment Leaders Group, convened by the University of Cambridge Institute for Sustainability Leadership (CISL) has designed a set of six open-source metrics which investors can use as proxies for their progress towards the SDGs.

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Companies are increasingly seeking to reduce their environmental impacts, increase resource efficiency and mitigate risks from climate change. The Sustainable Investment Frameworkoffers a new approach for the investment community to measure how this progress is being achieved, using the UN Sustainable Development Goals as measures of performance. The set of science-based metrics works at both corporate and fund level and is aimed to be calculable using ESG and publicly available data.

A broad range of stakeholders, from pension funds to investment consultants, insurance companies to investment managers and individual savers, all agree that meaningful data on the social and environmental impact of funds could be transformational for the investment industry. All investment has an impact on the real world. To a large extent these impacts – for example job creation or natural resource consumption – are opaque to investors, with limited information available from standard information sources. The Sustainable Investment Framework provides investors with a simple dashboard to check their alignment with an otherwise complex web of SDGs. The dashboard comprises six core themes which are themselves derived from CISL’s Rewiring the Economy plan.

About

The Investment Leaders Group (ILG) is a global network of pension funds, insurers and asset managers committed to advancing the practice of responsible investment. It is a voluntary initiative, driven by its members, facilitated by the Cambridge Institute for Sustainability Leadership (CISL), and supported by academics in the University of Cambridge. The ILG´s vision is an investment chain in which economic, social and environmental sustainability are delivered as an outcome of the investment process as investors go about generating robust, long-term returns. It produces thought leadership, methodologies and tools to help advance best practice in responsible investment.

Citing this report

Please refer to this report as: University of Cambridge Institute for Sustainability Leadership (CISL). (2019, January). In search of impact: Measuring the full value of capital. Update: The Sustainable Investment Framework.Cambridge, UK: Cambridge Institute for Sustainability Leadership.

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