Many see the United Nations’ Sustainable Development Goals (UN SDGs) as the most useful guide available for determining impact investment policy. The UN set the 17 SDGs nearly five years ago, with the aim of guiding global policy and funding over 15 years. Ban Ki-moon, who was UN Secretary-General at the time, called them “our shared vision of humanity and a social contract between the world’s leaders and the people”.
To meet the growing demand of the environmental and socially-conscious investor needs of today, the industry has reacted with a plethora of products. For example, there are approaches that aim to address a single SDG, while others try to meet more than one. Some also have a completely different agenda, while still sitting underneath the impact-investing umbrella.
However, the abundance of options adds a layer of complexity as investors seek to understand how best to measure the performance of their investment decisions. Although the market has grown considerably in recent years, the track records of many of the products available are relatively short, and thus performance records can be a useful indication in measuring financial metrics.