The lack of an accepted methodology to truly measure investment impact makes the adoption of sustainable development goals in listed equities increasingly challenging. This was the core issue raised during a discussion on the hopes and hurdles facing sustainable investments at Finanz’18 conference in Zurich.
Figures focus
He said investors often expect to see tangible figures relating to how carbon emissions the issuing firm has avoided, for example. Pointing to existing examples, Wild said Spain shows how wind power is being shown to replace unsustainable sources in the energy mix, but this brings with it problems. ‘Someone can claim your energy mix is wrong or your operating hours are wrong. I think this is all fair but it should not stop you from making investments in a project or a company which makes a lot of sense in this sense.’
Seema Suchak, sustainable investment analyst at Schroders, disagreed with Wild when it came to measurability of impact. ‘We shouldn’t make assumptions on measuring impact. For example, we will go to the companies and say: “You have this strategy, you are investing x amount of money into it, what impact do you want to achieve and how you are planning to do that?” ‘A lot of funds are being repackaged as sustainable strategies and impact investing at the moment, which worries me quite a bit. This is because they are not going quite far enough along the line on sustainability.’
