---
title: UN SDGs Are “Great” Investment Opportunity
description: DeAM has developed a physical climate risk equity score for corporate facilities.
---

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[TRACE Turns 20](https://articles.marketsmedia.com/trace-turns-20)

 11.08.2017

 By Shanny Basar

 Data Management

# UN SDGs Are “Great” Investment Opportunity

 11.08.2017 By Shanny Basar

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Andrew Parry, head of equities & impact investing at Hermes Investment Management, said the United Nations’ Sustainable Development Goals represent the growth opportunities emerging over the next 15 years.

![Andrew Parry, chief executive, Hermes Sourcecap](https://static.hsstatic.net/BlogImporterAssetsUI/ex/missing-image.png) Andrew Parry, Hermes

Parry spoke on a panel at the Thomson Reuters Lipper Alpha Forum in London yesterday: “The UN SDG goals have 169 targets with a map for compliance for company activities and are the growth opportunities that will emerge over the next 15 years.”

Countries adopted the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals in 2015. Last year the Paris Agreement on climate change entered into force, addressing the need to limit the rise of global temperatures. Governments and businesses are working with the United Nations to mobilize capital in  order to reach the objectives.

Trevor Allen, product manager at BNP Paribas Securities Services, said on the panel: “The SDGs are the next great investment opportunity as the goals need to be achieved by 2030. For example, 14% of global energy is green and even if that doubles to 28% by 2030, that is a massive opportunity.”

Allen said a recent environmental, social and governance survey by BNP Paribas Securities Services found that 51% of asset managers and more 50% of owners intend to invest in ESG funds over the next year.

“We now have the technology to understand what asset owners want and it is also a way for a firm to differentiate itself,” Allen added.

BNP Paribas’ corporate social responsibility strategy contributes to attaining the UN sustainable development goals. The French group measures its contribution to the SDGs and develops new products and services to promote the attainment of these goals. For example, BNP Paribas Investment Partners has a range of themed funds which directly correspond to some of the SDGs while last year the corporate and investment bank obtained the exclusive licence of the Solactive Sustainable Development Goals World index. This new index enables investors to invest in companies identified as making a significant contribution to progress on the SDGs.

HSBC also this month announced the pledge of $100bn (€86bn) in sustainable financing and investment by 2025. The goal is one of five new commitments that HSBC is making to tackle climate change and support the implementation of the UN SDGs.

Parry added there were some concerns about the availability of ESG data and verification, for example, some ESG funds could contain tobacco stocks. Allen said ESG data has to be used in in conjunction with financial analysis

“Thomson Reuters has 450 points of ESG data but looking for one silver bullet for performance is a mistake,” Allen added. “For example, if a firm’s carbon footprint is growing faster than its revenues then this is a warning signal that the business is not sustainable and will need to change.”

In order to provide more independent ESG information, Deutsche Asset Management today announced the launch of data related to climate risk management that has been developed in partnership with Four Twenty Seven.

The California-based climate intelligence advisory firm has mapped the physical locations of more than one million corporate facilities globally and uses climate science models to calculate their possible exposure to catastrophic events. For example, the data can be analysed to look at how rising sea levels could affect coastal and offshore oil and gas infrastructure, how floods could disrupt supply chains, or whether extreme heat affects labour productivity in the agricultural and construction sectors.

“This is the first time the physical location of corporate facilities and their exposure to climate-related events have been mapped for investment purposes,” added DeAM. "Deutsche Asset Management will now be able to integrate a company’s physical climate risk equity score within new investment products, and assess the implications of climate events for individual companies in its portfolios.”

Nicolas Moreau, head of Deutsche Asset Management, said in a statement: “Climate risk is now centre stage, however we believe the investment industry needs to champion the disclosure of annual and once-in-a-lifetime climate risks by companies. We have a duty to understand what more hurricanes or heatwaves mean for valuations and investment returns.”

The approach has been [outlined in a research paper](https://deutscheam.com/our-capabilities/esg/research/)by Four Twenty Seven and Deutsche AM that was launched as the COP23 climate conference in Bonn gets underway.

 

 

 

 

 

 

 

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