At the 2017 Principles for Responsible Investments conference in Berlin, PGGM proposed a limited number of impact indicators to measure investors’ contribution to the Sustainable Development Goals (SDG). These impact indicators are the result of a joint effort over the past year by representatives from Dutch financial institutions and companies as part of the Sustainable Finance Platform, chaired by the Dutch Central Bank (DNB).
PGGM has led the charge, drawing on its experience with impact measurement for the four themes selected by its main client PFZW (climate, water, food and health, which map to five of the 17 SDGs).
Why is this important?
SDG-related investment by ‘finance first’ investors is still in its infancy. Among other challenges there is the fear of greenwashing. That fear can be overcome by measuring and communicating tangible and comparable results.
In response, Dutch financial institutions and companies selected a core set of impact indicators per SDG, balancing credibility and practicability. The focus is on indicators that capture the absolute positive impact through the products and services produced by companies, not on their operational impact. Where possible, the proposed indicators build on existing indicator lists and catalogues.
The proposed indicators are neither comprehensive nor prescriptive and allow for flexibility in their application. Individual investors and companies can obviously select the SDGs they want to focus on and further specify or add to the proposed core indicators in line with reporting practice, values or investment strategies.
The ultimate goal of the proposed indicators and their measurement is to support the increase of investments and loans that contribute to the SDGs. Convergence towards a common set of impact indicators should facilitate companies’ disclosure of impact data to their shareholders and creditors, who in turn may grow their interest in SDG-related investments. PGGM will continue to be involved in the development of strategies and standards towards tangible impact at market-rate investment returns.
The indicators and guide are available through www.dnb.nl/SFP-working-groups. After Berlin it will be circulated among relevant professional networks and organizations for consultation and further improvements.