Institutional investors are planning en masse to create allocations to investments aligned with the UN Sustainable Development Goals, according to data gathered by private markets investor LGT Capital Partners.
The firm surveyed 230 investors in alternatives (private equity, real estate, private debt, infrastructure and hedge funds) and found that 40 percent intended to introduce specific allocations to SDG-aligned investments within the next two years. Twenty-two percent of the respondents already have such allocations.
The UN SDGs, the 17-point blueprint for a more sustainable world, are widely viewed by investors as useful in helping the financial industry address environmental and social issues, with many (80 percent, according to the survey) agreeing that they create new investment opportunities.
The survey data chimes with New Private Markets‘ reporting on the limited partner universe, where various different types of allocator have created buckets – often that cut across asset classes – to deploy capital towards impact, either specific themes like climate or the broad array of UN SDGs.
There is also a movement among investors towards measuring the impact of their investments with respect to the SDGs. Twenty-two percent of the LGT Capital Partners survey respondents said they assess the impact of their investments in this way, with a further 44 percent saying they intend to start doing so in the next two years. When the firm asked the same question in 2019, only 10 percent had started measuring impact.