Alliance Trust Investments is to integrate the United Nations Sustainable Development Goals into its investment analysis.
The firm says it will analyse the Sustainable Development Goals using the same framework as any other long-term growth trend.
The integration of these trends into its investment process will see the asset manager identify the key drivers of long-term shareholder returns for each sector, analyse how the Sustainable Development Goals are likely to reshape the operating environment for companies in that sector and understand the scale of that change.
The Sustainable Development Goals, which were launched by the UN in September 2015, are a set of 17 global development targets that address issues such as ending poverty and providing universal access to water.
The new framework will not change the current investment strategy, the firm also says, as it represents “an evolution” of what the company is already doing in the sustainable investment space.
Alliance Trust Investments head of equities Peter Michaelis says: “The benefits of the SDGs to society are self evident. For companies they point to areas of strong long-term demand for example what people want more of.
“For investors they provide a means of sorting the vulnerable companies from those with positive long term prospects.”
As part of the integration, the firm has also selected key investment themes to integrate in its investment strategy.
The themes include climate change, quality of life, sustainable consumption and resilience such as IT security.
However, Michaelis tells Fund Strategy the firm is “in the process” of identifying other investment themes to add to the existing ones.
Peter Bakker, president and chief executive officer of the World Business Council for Sustainable Development also says of the Alliance Trust move: “The implied transformation will offer enormous business opportunities. With investors and businesses placing the SDG framework at the core of their decision making and disclosures, the scaling up of the required transformational solutions will accelerate to unprecedented, yet highly necessary levels of impact.”