BNP Paribas Asset Management (BNPP AM) and Matter, a Danish Fintech specializing in sustainability insights, recently announced the launch of ‘SDG Fundamentals’, an innovative data solution.
This dataset “enables investors to analyze the extent to which company[1] revenues are aligned – or misaligned – with the targets of the 17 United Nations Sustainable Development Goals (SDGs).”
Adopted in 2015 at COP 21, the UN SDGs were “defined as a universal roadmap for achieving a sustainable and inclusive future by 2030.”
Since then the asset management industry has “made significant progress in developing solutions to help address some of the global challenges articulated by the SDGs, using capital allocation and engagement as levers towards a sustainable future.”
Prioritizing investment in the SDGs has the potential “to unlock opportunities worth approximately USD 12 trillion and 380 million jobs a year by 2030 for investors.”
Despite this, a funding gap “remains between current investments in companies aligned to the SDGs and what is necessary to meet the 2030 targets set by them.”
SDG Fundamentals, the new dataset developed by BNPP AM and Matter, “helps bridge this gap.”
It provides investors “with a framework to understand the extent of the alignment of a company’s revenue streams with individual SDGs and targets, as well as across multiple SDGs and targets.”
SDG Fundamentals is “based on a proprietary SDG taxonomy, itself grounded on a strict reading of UNStats SDG metadata, and uses one of the more granular revenue breakdown databases available.”
SDG Fundamentals data “covers more than 50,000 issuers, providing unparalleled insights into their alignment and misalignment with the SDGs through an analysis of their products and services.”
It can ‘assist investors in enriching their approach to sustainability analysis” in four ways:
- integration: helping investors identify sustainable thematic head- and tail-winds to inform their investment decision-making;
- regulatory compliance under SFDR and MiFID II to inform ‘sustainable investment’ determination;
- stewardship and exclusion purposes: helping investors to identify revenues misaligned to sustainable themes; and
- portfolio construction and reporting for thematic and impact funds.
SDG Fundamentals will be “available to the wider sustainable investment market via Matter.”
Berenice Lasfargues, Sustainability Integration Lead at BNPP AM, comments:
“Understanding the extent to which companies’ core business revenues are aligned to the Sustainable Development Goals, and by extension have the potential to contribute to real-world sustainable outcomes, is the next frontier of sustainability analysis.”
Lasfargues adds:
“While this type of analysis continues to be hampered by a lack of granular and standardized corporate sustainability disclosures and data, our methodological work with Matter helps to break down this barrier and provides investors with actionable information on what constitutes company alignment to the targets underpinning the 17 SDG Goals. It is also part of a wider push towards increased data breadth, quality and standards through industry collaboration. ”
Lise Pretorius, Head of Sustainability Analysis at Matter, comments:
“At Matter we offer a suite of sustainability insights on publicly traded companies, utilizing both in-house expertise and third-party insights from civil society, academia, think tanks and more to gain a 360-degree view of company non-financial performance. The collaboration with BNPP AM is an extension of this commitment to advance the common understanding of companies’ non-financial performance through multi-stakeholder collaboration.”
Pretorius also notes:
“Partnering with BNPP AM to develop SDG Fundamentals has been a unique opportunity to work with a leading asset manager which combines deep market expertise with a genuine commitment to rigorous understanding of the sustainability and SDG alignment of their investments.”
As covered, BNP Paribas Asset Management is “the investment arm of BNP Paribas, a leading banking group in Europe with international reach.”
BNPP AM aims “to generate long-term sustainable investment returns for its clients, based on a unique sustainability-driven philosophy.”
BNPP AM’s investment capabilities “are focused around five key strategies: High Conviction Strategies, Private Debt & Real Assets, Multi-Asset, Quantitative & Solutions (MAQS), Emerging Markets and Liquidity Solutions, with investment processes incorporating quantitative and fundamental analysis.”
Sustainability is “embedded within BNPP AM’s strategy and investment decision-making.”
Among the leaders in thematic investment in Europe, BNPP AM contributes “to the energy transition, environmental sustainability and the promotion of equality and inclusive growth.”
BNPP AM currently “manages EUR 522 billion of assets (EUR 645 billion of assets under management & advisory) and benefits from the expertise of around 500 investment professionals and over 800 client servicing specialists, serving individual, corporate and institutional clients in 67 countries.”