Reshaping Our Financial System in the Post Pandemic Re-set
As awareness of the value of sustainable development considerations in capital markets grows, we assess progress towards achieving global sustainability goals and the opportunity to reshape our financial system in the post pandemic re-set.
A universal lens to track progress
Formally adopted by 193 countries, the 17 United Nations Sustainable Development Goals (SDGs) provide a universal lens to track progress throughout the financial system by harmonizing the three pillars of sustainable development: social inclusion, environmental protection, and economic growth. According to the Business and Sustainable Development Commission, putting the SDGs at the heart of the world’s economic strategy could unlock US$12 trillion in opportunities and 380 million jobs a year by 2030.
For each of the next 17 days, we will provide a daily update on how companies around the world are making progress towards achieving the SDGs. On the 18th day, we will provide a summary of the steps that are being taken and where support is most lacking.
 A release from the Business and Sustainable Development Commission, January 16, 2017, http://businesscommission.org/news/release-sustainable-business-can-unlock-at-least-us-12-trillion-in-new-market-value-and-repair-economic-system
 Trucost assessed the alignment of company business models with the United Nations SDGs on its Positive Impact Analytics coverage of 3,500 companies representing 85% of global market capitalization.
SDG 1: 11% of companies have business models that support 'no poverty'
There has been marked progress over the past decades on reducing poverty – the first of the SDGs. The World Bank expects this trend to reverse in 2020, however, given in part to the COVID-19 pandemic that is having a disproportionate impact on the poor.
Trucost’s Positive Impact Analytics show that over half (56%) of the 11% of companies around the world that support no poverty are focused on Target 1.4, one of the seven sub-goals within this SDG:
Ensure that by 2030 all men and women, particularly the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership, and control over land and other forms of property, inheritance, natural resources, appropriate new technology, and financial services, including microfinance.
Another 44% of companies with these business models are focused on Target 1.5:
By 2030, build the resilience of the poor and those in vulnerable situations and reduce their exposure and vulnerability to climate-related extreme events and other economic, social and environmental shocks and disasters.
Companies are providing consumer banking and financial services, plus property insurance, important products and services if these two sub-goals are to be met. More could be done to help eradicate extreme poverty, however, which is currently defined as people living on less than US$1.90 a day. The World Bank estimates that 40 million to 60 million people will fall into this category in 2020.
SDG 2: 6% of companies have business models that support 'zero hunger'
After steadily declining for a decade, world hunger is on the rise, affecting 9% of the population globally. From 2018 to 2019, the number of undernourished people grew by 10 million, and there are nearly 60 million more undernourished people now than in 2014.
Of the 6% of companies around the world that have business models supporting zero hunger, Trucost’s Positive Impact Analytics show that the majority (88%) are directed at Target 2.1:
By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious, and sufficient food all year round.
This involves providing fresh food, such as cereals, meats, fruits, and vegetables to areas in need. Companies are also seeing opportunities to provide fertilizers and agricultural equipment to support this SDG. More focus is necessary, however, on maintaining the genetic diversity of seeds, cultivated plants, and farmed and domesticated animals, as this could have important long-term benefits.
SDG 3: 12% of companies have business models that support 'good health and well-being'
Health achievements in the last 20 years have been remarkable. Between 2000 and 2017, the global mortality rate for children under five years of age declined by 44%. In addition, the risk of dying from one of the four major non-communicable diseases – diabetes, cancer, chronic lung disease, and cardiovascular disease – declined by 17% among people ages 30 to 70 during this same period. Disparities continue to exist, however, with many people lacking access to quality health care and treatment.
Of the 12% of companies around the world that have business models supporting good health and well-being, Trucost’s Positive Impact Analytics show that the majority (93%) are directed at all nine of the sub-goals in SDG 3.
More than one third (38%) of companies provide products and services that are pharmaceutical related, and 14% provide hospitals, clinics, and health care facilities. There is an opportunity to provide more medical equipment, however, which is needed in the facilities being built. This only represents 5% of company activity.
SDG 4: <1% of companies have business models that support 'quality education'
Major progress has been made over the past decade towards increasing school enrollment rates at all levels, particularly for girls. Nevertheless, about 260 million children were still out of school in 2018, which represented nearly one fifth of the global population in that age group. In addition, more than half of all children and adolescents worldwide are not meeting minimum proficiency standards in reading and mathematics.
Trucost’s Positive Impact Analytics show that only a small percentage of companies (<1%) are focused on quality education, with activities being directed towards educational services, including schools and educational institutions. Much more needs to be done on many of the sub-goals. This includes ensuring that all girls and boys complete free, equitable, and quality primary and secondary education, and have access to affordable and quality technical, vocational, and tertiary education, including university. Efforts are also needed to help eliminate gender disparities.
SDG 5: 5% of companies have business models that support 'gender equality'
Governments around the world are starting to pay more attention to gender equality, but progress is slow and uneven, and much remains to be done to increase women’s rights and participation in public life and senior jobs, according to the OECD. Over the past decade, the Social Institutions and Gender Index (SIGI) has consistently shown that governments need to look at discriminatory laws, social norms, and practices to achieve gender equality and promote women’s empowerment.
Trucost’s Positive Impact Analytics show that, of the 5% of companies that have business models that support gender equality, all are focused on Target 5.b:
By 2030, enhance the use of enabling technology, in particular information and communications technology, to promote the empowerment of women.
Not surprisingly, activities are all related to telecommunications equipment and services. Additional activities are needed, however, to provide women with mobile access, since women in low- and middle-income countries are still 8% less likely than men to own a mobile phone, and 20% less likely to use the Internet on a mobile. This means that 300 million fewer women than men in these markets use mobile Internet, although the Internet provides important access to information and opportunities.
SDG 6: 3% of companies have business models that support 'clean water and sanitation'
Global access to safe water, adequate sanitation, and proper hygiene education can reduce illness and death from disease, leading to improved health, poverty reduction, and socio-economic development. However, many countries are challenged to provide these basic necessities to their populations, leaving people at risk for water, sanitation, and hygiene-related diseases.
Trucost’s Positive Impact Analytics show that only 3% of companies around the world are supporting clean water and sanitation. All these companies are focused on Target 6.2, one of six sub-goals in this SDG:
By 2030, achieve access to adequate and equitable sanitation and hygiene for all and end open defecation, paying special attention to the needs of women and girls and those in vulnerable situations.
Of these, many companies (61%) are providing personal hygiene products, such as soap, cleansers, and disinfectants, which are much needed during the ongoing pandemic. Others (39%) are focused on water distribution and supply service. More is needed on other sub-goals, however, such as Target 6.3:
By 2030, improve water quality by reducing pollution, eliminating dumping, and minimizing release of hazardous chemicals and materials, halving the proportion of untreated wastewater and substantially increasing recycling and safe reuse globally.
SDG 7: 7% of companies have business models that support 'affordable and clean energy'
Despite energy’s critical role in catalyzing economic development and supporting people’s health and livelihoods, the world remains severely off track to achieve universal access to affordable, reliable, sustainable, and modern energy for all by 2030. According to data released by Tracking SDG 7: The Energy Progress Report 2020, 789 million people globally still lack access to electricity and 2.8 billion people − over a third of the world’s population − are unable to cook cleanly and safely.
Trucost’s Positive Impact Analytics show that, of the 7% of companies that have business models that support affordable and clean energy, 96% are focused on Target 7.1:
By 2030, ensure universal access to affordable, reliable and modern energy services.
In addition, 69% are focused on Target 7.b:
Expand infrastructure and upgrade technology for supplying modern and sustainable energy services for all in developing countries by 2030.
Over two thirds (69%) of companies provide products and services that are related to energy transmission networks and infrastructure. Clean energy needs more attention, however, including: solar derived by capturing radiant energy from sunlight and converting it into heat, electricity, or hot water; wind farms that utilize the energy of wind flow for turbines to produce electricity; and, geothermal initiatives that use steam that comes from heated water pumping below the earth’s surface to operate turbines.
SDG 8: 17% of companies have business models that support 'decent work and economic growth'
This SDG is focused on providing opportunities to obtain work that is productive and delivers a fair income, security in the workplace, and social protection for families, while achieving higher levels of productivity overall, in part through technological innovation. Promoting policies that encourage entrepreneurship and job creation is key to this, as are effective measures to eradicate such things as forced labour.
Of the 17% of companies around the world that have business models supporting decent work and economic growth, Trucost’s Positive Impact Analytics show that almost all (99%) are directed at Target 8.10:
Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance, and financial services for all.
This involves activities to create banking and financial infrastructure. In addition to this, however, more must be done to promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity, and innovation. In addition, efforts are needed to encourage the formalization and growth of micro-, small-, and medium-sized enterprises.
SDG 9: 18% of companies have business models that support 'industry, innovation and infrastructure'
According to the United Nations, investments in infrastructure – transport, irrigation, energy, and information and communication technology – are crucial to achieving sustainable development and empowering communities in many countries. It has long been recognized that growth in productivity and incomes, and improvements in health and education outcomes, require investment in infrastructure.
Over half (58%) of companies around the world that support industry, innovation, and infrastructure are focused on Target 9.c:
Strive to provide universal and affordable access to the Internet in least developed countries by 2020.
Another 44% are focused on Target 9.1:
Develop quality, reliable, sustainable, and resilient infrastructure, including regional and trans-border infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all.
This is resulting in the provision of a variety of products and services, with 44% of companies delivering computing and information technology capabilities, 21% aviation infrastructure and services, and 11% Internet services.
SDG 10: <1% of companies have business models that support 'reduced inequalities'
Income inequality is on the rise − the richest 10% of the world’s population has up to 40% of global income. SDG 10 calls for reducing these inequalities, as well as those based on age, sex, disability, race, ethnicity, origin, religion, or economic or other status within a country.
Few companies (<1%) around the world have business models that support reduced inequalities. Trucost’s Positive Impact Analytics show that all of these companies are directed at Target 10.1:
By 2030, progressively achieve and sustain income growth of the bottom 40% of the population at a rate higher than the national average.
Employment services are being provided by 84% of the companies and educational publications by 16%. Efforts are needed, however, to ensure equal opportunities and an end to discrimination. Among other things, this includes eliminating discriminatory laws, policies, and practices, and promoting appropriate legislation, policies, and action. It also requires empowering and promoting the social, economic, and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion, economic, or other status.
SDG 11: 8% of companies have business models that support 'sustainable cities and communities'
As of 2018, over four billion people around the world – more than 50% of the global population – lived in cities. In East Asia and the Pacific alone, cities house 1.2 billion people, almost rivalling the population of India. The goal of SDG 11 is to make cities workable, inclusive, safe, and resilient.
Trucost’s Positive Impact Analytics show that 85% of companies around the world with business models that support sustainable cities and communities are directed at Target 11.5:
By 2030, significantly reduce the number of deaths and the number of people affected, and substantially decrease the direct economic losses relative to global gross domestic product caused by disasters, including water-related disasters, with a focus on protecting the poor and people in vulnerable situations.
Another 8% support 11.2:
By 2030, provide access to safe, affordable, accessible, and sustainable transport systems for all, improving road safety, notably by expanding public transport, with special attention to the needs of those in vulnerable situations, women, children, persons with disabilities, and older persons.
Property insurance is being provided by 85% of the companies focused on sustainable cities and communities, and public transport infrastructure and services by another 8%. Fewer than 2% of companies provide products and services related to air pollution reduction (e.g., scrubbers, purifiers, and sensors) and cultural and natural heritage preservation (e.g., museums, parks, and cultural centers). Additional investments are needed to bring pollution levels down and create green spaces for the enjoyment of all.
SDG 12: 1% of companies have business models that support 'responsible consumption and production'
A growing population is increasing the demand for natural resources. According to the United Nations, sustainable consumption and production is about doing more and better with less to enhance economic gains and the quality of life, while reducing resource use and degradation. This requires promoting resource and energy efficiency, along with sustainable infrastructure, and providing access to basic services and green and decent jobs.
Trucost’s Positive Impact Analytics show that only 1% of companies around the world have business models supporting responsible consumption and production. Of these companies, 96% are focused on Target 12.3:
By 2030, halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses.
A large proportion of these companies (90%) are providing products and services related to food logistics, as well as cold chain that aims to maintain products within a specified low-temperature range from harvest through to consumption. Additional activities need to be directed at other fronts, however, including providing support to developing countries’ scientific and technological capacity for sustainable consumption and production.
SDG 13: 14% of companies have business models that support 'climate action'
It is becoming widely accepted that high-carbon activities present considerable threats to social, environmental, and financial stability. The goal of this SDG is to encourage that urgent action be taken to combat climate change and its impacts, especially since affordable, scalable solutions are now available to enable countries to leapfrog to cleaner, more resilient economies.
Trucost’s Positive Impact Analytics show that 14% of companies around the world have business models supporting climate action, with over half (53%) focused on Target 13.1:
By 2030, strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.
Another 48% are focused on Target 13.2:
Integrate climate change measures into national policies, strategies, and planning.
Over half of these companies (53%) are providing property insurance, another 34% energy transmission networks and infrastructure, and another 8% hydroelectric energy. A small percentage of companies are focused on other renewable energy sources – such as solar, wind, and geothermal heat – but additional action is needed to provide energy efficient products, services, and technology.
SDG 14: 0% of companies have business models that support 'life below water'
According to the United Nations, over three billion people depend on marine and coastal biodiversity to make a living. Unfortunately, issues such as overfishing, climate change, and pollution are threatening their well-being.
The aim of this SDG is to manage and protect marine and coastal ecosystems, but apathy is the biggest problem according to the United Nations. This is supported by the fact that Trucost’s Positive Impact Analytics show that 0% of companies around the world have business models that support life below water. This is despite the fact that our drinking water, food supply, and even the oxygen in the air we breathe, are all ultimately provided and regulated by the sea.
The sub-goals that are focused on reducing marine pollution, ocean acidification, and overfishing, and preserving coastal and marine areas are critical. Initiatives are needed to implement and enforce international sea law, and increase scientific knowledge, research, and technology for ocean health.
SDG 15: <1% of companies have business models that support 'life on land'
We are all part of the planet’s ecosystem, but deforestation, pollution, the draining of wetlands, and climate change, among many other factors, are damaging this ecosystem at an incredible pace.
According to the United Nations, every year 13 million hectares of forests are lost, while the persistent degradation of drylands has led to the desertification of 3.6 billion hectares, disproportionately affecting poor communities.
SDG 15 aims to sustainably manage forests, combat desertification, reverse land degradation, and halt biodiversity loss. But, according to Trucost’s Positive Impact Analytics, less than 1% of companies around the world have business models supporting these initiatives, and they are all focused on Target 15.1:
By 2020, ensure the conservation, restoration, and sustainable use of terrestrial and inland freshwater ecosystems and their services, in particular forests, wetlands, mountains, and drylands, in line with obligations under international agreements.
Results show that 63% of companies are providing products and services for landscape restoration and remediation, and 37% for land pollution abatement products, services, and technologies. With a 2020 deadline for many of the sub-goals associated with this SDG, time is running out. This includes the goal of promoting the implementation of sustainable management of all types of forests, halting deforestation, restoring degraded forests, and substantially increasing afforestation and reforestation globally.
SDG 16: <1% of companies have business models that support 'peace, justice and strong institutions'
According to the United Nations, by the end of 2017, 68.5 million people had been forcibly displaced as a result of persecution, conflict, violence, or human rights violations. In addition, corruption, bribery, theft, and tax evasion cost developing countries US$1.26 trillion per year. SDG 16 is dedicated to the promotion of peaceful and inclusive societies for sustainable development, the provision of access to justice for all, and building effective, accountable institutions at all levels.
Of the <1% of companies around the world that support peace, justice, and strong institutions, Trucost’s Positive Impact Analytics show that all focus on Targets 16.1 and 16.4:
(16.1) Significantly reduce all forms of violence and related death rates everywhere.
(16.4) By 2030, significantly reduce illicit financial and arms flows, strengthen the recovery and return of stolen assets, and combat all forms of organized crime.
The capabilities being delivered are all related to cybersecurity and privacy products, services, and technology. Many other areas need attention, however. For example, a United Nations report released in January 2019 showed that human trafficking was on the rise and taking on horrific dimensions, with sexual exploitation of victims being the main driver. Children accounted for 30% of those being trafficked, and far more girls were detected than boys. This underscores the importance of Target 16.2:
End abuse, exploitation, trafficking and all forms of violence against and torture of children.
There are many other important sub-goals in SDG 16.
SDG 17: 15% of companies have business models that support 'partnerships'
Successful sustainable development will require partnerships between governments, the private sector, and society as a whole. These partnerships will need to be built upon shared values, vision, and goals at the global, regional, national, and local level.
Of the 15% of companies supporting partnerships, Trucost’s Positive Impact Analytics show that 55% are focused on Target 17.8:
Fully operationalize the technology bank and science, technology and innovation capacity-building mechanism for least developed countries, in particular information and communications technology.
Another 31% are focused on Target 17.17 and Target 17.19:
(17.17) Encourage and promote effective public, public-private, and civil society partnerships by 2030.
(17.19) By 2030, build on existing initiatives to develop measurements of progress on sustainable development that complement gross domestic product, and support statistical capacity-building in developing countries.
And, another 14% are focused on 17.6.2:
Enhance North-South, South-South and triangular regional and international cooperation on and access to science, technology, and innovation by 2030.
Computing and information technology and services are being provided by 55% of companies. Data collection, monitoring, and reporting products, services, and technology are being provided by another 31% of companies, and Internet service provision by 14%.
The sub-goals mentioned above, as well as others contained in SDG 17, can only be met if groups work together. According to the United Nations Conference on Trade and Development (UNCTAD), achieving the SDGs will require US$5 trillion to $7 trillion in annual investment. It will therefore be critical for developed countries to fully implement their official development assistance commitments, including the commitment by many developed countries to achieve the target of 0.7% of gross national income for official development assistance (ODA/GNI) to developing countries and 0.15% to 0.20% of ODA/GNI to least developed countries.
The SDGs: 65% of companies have business models that support the 'SDGs'
As we saw from our review of the 17 SDGs over the past 17 days, some are receiving more attention than others. SDG 9 (industry, innovation, and infrastructure) had the highest percentage of companies (18%) supporting these initiatives, resulting in the delivery of computing and information technology capabilities, aviation infrastructure and services, and Internet services. This was followed by SDG 8 (decent work and economic growth) with 17% of companies supporting these initiatives, resulting in the creation of banking and financial infrastructure.
Other areas are lacking support, however. Trucost’s Positive Impact Analytics showed that none of the 3,500 companies being monitored had business models supporting SDG 14 (life below water) and less than 1% had business models supporting SDG 15 (life on land). There was also poor support to date for SDG 4 (quality education, less than 1%) and SGD 10 (reduced inequalities, also less than 1%).
The good news is that companies around the world are increasingly building sustainability into their business strategies, and linking outcomes to the SDGs. In fact, nine out of 10 companies on the S&P 500 index, a bellwether of U.S. stock market performance, published sustainability, corporate responsibility, or citizenship reports in 2019. That was up from 20% in 2011. This reporting can help companies consider the impact they are having on sustainability issues, and help them better assess potential risks and opportunities they may face.
While achieving the SDGs will require US$5 trillion to $7 trillion in annual investment, according to the United Nations Conference on Trade and Development (UNCTAD), sustainable and responsible investments represent high-potential sources of capital for the SDGs. As of 2016, US$18.2 trillion was invested in this asset class, and the bond market for sustainable business is growing. For example, in 2018 global green bonds reached US$155.5 billion, up 78% from the previous year.
The global pandemic has affected individuals, families, and economies around the world. This has heightened awareness of the value of sustainable development considerations in capital markets, and the opportunity to reshape our financial system in the post-pandemic era. With a strong emphasis on social inclusion, environmental protection, and economic growth, much more progress can be made to achieve the goals established by the United Nations and formally adopted by 193 countries.
Align with global sustainability goalsTALK TO AN EXPERT
I need to maximize positive impact
Our Essential Positive Impact Analytics provide mission critical insight to maximize the positive impact of corporations and financial intuitions through the universal lens of the United Nations Sustainable Development Goals.Discover positive impact analytics
See What Matters
A complex web of frameworks and regulatory incentives are emerging to drive the transition to an equitable, sustainable future while delivering economic growth.Essential positive impact intelligence lets you see what matters >
I need to align with TCFD recommendations
Stakeholders increasingly expect to examine and quantify climate-related risks and opportunities through the universal lens of the recommendations from the Task Force for Climate-related Financial Disclosures (TCFD). S&P Global Market Intelligence solutions, powered by Trucost data and insights, have helped corporations and financial institutions align their strategies with global climate goals.Learn more