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Dutch pension giants’ data-driven SDG platform launches with Australian and Canadian support

Sustainable Development Investments Asset Owner Platform to be commercially available

The artificial intelligence-powered Sustainable Development Goals investment platform that has been in development for almost a year by Dutch giants APG and PGGM has launched with backing from Australian and Canadian institutional investors.

Joining APG and PGGM in the Sustainable Development Investments Asset Owner Platform (SDI AOP) project are British Columbia Investment Management Corporation and Australian Super.

The platform will use AI to enable investors to assess companies on their contribution to the SDGs.

The product will be commercially available via Qontigo, the new firm that brought together Deutsche Boerse's Axioma, DAX and STOXX businesses under one roof last year.

The investors cite a "lack of quality data to identify contributions to the SDGs" as an impediment for investors.

"By providing a globally consistent SDG measurement framework, the SDI Asset Owner Platform helps investors to imbed the SDGs into their investment processes," they said in a statement. The platform provides "a common definition, taxonomy, and data source" for investments into the SDGs. 

The platform relies on insights from Entis, a Utrecht-based data firm that is a subsidiary of APG. Entis, formed of ex-Deloitte executives, generates Sustainable Development Investments (SDI) classifications for 8,000 companies. It says it can help extra alpha factors (market outperformance) from unstructured data.

It comes as the United Nations Conference on Trade and Development (UNCTAD) last month said there has been progress on just six investment themes within the 17 SDGs. It said just infrastructure, climate change mitigation, food & agriculture, health, telecommunication and ecosystems & biodiversity have seen progress. 

Although APG started developing its AI-based approach to investing into the SDGs in 2016, the platform project itself dates back to September last year (see RI coverage) and the platform is open to investors "from across the globe" to create a "critical mass".

At one point other investors such as Australia's Cbus and the UK's Universities Superannuation Scheme (USS) expressed their support, though they are not involved in the launch.

The new platform is not the only SDG investment initiative.  In 2019 the UN established a network of investors called the Global Investors for Sustainable Development (GISD). This was modelled on a Swedish initiative called Swedish Investors for Sustainable Development (SISD).

"Standardization of data is one of the biggest challenges facing the environmental, social, and governance (ESG) landscape," said Jennifer Coulson, Vice President ESG at British Columbia Investment Management Corporation (BCI). "We are excited to be part of this asset-owner led initiative which sets a global standard on SDG contributions for all investors and brings consistency and comparability to company-level data."

The new platform will hold a virtual event in September for interested investors.