SDGs are a moral imperative and an economic necessity, say global pension funds

Sustainable Development Goals will help ensure future pensions, says CalPERS

The UN’s Sustainable Development Goals (SDGs) are a moral imperative and an economic necessity, according to the largest US public pension plan, CalPERS. That’s the view of Anne Simpson, Investment Director of Sustainable Investments at the $300bn giant, formally known as the California Public Employees’ Retirement System. Speaking on a panel at the PRI in Person conference in Berlin, she said CalPERS has “nowhere to hide” from the world’s problems and risks, highlighting the SDG’s global relevance, including in the US. She pointed to the element of the Paris climate accord that called for a “just transition” – one that leaves no-one behind. “We’ve never had a framework that bundles up the world’s problems and opportunities in a coherent way,” Simpson said, concluding that the SDGs would help CalPERS to “pay pensions for years to come”.
José Meijer, Vice-President of the Board of Trustees at ABP – calling the SDGs the UN’s “gift to the world” – described how the Dutch pension fund and its partners have developed a taxonomy to help other investors navigate the SDGs. Meijer said the SDGs would “overarch” the civil service fund’s entire responsible investment activities.
Alexandra West, Portfolio Head, Strategy & Innovation at Australian super fund Cbus, said thatwithout mainstream institutional investment the SDGs would not succeed. She linked them to her fund’s own beneficiaries in the construction sector, where many are in the ‘gig economy’ and facing housing uncertainty and inequality. Cbus couldn’t operate in “splendid isolation” from this, she said, adding: “We can’t afford to leave this to others,” and calling for collective action.
The panelists acknowledged that data and measurement are a challenge, but Simpson said “necessity is the mother of invention… I think this this is going to generate a whole new area of work.” CalPERS, she said, has been inspired by the Dutch funds to start to map its portfolio to the SDGs and has found a “strong degree of connectivity”.
One issue, according to West, is that the SDGs weren’t designed with investors in mind. She added she didn’t think Cbus could contribute to all the SDGs and that some of them weren’t investible.
Session moderator Kris Douma, who heads up the PRI’s work on the SDGs, said the body is forming a new working group on asset allocation and the SDGs. It comes as the PRI is publishing a new guide about the investment case about the SDGs.