Many companies in SDG funds receive more than 75% of their revenues from countries in the top quartile of the SDG Index
NEW YORK–(BUSINESS WIRE)– Clarity AI, the leading global sustainability tech platform, released new research today that highlights a significant gap between the intentions of Sustainable Development Goal (SDG) funds and their impact in countries with the greatest need for sustainable development. On average, companies in SDG funds sell only 1% of their products and services in these countries.
The SDG Index, a valuable tool for evaluating countries’ progress towards the SDGs, demonstrates that different countries are at varying stages of advancement towards achieving the SDG targets. The index highlights the need for increased efforts and resources in countries with lower scores, which are further away from achieving the SDGs. The findings of the new research, which is based on an assessment of the SDG Index, emphasize the urgency for investors and asset managers to align their investments with areas requiring the most attention.
“The goal of SDG funds is to invest in companies that contribute to solving the SDGs, but our research shows a disconnect between investment focus and country needs,” said Lorenzo Saa, Chief Sustainability Officer at Clarity AI. “To maximize the impact of SDG funds and effectively contribute to global development, it is crucial for investors and asset managers to gain visibility into the areas where companies are selling their products and services that contribute to the SDGs.”
Furthermore, the distribution of revenues generated by companies in SDG funds does not align with the needs of countries lagging in SDG progress. On average, companies in SDG funds receive more than 75% of their revenues from countries in the top quartile of the SDG Index, indicating a flow of funds to already well-performing nations. Alarmingly, even the fund with the highest average revenue from countries in greatest need has only 5% of its index-included companies’ revenues coming from these countries.
Strategic and responsible investment in SDG funds has the potential to generate greater positive impact and drive transformative change. By aligning investments with countries striving to achieve the SDGs, investors can contribute significantly to global sustainable development.
About Clarity AI
Clarity AI is a sustainability technology platform that uses machine learning and big data to deliver environmental and social insights to investors, organizations, and consumers. Clarity AI’s capabilities are an essential tool for end-to-end sustainability analysis related to investing, corporate research, benchmarking, consumer ecommerce, and regulatory reporting. As of June 2023, Clarity AI’s platform analyzes more than 70,000 companies, 420,000 funds, 201 countries, and 199 local governments, which represents more breadth than any other player in the market. One way Clarity AI delivers on its mission to bring societal impact to markets is by ensuring its capabilities are delivered directly into clients’ workflows through integrations with partners like BlackRock – Aladdin, Refinitiv an LSEG business, BNP Manaos, CACEIS, and Simcorp. Additionally, Clarity AI’s sustainability insights reach more than 150 million consumers across more than 400,000 merchants on the Klarna platform. Clarity AI has offices in North America, Europe, and the Middle East, and its client network manages tens of trillions in assets and includes companies like Invesco, Nordea, BlackRock, Santander, Wellington, and BNP Paribas.
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