Carol A Adams, 30 January 2020
When it comes to hitting the 2030 targets underpinning the UN’s 17 Sustainable Development Goals, considering risk alone will not cut it. Larry Fink’s recent emphasis on climate change risks and divesting in coal is significant, albeit a few decades late, but what about opportunities? And what about other sustainable development issues that threaten to bring businesses down?
Unless businesses change what they do and how they do it, the goals will not be achieved. To safeguard long-term returns, businesses can’t ignore sustainable development issues such as soil erosion, water security and poverty. Investors aren’t asking the right questions to protect long-term returns. While important, financial and quantitative disclosures deserve no more attention than qualitative disclosures on governance oversight, strategy and management approach. These narrative disclosures tell investors whether an organisation has adequate processes in place to identify sustainable development risks and opportunities and reflect them in their strategy.