Adopted in 2015, the United Nations Sustainable Development Goals (SDGs) serve as a comprehensive global framework to end poverty, protect the planet, and promote prosperity for all. Comprising 17 goals, 169 specific targets, and 231 measurable indicators, the SDGs offer a roadmap that spans social, environmental, and economic dimensions.
According to ACA Global, for asset managers, the SDGs have become an increasingly common reference point to demonstrate sustainable practices and alignment with responsible investor values. However, aligning investment strategies with the SDGs requires more than symbolic commitment—it demands a robust understanding of the intent behind the framework.
Across financial markets, regulators are beginning to scrutinise how asset managers use the SDGs. A 2024 report by the European Securities and Markets Authority (ESMA) found little difference between SDG-labelled funds and non-SDG funds in terms of exposure to companies participating in the UN Global Compact or performance on Principal Adverse Impacts (PAIs). The findings raise concerns that SDG claims may be overstated, contributing to potential greenwashing in the investment space.
This regulatory concern has already translated into action. Luxembourg’s financial regulator recently fined a fund governed by the Sustainable Finance Disclosure Regulation (SFDR) for failing to substantiate its declared SDG alignment. The fund’s monitoring process was deemed ineffective and insufficiently detailed to justify its sustainability claims. Regulators increasingly expect asset managers to ensure that what is stated in disclosures and marketing is reflected in operational reality. A well-documented and transparent approach to identifying SDG alignment can significantly reduce regulatory and reputational risks.
The UN Department of Global Communications has issued SDG Usage Guidelines to govern how the goals and related branding can be used in commercial contexts. For asset managers, these guidelines provide essential direction on ensuring that SDG references in promotional or policy materials meet the standards of proper attribution and use. Reviewing and adhering to these guidelines is vital to maintaining compliance and credibility.
Aligning with the SDGs should be viewed as a strategic and operational decision rather than a marketing exercise. Asset managers must ensure that references to the SDGs are backed by verifiable data and linked to specific targets and indicators. Broad, unqualified statements about positive impact should be avoided unless they can be supported with evidence. Ensuring that claims reflect a realistic level of influence on outcomes helps mitigate regulatory scrutiny and build investor trust.
Firms can also benefit from external expertise to refine their SDG strategies and disclosures. Third-party perspectives help clarify strategic objectives, enhance reporting accuracy, and strengthen governance frameworks. By engaging external advisors, firms can ensure their SDG alignment is both authentic and defensible, reducing the likelihood of greenwashing and enhancing transparency across operations.
ACA supports asset managers seeking to integrate the SDGs and broader ESG frameworks into their investment practices. Its services span sustainability strategy development, governance and compliance alignment, ESG data management, and disclosure support. The firm’s ESG platform, ACA Ethos, streamlines data collection, monitoring, and reporting to ensure transparency and reduce risk. In addition, ACA offers ongoing advisory and training services, equipping asset managers with practical tools to sustain regulatory compliance and deliver meaningful, measurable impact.
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