To increase the visibility of corporate SDG investments and source adequate financing, it’s important to identify the types of investments that companies are making to support their SDG strategy.
Corporate SDG investments should cover a wide range of industries and support sustainable-development targets for a diverse set of topics. These include:
- employee diversity or safety
- carbon neutrality
- human rights
- recycled materials in products
Therefore, SDG investments should include not only capital expenditures but also operational expenditures such as research and development (R&D), marketing, human resources costs, and other internal investments to implement sustainable business (for example, supply chain). They should also include external investments like M&A and foreign direct investment (FDI).
This broad approach is consistent with the concept of multiple capitals: Accounting for integrated investment should include investments not only in physical or financial assets but also in people (human capital), community development (social capital), protection of the environment (natural capital), and innovation (intellectual capital).
It’s important for companies to be transparent about what they consider SDG-aligned investment and to demonstrate the causal link between the investment, the strategy, and its impact on the performance of SDG targets.
