Columbia Threadneedle: Investing to improve, engaging for impact

Back in 2015, United Nations Member States set a target date of 2030 to achieve the 17 Sustainable Development Goals (SDGs) to transform our world, which means we have already reached the halfway point in the implementation of the SDG agenda.

Though collective efforts are currently falling short of achieving the ambitious agenda, there is little doubt that the Covid-19 pandemic and other recent global crises have provided immense worldwide challenges to sustainable development cooperation.

Challenges for investors

The recent upsurge of inflation led to correspondingly strong action from policymakers, with the US Federal Reserve engaging in one of the fastest interest rate hiking cycles ever. This also inspired investors to search for more balance along the growth to value spectrum. Supply chains were disrupted, traditional Energy outperformed, and Technology moved through a severe valuation correction, to subsequent recovery in early 2023, as cost cutting and artificial intelligence broke into sight. And in March 2023, SVB Financial mismanaged its duration risk as rates soared, and it consequently collapsed, at the heart of the first global digital bank run.

And yet, despite all of this uncertainty, we still firmly believe that the SDGs remain our best collective global sustainable development roadmap.

Investing to improve, engaging for impact

The CT SDG Engagement Global Equity Strategy is intent on showing that we can align our investment decisions with investors’ values and deliver both positive non-financial outcomes, as well as attractive financial returns. Ultimately, we want our money to drive improvement in the world around us, and to engage with companies for impact. Four years since inception, we are gaining greater experience in how collaborative shareholder engagement can generate real-world impact – and we are pleased to share the latest annual report of the Strategy with you.

Takeaways from our fourth year

1. It is vital to have top company leadership aligned with sustainability, including through defined positions (e.g. Chief Sustainability Officer), as operating and investor relations teams are more stretched than ever
2. Despite many companies advancing past initial ESG reporting – now being focused on sustainability target setting – it can be challenging to understand which metrics to choose, set, and report (standardisation is needed)
3. Feedback from investee companies matters, to identify and work through sustainability bottlenecks.

What’s in this report?

As we request of our investee companies, we too aim to continue advancing reporting transparency. In this report, we showcase our engagement across the Strategy, key voting statistics, Milestones, multi-year progress via portfolio-level metrics and individual company case studies, and an update on our social themes and net zero pathway. We also show the results of our latest investee company feedback survey.

Our thoughts on the future

We are living through a period of accelerating and often unsettling change, but remain determined to mobilise capital towards a more sustainable future, using the SDGs as a framework. We thank you for your trust in us, and we will keep reporting on the progress that our Strategy and its investee companies are making.

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