Dansif, Finsif and Swesif have collaborated on the analysis “Investor Reporting on the Sustainable Development Goals” – please find the report here.

The analysis presents an overview of eight SDG reporting frameworks for companies and investors alongside investor perspectives on SDG reporting from interviews with 17 Nordic institutional investors.

The analysis yielded the following findings:

No standardized SDG reporting guidelines
There are a number of organizations that have defined SDG reporting methodologies for both companies and investors. However, there is no uniform methodology for measuring and reporting company or investor impacts on the SDGs.

Many different approaches to SDG reporting
The interviewed institutional investors have different approaches to SDG reporting. The most common approach is to report on a few single SDGs, which are seen as most relevant. Use of data from service providers and investors’ own data from active ownership activities are other popular ways of reporting on the SDGs.

SDGs are growing in importance
All interviewees agree that SDGs are growing in importance. In recent years, they have themselves become more focused on sustainability issues and so have other stakeholders. Almost all the interviewed investors address the SDGs in their external reporting. Almost all interviewees say that SDG reporting will play a larger role in their sustainability reporting and communication in the future.

The SDGs as a communication tool to stakeholders
Several investors see the SDGs as an effective way of communicating their sustainability efforts to stakeholders. They believe the SDGs provide a framework that is easy to understand and relate to.

Little use of existing SDG reporting guidelines
The interviews documented that there is no common perception of best practice SDG reporting guidelines. The reporting guidelines that were mentioned most frequently by interviewees was the Global Reporting Initiative and the UN Global Compact Action Platform: Business Reporting on the SDGs. However, few interviewees have used these guidelines for their reporting.

Need for better SDG reporting from companies
Lack of standardization in company reporting is mentioned as a key challenge for investor SDG reporting. Companies’ unstandardized SDG reporting makes it difficult for investors to consolidate and subsequently report on the SDGs across their portfolios. All interviewees agree that there is a need to improve both quality and coverage of companies’ SDG reporting.

Regulation as driver for standardized SDG reporting
Several interviewees point to developments in regulation, especially the EU Sustainable Finance Taxonomy, as a primary driver in standardizing SDG reporting for both companies and investors.

Wish for transparency, but lack of data
All investors wish to be transparent in their reporting and to report holistically on both negative and positive impacts on the SDGs. However, data availability remains a key issue.

Risk of SDG-washing
Several investors highlight that current SDG reporting practices entail a risk of SDG-washing. This is seen as a consequence of low data quality, low data coverage and that the SDGs are typically not part of investors’ investment policies. Reporting according to established guidelines is seen as a way of securing credibility in investor SDG reporting.

High demand for reporting will drive data improvements
Several investors argue that SDG reporting is currently in an early stage and in a learning-by-doing-process. They expect that increased investor focus on SDG reporting over time will drive companies and service providers to provide better data.

Please contact Dansif at dansif@dansif.dk if you have any questions.