On Wednesday, the Geneva-based United Nations Conference on Trade And Development (UNCTAD) presented a report titled “A Sustainability Integration Framework for Institutional Investors”, which it drafted with the assistance of Global SWF during 2022 and 2023.
The release took place in the context of the World Investment Forum held this week in Abu Dhabi, which is being well attended by government officials, policy makers, academia and practitioners. The Wednesday workshop was participated by the CEOs of Morocco's Ithmar Capital, Azerbaijan's SOFAZ, Nigeria's NSIA and Djibouti's FSD, and by the Executive Director of the Infrastructure Department at Abu Dhabi's ADIA, among other speakers.
Over the past few years, ADIA has built an impressive portfolio of 41 GW of renewable energy operating capacity and capacity under construction and development, through commitments in seven portfolio companies in the US (Arevon Energy, Great River Hydro, Sempra Infrastructure), the UK (MGREF1), India (Greenko Group, ReNew Power), and Singapore (Equis Development).
UNCTAD’s latest sustainability guide draws on best practices from asset owners and managers to assist SWFs and PPFs interested in crafting their own approach to sustainability integration, offering a structured approach for thinking about sustainability in seven specific steps:
Incorporate sustainability into the investor’s mission;
Establish the governance structure for sustainability integration;
Put sustainability policies in place;
Integrate sustainability risk management in the investment process;
Incorporate sustainability into investment strategies;
Mainstream sustainability along the investment value chain;
Measure and report on progress.
While this framework proposes concrete steps and strategies for SWFs and PPFs, the guide highlights, addressing sustainability requires an iterative approach as investors gain a better understanding of the issues at hand, including the latest developments in international standards setting.
Since its inception, Global SWF has been a strong advocate of enhanced sustainability practices among institutional investors. In 2020, it launched a scoreboard that assesses the actual progress and efforts undertaken by SWFs and PPFs on an annual basis. Last week, it issued a communicate inviting for a stronger reporting and audit of climate-related activities. And this week, it participated in the roundtable around Sustainable Finance Regulations, in partnership with the UNPRI.