Five years on the United Nations is calling for significant new investment to address the SDGs. In 2019 the UN called for “a decade of ambitious action” to deliver the goals by 2030. There’s an estimated gap of $US2.5 trillion to $US3 trillion per year to achieve the SDGs in developing countries. But the potential dividends of that investment are significant. Achieving the SDGs could open up $US12 trillion of market opportunities and create 380 million new jobs, the UN believes. Action on climate change could result in US$26 trillion worth of savings by 2030. A “fundamental shift in the international financial system is needed to align global economic policies and financial systems with the 2030 agenda”, UN Secretary-General António Guterres said in 2019. “National policy frameworks are key to reducing risks, creating an enabling business environment, incentivising investment in public goals and aligning financial systems with long-term sustainable development.”

Our taxonomy takes the most pressing global environmental and social problems and links them to the solutions sold by companies today. We believe that by analysing these solutions our taxonomy allows us to identify companies with a strong chance of producing market-beating, long-term returns. We use a rigorous approach to testing the potential of each of the solutions to deliver a large-scale impact. We do this by formulating a Theory of Change and looking at the expected total addressable market for each of them. You can download a copy of Regnan’s Sustainable Develoment Goals Taxonomy here (PDF).

Health & Wellbeing Improved life expectancy and quality

Energy Transition Transforming the energy system to power a low-carbon economy

Circular Economy Resource efficiency, reusability and recyclability

Future Mobility Low carbon transportation

Food Security Sustainable food supply and productive farmlands

Education Access to quality education

Financial Inclusion Financial Services for underserved populations

Water Preservation of and access to water

We aim to achieve positive impact by:

Keeping companies on mission

We engage with management to influence strategy and try to keep them focused on business areas that contribute to solutions.

Engaging to reduce negative impacts

We talk to the management of portfolio companies about issues such as the environmental footprint of their supply chains and working conditions in their suppliers’ factories. By reducing negative impact, we aim to magnify total net positive impact.

Supporting management

We invest in companies we believe should outperform the market in the long term. Assuming we retain our initial conviction, sometimes this means accepting underperformance in the short term, because the management prizes long-term potential over the next quarter’s earnings. Our support, as a long-term investor, increases the company’s ability to stay impactful.