Key trends supporting impact investing*
Major investment needs - opportunity for private markets to contribute
To deliver on the United Nation’s Agenda 2030 and the 17 SDGs, annual investments in the range of USD$ 5-7 trillion are required. Investments in sustainable development are growing and there is evidence that investments promoting the SDGs make economic sense, with estimates highlighting that achieving the SDGs could potentially result in US$ 12 trillion of market opportunities and create 380 million new jobs. In addition, experts forecast that action on climate change could result in savings of about US$ 26 trillion by 2030. The SDGs are increasingly incorporated into public budgets and development initiatives and many countries have taken steps to ‘green’ their financial systems. Trill Impact sees all of these headwinds as providing a significant opportunity to contribute to the global sustainability agenda by deploying capital to high-impact private market investments.
Sustainability in lifestyle decisions
Consumer preferences for responsibly produced goods and services have long outgrown their niche status and become more mainstream. Trill Impact's view is that today consumers all over the world actively seek ways to promote sustainability through lifestyle decisions regarding diet, transport, recycling, water consumption, investment and the like.
New rules and regulations
Since September 2015, when the SDGs were adopted by world leaders, countries across the world have mobilized efforts towards the SDGs by developing and implementing new rules and regulations, forming part of each government's action plan for the 2030 Agenda. In the EU, recent climate change policies and green deals are now being adopted and enforced which we anticipate will have a much more fundamental impact on the way goods and services are produced given non-compliance risk.
Sustainable investments have generated superior returns
Sustainable investments have hit a record high and industry research has strengthened the argument that there is correlation between sustainability and listed equity risk-adjusted returns - better management of sustainability issues and risks are correlated to better corporate financial performance, cost of capital, market valuations and volatility.
*Sources: see links below