UBS Asset Management has partnered with scientists at the City University of New York (CUNY) and Harvard University to help investors make more responsible investments.
The partners have developed a framework to inform investment decisions that make positive contributions to sustainable environmental stewardship and human well-being.
"Other frameworks for measuring corporate sustainability focus on how internal corporate production processes at the facility level support environmental integrity or human beneficiaries, but give limited guidance for assessing the longer-term impact of business practices," said co-leader Dr. Charles J. Vörösmarty. "Our proposed framework relies on scientifically-based metrics to help investors evaluate how companies' actions, products and services support the environment and human well-being. Indeed, this is a new calculus for sustainable investing."
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The academics are testing the framework by analyzing the environmental and health benefits of a U$2.1 billion portfolio of public equities managed by UBS Asset Management on behalf of PGGM, the Dutch pension fund.
Four challenge areas are being considered: water, climate change mitigation, human health and food security.
The research suggests a new way to assess the sustainability of corporations for investors, who are increasingly interested in this investment approach.
"As an investor, one of our most important goals is to measure the tangible effects of our investments against the Sustainable Development Goals we selected," said Piet Klop, senior adviser of responsible investment at PGGM.
"The approach that CUNY and Harvard have pioneered is of great interest to us due to its focus on product impacts and a methodology that is scientific and scalable."
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