Giving Compass' Take:

• Inspired by Steven Pinker' book, Enlightenment Now: The Case for Reason, Science, Humanism, and Progress, the writers for this SSIR article discuss how we must analyze the progress we have made on global issues.

They share how investors can become more enlightened when taking an SDG-aligned approach. The first recommendation: Read the Sustainable Development Goals UN Resolution. 

• Read the seven reasons why we need to step up action on the SDGs. 

We’ve been reading Enlightenment Now: The Case for Reason, Science, Humanism, and Progress, Steven Pinker’s recent book that Bill Gates called in his blog, “my new favorite book of all time.” We can see why: Pinker argues that the ideals of the Enlightenment—all centered on reason—brought the world untold progress and can help us make progress against the challenges of today.

This is important, because big problems remain: Climate change looms, 700 million people continue to live in extreme poverty, nearly half of all deaths in children under age five are attributable to undernutrition. Pinker calls for the continuation, or even acceleration, of an enlightened approach to overcome these challenges.

Many of them, of course, are now embedded in the UN Sustainable Development Goals(SDGs), including ending poverty in all its forms everywhere, and many investors have started to reference the SDGs in their investment products.

With expectations of what impact investment can do to solve global problems already sky-high, with large investors scrambling to demonstrate their commitment to sustainability, and given the appeal and accessibility of the colorful SDG pictograms, one can see how this way of thinking would spread like wildfire.

This SDG mapping is, at best, a good starting point, in that it’s making more people “SDG aware.” At its worst, however, it’s giving people the sense that there’s not much to it and that if we keep this up, we will soon achieve the SDGs. To the SDG investment community, we say: Wake up and smell the coffee.

Much of what passes for SDG investing now is investing in companies and organizations that institutional investors were already investing in and that only have a tangential link to solving the problems as defined by the United Nations.

Another big slice of the SDG investing pie is made up of investments in companies and activities that are, in fact, addressing one or more of the SDG challenges, but were already doing that before the investment was made. Are these investments facilitating or accelerating the activity? Usually not.

Read the full article about SDG impact investing by Harald Walkate & Cary Krosinsky at Stanford Social Innovation Review