Developing a specific SDG impact thesis

The vision of the CFO Principles is to empower every company—across all industries and countries—to develop its own specific impact thesis that can be translated into strategic goals and investments and financed by an increasing pool of investors (mainstream and specialized) looking to maximize the impact of their portfolios. This will, in turn, help to create a diverse and vibrant market for sustainable investments.

However, current trends in the market suggest that companies are struggling to either formulate or communicate a truly unique impact thesis—beyond a few core SDGs, assets, and industries:

  • Sustainable finance taxonomies tend to focus on a subset of industries and, within those, on a subset of activities, reducing the representation of sectors within the sustainable finance market.
  • Targets set by companies when raising sustainable finance tend to revolve around only a few key performance indicators (KPIs), e.g., greenhouse gas (GHG) emissions, gender diversity.

The goal of this guidance is to identify and promote diverse ways in which companies can contribute to the SDGs and introduce an expanded typology of corporate impact theses that can be relevant across industries and geographical areas, including:

  • new business models from growing constraints and opportunities presented by sustainability
  • SDG impacts along the company’s entire value chain (sourcing, operations, products, and services)
  • SDG impacts during the sustainability transition that is experienced by many traditional industries
  • the impact of foreign direct investment (FDI) on economic and social development in emerging markets
  • the impact of banks and other private financial institutions in providing financial intermediation and access to finance

A company’s SDG impact thesis can be composed of several types of impact. For example: A bank providing financial intermediation in underserved markets can also promote diversity in its operations. An electric utility can develop new business models for renewable energy, while ensuring a just social and economic transition for non renewable assets.