The proactive and effective communication of a company’s impact thesis, sustainability commitments, and investments is a critical aspect of integrating the Sustainable Development Goals (SDGs) into corporate finance. It increases the ability of financial markets to allocate capital toward the most effective sustainability solutions.
Currently, sustainability reporting—especially to investors—is focused on material environmental, social, and governance (ESG) risks that can impact a company’s risk-adjusted returns. While this is an important aspect, it does not fully support a proactive, systematic investment in sustainability solutions.
To ensure the proper functioning of capital markets and a more sustainable allocation of resources, companies must compete for capital through the proactive communication of well-articulated and unique impact theses—including targets, detailed plans, and investments to achieve their sustainability goals and how these will help create long-term value for the company and its investors.
In this section of the blueprint, we introduce guidance on communicating how the SDG strategy and investments lead to long-term value creation for a company and its investors. In addition, we look at how companies can leverage corporate governance (internal controls, auditing) to increase the quality and credibility of SDG-related information. We also look at how companies can use both existing and new channels to communicate the financial and sustainability impacts of their SDG strategies, including integrated reporting and the emerging trend of SDG finance frameworks. Finally, we look at how companies can effectively engage and communicate with the investment value chain, including data and index providers, credit rating agencies, sell-side research analysts, and investors.