Explore the three biggest challenges to achieving the SDGs and how to resolve them

Challenge 1: Awareness

Challenge 1: Lack of public awareness of the SDGs

Lack of Awareness

There is little public knowledge that the UN SDGs exist. And simple awareness of the SDGs is not the same as knowledge of or familiarity with them. In a 2016 Glocalities survey carried out across 24 countries, just 1% of citizens said they knew the SDGs “very well.”

UBS’s September 2018 Investor Watch survey reports that fewer than half of millionaires surveyed are very or extremely familiar with the term “sustainable investing” and just 38% have the same level of awareness of “impact investing.

“How to increase awareness?

Use multiple media channels to increase awareness of the SDGs
Align investment solutions with investors' sustainability interests

71% of consumers would consciously avoid buying from firms with perceived negative environmental, social, and governance (ESG) practices – people do care about sustainability

Source: OECD Development Communication Network, What People Know and Think About the Sustainable Development Goals, as of June 2017

Challenge 2: Simplification

Challenge 2: Sustainability is too complex

Lack of simplicity

“What is sustainability?” remains a valid question for today’s sustainable investors, philanthropists, and consumers.

Many institutions linked to sustainability list very complex criteria for investors, philanthropists, and consumers to use when making a sustainability decision.

Investors are overwhelmed by large amounts of sustainability data. For example, the World Bank Group is working hard to build more complete datasets for SDG needs and is currently engaging in around 300 active projects to improve data collection at a cost of USD 200m annually.

What can be done to simplify?

Simplify, standardize, and mainstream corporate sustainability data reporting
Define impact investment and impact measurement coherently and consistently
Name sustainable investing (SI) strategies in a clear, consistent manner so they can be universally adopted

Over 40% of institutional investors report that an absence of standardized terms and reporting holds them back from integrating ESG factors into their investment processes

Percentage of UBS Investor Watch survey participants that are "extremely familiar" or "very familiar" with sustainable investing (SI) terms. Source: UBS Investor Watch Survey - Return on values: most sustainable investors expect better performance, bigger impact, as of September 2018.

Challenge 3: Contribution

Challenge 3: There aren't enough sustainable solutions that really make a difference

Lack of contribution

Inconsistent application of sustainability factors (such as failing to integrate ESG factors fully) across asset classes hampers investors’ ability to contribute to the SDGs. Sustainable investors who rely on external rating systems to select instruments can also face confusion when attempting to match investments to their values, given the large variation in how rating firms judge the ESG factors that matter most.

Many philanthropic foundations also do not fully align their operations with their impact mission, as seen in the ways they invest their endowment capital. Fewer than half of European foundations manage their endowment capital in a sustainable way.

How to make a contribution

Use publicly-traded strategies in traditional portfolios that focus on market-rate performance while also having an actual positive social and environmental impact
Adopt a true 100% SI asset allocation that seeks to deliver market-rate returns and have verifiable positive impact
Focus on collective and collaborative philanthropy

The UN-sponsored Principles for Responsible Investing (PRI) estimates that annual SDG investment needs hover near USD 5–7trn.

Source: UBS Global Wealth Management Chief Investment Office, as of November 2018. For illustration purposes only.