Invest in UN SDG 10: Reduced inequalities with ESG ETFs

The United Nations Sustainable Development Goals (SDGs) are 17 goals that all UN Member nations have agreed to achieve by 2030. They set out an ambitious mission to eradicate issues that affect our society and environment. Reduced Inequalities have a central place in UN's agenda through its SDG #10 “Reduce inequality within and among countries" and underpinned by 10 ambitious targets. In this article we highlight how you can contribute to UN SDG Goal 10: Reduced inequalities with ESG Exchange-Traded Funds (ETFs).

17 SDGs for a better future

The Sustainable Development Goals (SDGs) are 17 goals with 169 targets set by the United Nations in 2015 as a global initiative to tackle issues that affect humans and the environment we live in, with the hope of achieving tremendous progress by 2030.

The 17 sustainable development goals (SDGs) to transform our world:

1. No Poverty
2. Zero Hunger
3. Good Health and Well-being
4. Quality Education
5. Gender Equality
6. Clean Water and Sanitation
7. Affordable and Clean Energy
8. Decent Work and Economic Growth
9. Industry, Innovation and Infrastructure
10. Reduced Inequality
11. Sustainable Cities and Communities
12. Responsible Consumption and Production
13. Climate Action
14. Life Below Water
15. Life on Land
16. Peace and Justice Strong Institutions
17. Partnerships to achieve the Goal

Each goal has several targets and is measured quantitatively by indicators provided by private and public entities. The creativity, knowhow, technology, and financial resources from all stakeholders are necessary to achieve the SDGs in every context. The beauty of these goals is their interrelation, meaning that action in one area will affect outcomes in others. The development of those goals must balance social, economic and environmental sustainability. 

To fully meet the 17 Sustainable Development Goals, the United Nations Conference on Trade and Development (UNCTAD) estimates that an investment of $3.9 trillion is needed on average each year from 2015 to 2030 for the developing nations alone.

What is UN SDG GOAL #10: Reduced Inequalities

Sustainable Development Goal #10 focuses on reducing inequality within and among countries. It calls for reducing inequalities in income of all people regardless of their status (religion, sex, race, etc.). The goal also addresses inequalities among nations, including those related to representation, migration, and development aid. Progress towards that goal has already been made, but inequality remains a key barrier in social progression, especially in the least developed countries.

According to the 2022 World Inequality Report, the poorest half of the world's population owns just 2% of the global wealth, while the richest 10% own 76%. U.N. data from 44 countries and territories for the period 2014–2020 shows that almost 20% of their people, mostly women, reported a discrimination incident on at least one of the grounds prohibited under international human rights law.

According to UNHCR, the number of forcibly displaced people worldwide grew to 82.4 million at the end of 2020 as a result of persecution, conflict, violence, human rights violations and events seriously disturbing public order. In 2020 alone, 4,000 died or disappeared along migratory routes worldwide, with an increase in fatalities on some routes.

Humanity has a long way to go before reaching greater levels of equality, and SDG #10 is the steppingstone.

SDG #10 has 10 targets set for completion by 2030:

1. Reduce income inequalities.
2. Promote universal social, economic and political inclusion.
3. Ensure equal opportunities and end discrimination.
4. Adopt fiscal and social policies that promotes equality.
5. Improved regulation of global financial markets and institutions.
6. Enhanced representation for developing in financial institutions.
7. Responsible and well-managed migration policies.
8. Special and differential treatment for developing countries.
9. Encourage development assistance and investment in least developed countries.
10. Reduce transaction costs for migrant remittances.

To track progress, the United Nations along with all related stakeholders have established statistical indicators attached to each target. It helps parties adapt and improve actions toward making the goal attainable by 2030. These indicators can be tracked on the SDG Tracker.

Investors can support reducing inequalities with ESG ETFs

Today, impact investing has become the norm, with billions of dollars injected in the market for adequately screened investments, focusing on entities that align their activities with SDG and ESG initiatives (Environmental, Social, Governance). Corporate Social Responsibility departments (CSR) went from being a cost burden to an existential necessity that represents employees and consumers values.  

The change in investors' mindsets has given birth to mutual funds and ETFs that provide exposure to securities that work towards achieving ESG or SDG goals. It allows them to invest in opportunities that can provide wealth accumulation while making an impact.

List of ESG ETFs promoting reduced inequalities

Trackinsight analyzes the fact sheets and other publicly available information of all ETFs in the ESG universe. The information is screened for statements that show an explicit tilt towards specific Sustainable Development Goals. In relation to the "Reduced Inequalities" goal, Trackinsight identifies 4 ETFs with a total of $165 million AuM.

List of ETFs supporting SDG #10

• Impact Shares Affordable Housing MBS ETF (OWNS): $101.74 million
• Impact Shares NAACP Minority Empowerment ETF (NACP): $37.88 million
• iShares Refinitiv Inclusion and Diversity UCITS ETF (OPEN): $35 million
• Satrix Inclusion and Diversity ETF: $1.05 million

The Impact Shares Affordable Housing MBS ETF or OWNS is the largest ETF aligning its focus with SDG #10. Launched on July 26th, 2021, OWNS invests in agency mortgage-backed securities (MBS) backed by pools of mortgage loans provided to minorities, low to moderate income families and to families living in poor neighborhoods. Home loans include those in census tracts where more than 50% of the population is non-white and at least 40% of the population is living at or below the poverty line.

An investment in OWNS ETF supports SDG #10 by bridging the racial wealth gap and addressing the affordable housing crisis in the U.S., thus reducing inequalities and making a positive impact on the well-being of individuals, families, and communities.

OWNS has a net expense ratio of 0.30% and trades primarily on the NYSE Arca.

Keep reading:

• UN Global Compact: What is it?
• ETFs aligned with EU Climate Benchmarks
• 5 things you should consider when buying ESG ETFs

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