Invest in UN SDG 13: Climate Action

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. Climate Action has a central place in the UN's agenda through its SDG #13 “Take urgent action to combat climate change and its impacts" and underpinned by 5 ambitious targets. In this article, we highlight how you can contribute to UN SDG Goal 13: Climate Action 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, know-how, 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 #13: Climate Action

Climate change is a growing threat to our entire civilization. It is disrupting national economies and affecting lives and livelihoods, especially for the most vulnerable.

The world witnessed the warmest decade (2010-2019) with an average +1.2 °C increase in decadal temperature anomalies (Source: NASA GISS) and the second warmest year on record, 2019. Carbon dioxide (CO2) levels and other greenhouse gases also rose to new records in 2020. With the existing climate model, global temperatures are expected to rise as much as 3.2 °C by the end of the century.

In December 2015, 196 nations adopted the Paris Agreement, in which all countries committed to take action to address climate change. The main target was to keep global average temperature rise to +1.5 °C above pre-industrial levels and avoid the worst-case climate scenario.

Many businesses and investors have also aligned their values and capital to lower their emissions, not just because it is the right thing to do, but because it makes economic and business sense as well. According to the Climate Policy Initiative, climate-finance flows have been steadily increasing, from $360 billion in 2012 to an estimated $608-622 billion in 2019. However, flows remain far below the levels of investment needed — estimated at $1.6-3.8 trillion — to limit global warming within the Paris Agreement agreed level.

With the goal of fending off the world's biggest threat, the SDG Goal #13: Climate Action, invites all stakeholders to take urgent action to combat climate change and its impacts.

SDG #13 has 5 targets set for completion by 2030:

1. Strengthen resilience and adaptive capacity to climate-related disasters
2. Integrate climate change measures into policies and planning
3. Build knowledge and capacity to meet climate change
4. Implement in the U.N. framework convention on climate change
5. Promote mechanisms to raise capacity for climate planning and management

To track progress, the United Nations along with all related stakeholders have established 9 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 promote Responsible Consumption and Production with ESG ETFs

Today, impact investing has become the norm, with billions of dollars injected in the market inadequately 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 Climate Action

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 "Climate Action" goal, Trackinsight identifies 269 ETFs totaling $90 billion in assets.

ETFs supporting SDG #13 ranked by assets under management

• iShares MSCI USA SRI UCITS ETF: $9.47 billion
• iShares MSCI World SRI UCITS ETF: $5.27 billion
• Amundi Index MSCI USA SRI UCITS ETF: $5.05 billion
• iShares MSCI Europe SRI UCITS ETF: $4.88 billion
• Xtrackers MSCI USA ESG UCITS ETF: $4.65 billion
• UBS ETF - MSCI World Socially Responsible UCITS ETF: $4.06 billion
• iShares MSCI EM SRI UCITS ETF: $3.60 billion
• Xtrackers MSCI World ESG UCITS ETF: $3.45 billion
• Amundi Index MSCI Europe SRI UCITS ETF: $3.30 billion
• Amundi Index MSCI World SRI - UCITS ETF: $2.59 billion

For the full list of Climate Action ESG ETFs click here.

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