Invest in UN SDG 15: Life on Land

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. Life on Land has a central place in the UN's agenda through its SDG #15 “Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss and underpinned by 12 ambitious targets. In this article, we highlight how you can contribute to UN SDG Goal 15: Life on Land 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. 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 #15: Life on Land

Land ecosystems provide a series of goods, raw materials, food, and a series of ecosystem services including the capture of carbon, maintenance of soil quality, provision of habitat for biodiversity, maintenance of water quality, as well as regulation of water flow and erosion control. Around 1.6 billion people depend on forests for their livelihoods, 2.6 billion people depend directly on agriculture for a living, 80% of forests are home to more than 80% of all species of animals, plants, and insects.

Unfortunately, human activity has adversely affected the earth's lands and forests. Over 10 million hectares of forest are destroyed each year — driven mainly by agricultural expansion. Biodiversity is declining faster than at any other time in human history with over 31,000 species threatened with extinction. Globally, one-fifth of our planet's land area is degraded — undermining the well-being of some 3.2 billion people and increasing the rate of species extinction and intensifying climate change.

Intense and unsustainable farming, the increased use and exploitation of wildlife, and the climate crisis are all driving the increased emergence of zoonotic diseases. Every year, some two million people, mostly in low- and middle-income countries, die from neglected zoonotic diseases. The same outbreaks can cause severe illness, deaths, and productivity losses among livestock populations in the developing world, a major problem that keeps hundreds of millions of small-scale farmers in severe poverty.

Sustainable Goal #15: Life on Land, invites all stakeholders to focus specifically on managing forests sustainably, halting and reversing land and natural habitat degradation, successfully combating desertification, and stopping biodiversity loss.

SDG #15 has 12 targets set for completion by 2030:

1. Conserve and restore terrestrial and freshwater ecosystems
2. End deforestation and restore degraded forests
3. End desertification and restore degraded land
4. Ensure the conservation of mountain ecosystems
5. Protect biodiversity and natural habitats
6. Promote access to genetic resources and fair sharing of benefits
7. Eliminate poaching and trafficking of protected species
8. Prevent invasive alien species on land and in water ecosystems
9. Integrate ecosystem and biodiversity in governmental planning
10. Increase financial resources to conserve and sustainably use ecosystems and biodiversity
11. Finance and incentivize sustainable forest management
12. Combat global poaching and trafficking

To track progress, the United Nations along with all related stakeholders have established 14 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 SDG 15: Life on Land with ESG ETFs

Today, impact investing has become the norm, with billions of dollars injected in the market in 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 representing employees and consumer 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 "Life on Land"

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 "Life on Land" goal, Trackinsight identifies 2 ETFs totaling $110 million in assets.

ETFs supporting SDG #15 ranked by assets under management

• U.S Vegan Climate ETF: $73 million
• Ossiam Food for Biodiversity UCITS ETF 1A: $37 million

U.S Vegan Climate ETF: $73 million

The passively managed US Vegan Climate ETF (VEGN) seeks to track the Beyond Investing US Vegan Climate Index (VEGAN) and provide exposure to large-cap US companies with ESG (Environmental, Social, Governance) considerations. In line with SDG #15, the fund avoids investments in companies whose activities directly contribute to animal suffering, destruction of the natural environment, and climate change. The index, through data from Impact Cubed IC, highlights its investment impact on Greenhouse gases, waste generation, water utilization, environmental benefit, social good, environmental harm, and social harm. The results show that VEGN has a more positive impact on the different metrics compared to the S&P 500. Accordingly, the fund's investments align with other SDGs including Goals #6, 7, 12, 14, and 15.

As of February 5th, 2022, the top 10 leading names among its 269 holdings include Tesla Inc. (4.36%), UnitedHealth Group Inc. (3.97%), Nvidia Corporation (3.9%), Visa Inc. (3.7%), Mastercard Inc. (3.46%), Adobe Systems Inc. (2.67%), Salesforce.com (2.41%), Alphabet Inc. Class A (2.41%), Alphabet Inc. Class B (2.39%), and Broadcom (1.51%).

VEGN has a total expense ratio of 0.6% and trades on the New York Stock Exchange (NYSE). Since the fund's inception on September 10th, 2019, the fund has generated a cumulative return of 62%.

Ossiam Food for Biodiversity UCITS ETF 1A: $37 million

The actively managed Ossiam Food for Biodiversity UCITS ETF 1A (F4DE/U) provides exposure to large and mid-cap companies active in the agriculture and food sector within a selected list of developed countries. The fund managers apply a systematic approach and use ESG data from third-party providers to filter companies with improved ESG profiles and the ones that contribute to quantifiable reductions in the biodiversity footprint of the agriculture and food sector. Around 70 stocks are selected from the investment universe of Solactive GBS World Developed Markets Large & Midcap Index NTR EUR (~250 stocks). The final portfolio is spread across different sectors of the agriculture and food industry, with packaged food producers, restaurants, and retail outlets being the largest represented sectors.

As of year-end 2021, the fund's top 10 holdings include Costco Wholesale Corp. (7.87%), Starbucks Corp. (7.27%), Unilever PLC (7.18%), McDonald's Corp. (6.85%), Nestle SA (6.55%), International Flavors & Fragrances (3.02%), Koninklijke DSM (2.94%), Chipotle Mexican Grill (2.93%), Ocado Group (2.53%), and Compass Group (2.46%).

The fund has a total expense ratio of 0.75% and trades on the Deutsche Börse Xetra (F4DE, EUR), SIX Swiss Exchange (F4DE, EUR) and Borsa Italiana (F4DE, EUR). Since its inception on December 30th, 2020, F4DE has generated a cumulative gain of +12.45% (as of January 31st, 2022).

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