Invest in UN SDG 16: Peace and Justice with ESG ETFs

The United Nations Sustainable Development Goals (SDGs) are 17 goals that all UN Member nations have agreed to achieve by 2030 and adopted by all 193 UN member states. They set out an ambitious mission to eradicate issues that affect our society and environment. Peace, Justice and Strong Institutions have a central place in the UN's agenda through its SDG #16 “Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels" and underpinned by 12 ambitious targets. In this article, we highlight how you can contribute to UN SDG Goal 16: Peace, Justice and Strong Institutions 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, Justice and 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 #16: Peace, Justice and Strong Institutions

People have the right to be free from all forms of violence and feel safe regardless of their social status, religion, race, or sexual orientation. Insecurity, conflicts, weak institutions, and poor access to true justice remain impediments to sustainable development.

Though progress has been made in recent years, societies remain far from attaining a utopian status. According to the United Nations (UNSTATS), the number of people fleeing war, persecution, and conflict surpassed 79.5 million in 2019, the highest level ever recorded. Every day, 100 civilians are killed in armed conflicts despite protections under international law.

Children of the world are still extremely vulnerable with one in four deprived of legal identity through lack of birth registration, often limiting their ability to exercise rights in other areas. Additionally, violence has affected more than 1 billion children around the world and costs societies up to $7 trillion a year, while child online sexual abuse reports to NCMEC have grown from 1 million in 2014 to 45 million in 2018.

Actions to suppress freedom of speech and to express views have been a major deterrent to transparency and accountability. From 2015 to 2019, the United Nations recorded at least 1,940 killings and 106 enforced disappearances of human rights defenders, journalists, and trade unionists across 81 countries.

Judiciary and police are still among the most exposed institutions to corruption and bribes in third-world countries. Meanwhile, corruption, bribes, theft, and tax evasion in developed countries cost around $1.26 trillion per year.

Sustainable Goal #16 "Peace, Justice and Strong Institutions" invites all stakeholders to work together to implement lasting solutions to reduce violence, deliver justice, combat corruption, and always ensure inclusive participation.

SDG #16 has 12 targets set for completion by 2030:

1. Reduce violence everywhere
2. Protect children from abuse, exploitation, trafficking, and violence
3. Promote the rule of law and ensure equal access to justice
4. Combat organized crime and illicit financial and arms flow
5. Substantially reduce corruption and bribery
6. Develop effective, accountable, and transparent institutions
7. Ensure responsive, inclusive, and representative decision-making
8. Strengthen the participation in global governance
9. Provide universal legal identity
10. Ensure public access to information and protect fundamental freedoms
11. Strengthen national institutions to prevent violence and combat terrorism and crime
12. Promote and enforce non-discriminatory laws and policies

To track progress, the United Nations along with all related stakeholders have established 24 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 16: Peace, Justice and Strong Institutions with ESG ETFs

Today, impact investing has become the norm, with billions of dollars injected into the market in sustainable and responsible investments. These funds increasingly focus on opportunities aligned with UN's SDGs and ESG initiatives (Environmental, Social, Governance). Investors' values have spilt over corporate actions around the world. Today, corporate social responsibility departments (CSR) go from being a cost burden to a must-have 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 " Peace, Justice and Strong Institutions"

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. Regarding the " Peace, Justice and Strong Institutions " goal, Trackinsight identifies 17 ETFs totalling $12.9 billion in assets.

ETFs supporting SDG #16 ranked by assets under management

1. First Trust NASDAQ Cybersecurity ETF - USD (CIBR): $ 5,205 million
2. L&G Cyber Security UCITS ETF (ISPY): $2,789 million
3. ETFMG Prime Cyber Security ETF (HACK): $1,986 million
4. Global X Cybersecurity ETF (BUG): $1,027 million
5. iShares Cybersecurity and Tech ETF (IHAK): $558 million
6. BetaShares Global Cybersecurity ETF (HACK): $520 million
7. First Trust Nasdaq Cybersecurity UCITS ETF (FCBR): $320 million
8. Evolve Cyber Security Index ETF (CYBR): $190 million
9. Rize Cybersecurity and Data Privacy UCITS ETF (RCRS): $130 million
10. WisdomTree Cybersecurity UCITS ETF (WCBR): $70 million
11. WisdomTree Cybersecurity Fund (WCBR): $37 million
12. Evolve Cyber Security Index ETF – CAD (CYBR.B): $27.98 million
13. First Trust Nasdaq Cybersecurity ETF – CAD (CIBR): $24.78 million
14. Simplify Volt Cloud and Cybersecurity Disruption ETF-USD (VCLO): $13.62 million
15. Evolve Cyber Security Index ETF - USD (CYBR.U): $6.42 million
16. ProShares Ultra Nasdaq Cybersecurity - USD (UCYB): $3.26 million
17. Horizons GX Cybersecurity Index ETF – CAD (HBUG): $1.69 million

At first glance, it is easy to notice that the line-up is comprised of Cybersecurity ETFs. So how does investing in Cybersecurity contribute to SDG #16?

Simply, information systems can provide the infrastructure for transparency and increase the strength of peace and justice institutions. But while these systems can improve the delivery of justice, baleful manipulation of information and data can threaten core democratic institutions. Organized criminal groups are increasingly engaging in cybercrime. Governments and organizations need to equip lower- and middle-income countries with the Cybersecurity infrastructure and expertise to combat this new form of crime. It will help safeguard populations from this activity and give police the capacity to identify and prosecute cybercrime.

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