How do you align your fund strategy and performance with the UN Sustainable Development Goals?

1 Why ESG reporting matters

ESG reporting is not only a regulatory requirement, but also a competitive advantage. Institutional investors are increasingly looking for funds that demonstrate positive impact and risk management on environmental, social, and governance (ESG) issues. By reporting on your ESG performance, you can showcase your fund's value proposition, differentiate yourself from other fund managers, and attract and retain more capital.

2 What to include in your ESG report

Your ESG report should cover four main areas: your ESG policy, your ESG integration, your ESG outcomes, and your ESG engagement. Your ESG policy should explain your fund's approach and objectives on ESG issues, and how they align with the UN SDGs. Your ESG integration should describe how you incorporate ESG factors into your investment process, and how they affect your portfolio construction and risk management. Your ESG outcomes should highlight the ESG performance and impact of your fund, and how they contribute to the UN SDGs. Your ESG engagement should showcase how you interact with your portfolio companies, stakeholders, and peers on ESG matters, and how you influence positive change.

3 How to measure and report your ESG performance

To measure and report your ESG performance, you need to use relevant and reliable indicators and frameworks. There are various ESG standards and tools available, such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), the Task Force on Climate-related Financial Disclosures (TCFD), and the Principles for Responsible Investment (PRI). You should select the ones that best suit your fund's strategy, sector, and geography, and follow their guidelines and methodologies. You should also use quantitative and qualitative data, and provide clear and consistent evidence and examples.

4 How to communicate your ESG report

Your ESG report should be clear, concise, and compelling. It should tell a coherent and consistent story of your fund's ESG journey, achievements, and challenges. It should also address the expectations and interests of your institutional clients and prospects, and demonstrate how your fund meets their ESG criteria and objectives. You should use various formats and channels to communicate your ESG report, such as online platforms, newsletters, webinars, and meetings. You should also solicit feedback and dialogue, and update your ESG report regularly.

5 How to improve your ESG reporting

ESG reporting is an ongoing process that requires continuous improvement. You should always monitor and evaluate your ESG performance, and identify areas for enhancement. You should also keep up with the latest ESG trends, regulations, and best practices, and adapt your ESG policy and integration accordingly. You should also benchmark your ESG performance against your peers and industry standards, and seek external verification and assurance.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?