BCI's Jennifer Coulson on a Platform Making SDGs More Investable

Gill Wadsworth of ESG Investor recently interviewed Jennifer Coulson, Senior Managing Director, ESG at BCI, who explains how an asset owner-led platform is making SDGs more investable:

Last month UN Secretary General António Guterres issued a stark warning: “As the world faces cascading and interlinked global crises and conflicts, the aspirations set out in the 2030 Agenda for Sustainable Development are in jeopardy.”

In the Sustainable Development Goals Report 2022, Guterres says a disastrous combination of the Covid-19 pandemic entering its third year, Russia’s invasion of Ukraine with its associated impacts on the food, energy, humanitarian and refugee crises, and a “fully-fledged climate emergency” mean “we need an urgent rescue effort for the [17 Sustainable Development Goals (SDGs)] ”.

“Greater investment in data infrastructure is needed to efficiently target investments now, anticipate future demands, avoid crises from descending into full-blown conflict and plan the urgent steps needed to achieve the 2030 Agenda,” Guterres concludes.

Aligning with SDGs

Part of the solution might be found in the Sustainable Development Investments Asset Owner Platform (SDI AOP), developed by a community of institutional investors looking to make it easier to align investments with the UN SDGs.

Created by institutional investment behemoths APG, AustralianSuper, British Columbia Investment Management Corporation (BCI) and PGGM, SDI AOP offers a standard framework – built using artificial intelligence based on its own taxonomy – which directs investors to solutions that contribute to the SDGs and develops rules for SDIs.

The platform is already proving popular with the investment community. This April the world’s largest asset manager, BlackRock, announced it would use SDI AOP’s dataset to “advise clients on ESG portfolio construction, research, reporting, product creation and evolution”.

Jennifer Coulson, Senior Managing Director, ESG at BCI, says: “We have got a bit of momentum behind us and more of a track record. People are really interested in the idea of standardisation because there are so many different [sustainable investment] frameworks.”

She adds: “The community is really interested in getting behind a credible framework and the SDI AOP fills that gap. Being driven by asset owners is the key to the whole initiative and provides a lot of credibility.”

According to Coulson, the involvement of the two Dutch asset owners, APG and PGGM, has been critical in transitioning the SDGs from a government-focused initiative to ones that investors can support, due to the work on formulating the SDI AOP’s taxonomy.

“When the UN first announced the SDGs there was a period where investors were asking how to translate the goals into an investment framework, because they were initially more about government and policymaking. There was a lot of work by a lot of different players to really map how to translate the SDGs into something that is investable.”

She continues: “We all have to respect our fiduciary mandates, so we needed that translation to happen. I must give APG and PGGM a lot of credit for that because they’re the ones that developed the taxonomy in the first place.”

Negative contributions

The taxonomy is a reference point for asset owners, who can select portfolio components depending on their mandates, policies, and the asset classes in their portfolio.

The SDI classification focuses on companies’ product and service-related contributions to the SDGs, and is based on financial metrics, most often revenues.

For some sectors, alternative metrics will be used where appropriate such as volumes of products or lending activity, in the case of financial institutions.

The SDI classification is based on current financial data, but future SDI AOP products will focus on forward looking metrics such as patents, capex and/or R&D expenditures.

This August the SDI AOP added negative contributions to the taxonomy to “provide a more comprehensive picture”. If a company negatively contributes more than 10% to an SDG it cannot be considered sustainable.

The current classifications identify almost 2,000 equity and bond issuers from a universe of 8,700 as either majority SDI – where more than 50% of revenue comes from products and services aligned with SDGs or – decisive SDI where 10-50% of revenues are aligned.

This taxonomy, Coulson says, enhances asset owners’ engagement with investee companies.

“Anyone who has looked at companies’ sustainability reports can see how much they are genuinely positioning themselves on the SDGs. What they say they are doing could be a little bit of a stretch in terms of their actual business. If the heart of their business does not necessarily align with the SDGs, then that’s a perfect lever to engage and say ‘according to our data, the revenues and the actual business lines you have, do not necessarily support your assertions’. It becomes a good dialogue tool to get into more detail about how companies say they contribute to the SDGs.”

Informing investment strategy

The SDI AOP is increasingly informing BCI’s sustainable investment strategy, graduating from being a reporting tool to one used by the investment team.

Coulson says: “It always takes a while to change processes and introduce new things. The Dutch funds are much further along, having been involved from the very beginning. Slowly, we’ve been bringing it into more of our active management strategies. My team, who are responsible for the ESG analysis and working with the investment teams, have been building the dataset into the investment process to showcase companies that are further along in advancing the SDGs.”

BCI, which recently published its 2021 ESG annual report, uses dashboards to identify which organisations are aligned with individual SDGs.

“It’s another data point and a new lens to look at an investment through. Obviously, it’s not the only lens but it brings another perspective into the conversation.”

While the platform is more relevant to active managers since they are not bound to an index like their passive counterparts, Coulson says ADI AOP is suitable for the entire investment community.

“This is not just for a concentrated active portfolio. There are many use cases, and we can design all kinds of passive products for those who are really interested. BlackRock uses the dataset, and they’ve worked quite closely with APG to design a suite of [SDI] indices which has the potential to influence a lot of capital. Passive managers have so much in AUM at this point that, if we can really start to shift some of that capital, then there is a lot of upside for the SDGs.” Coulson says.

European regulation is also driving asset owners to the platform, specifically the Sustainable Finance Disclosure Regulation (SFDR).

This March NN Investment Partners subscribed to the SDI AOP saying it will use the data to “feed into their proprietary frameworks and models to identify companies that are considered sustainable investments in the context of the SFDR”.

In the future, the asset manager plans to expand on its existing client reporting capabilities using the data to “optimise reporting on SDG exposures on its strategies”.

Coulson says a combination of the SFDR and the US Securities and Exchange Commission’s May announcement that it would enhance funds’ ESG disclosures are important for the platform.

“There’s no question that regulation has been a big driver and not only in Europe; we see it driving activity further around the globe. Funds need to have a credible way to back up their ESG integration more broadly, and their claims around SDG specifically. This data set can play a role there.”

Despite the increasing signs of progress, Coulson would like to see more movement from asset owners towards SDG alignment.

She says: “The world doesn’t turn on a dime, but as some of the more tangible impacts of climate change become more apparent, the capital markets may shift more quickly. As the saying goes; things move pretty slow until they don’t.”

Great interview with Jennifer Coulson, Senior Managing Director, ESG at BCI who not only explains the genesis and benefits of the SDI Asset Owner Platform (SDI AOP), she also gives proper credit to Dutch pension asset managers APG and PGGM for developing the taxonomy behind this platform. 

You can read more about this platform here and below:

Over the years, there has been an increasing appetite for investing in the UN Sustainable Development Goals (SDGs), but the lack of quality data to identify company contributions has been a challenge for companies and investors alike. Until now.

Comprised of APG, AustralianSuper, British Columbia Investment Management Corporation and PGGM, we are an asset owner-led platform committed to accelerating the market adoption of Sustainable Development Investments (SDIs). 

Powered by artificial intelligence from Entis combined with human intelligence, we’ve introduced a new standard for investments into SDGs which is available through analytics and index provider, Qontigo.

A shared understanding and standard for SDIs can greatly enhance engagement with companies, regulators and other stakeholders. As can disclosures by companies and investors alike in relation to SDGs.

That last part is critical, in order to enhance engagement with companies, regulators and stakeholders, you need a shared understanding and standard for SDIs.

As Jennifer states: “There’s no question that regulation has been a big driver and not only in Europe; we see it driving activity further around the globe. Funds need to have a credible way to back up their ESG integration more broadly, and their claims around SDG specifically. This data set can play a role there.” 

I recommend you read more about why SDIs matter. The bottom line is this: "Investors can engage with companies more effectively if they better understand companies’ contribution to the SDGs."

I recently covered BCI's 2021 ESG Annual Report but I didn't cover the SDI AOP information which is provided below:

In 2020, BCI and our partners, APG (Netherlands), AustralianSuper (Australia) and Stichting Pensioenfonds Zorg en Welzijn (PGGM, Netherlands), with combined assets under management of US $1 trillion, established the Sustainable Development Investments Asset Owner Platform (SDI AOP).

It uses artificial intelligence to set a global standard for classifying sustainable development investments. Through a standard definition, taxonomy and data source, investors can use data to identify public companies that derive revenues from products and services that contribute positively to achieving the UN Sustainable Development Goals (SDGs).  

The current classifications identify almost 2,000 equity and bond issuers from a universe of 8,700 as either “Majority SDI,” where more than 50 per cent of revenues are derived from products and services aligned with the SDGs, or “Decisive SDI,” where 10 per cent to 50 per cent of revenues are aligned. 

Partners and subscribers to the platform are using the data in various ways: to build indices (iSTOXX PPF Responsible SDG Index), as an input into their ESG integration processes, to inform asset allocation decisions, and to accelerate SDG-aligned investments. BCI is using SDI AOP data to strengthen our detailed ESG assessments in public markets by considering the degree to which a particular company or issuer contributes to the SDGs. We also use the data to monitor and calculate our exposure to climate-related opportunities across BCI’s entire portfolio.

This platform is gaining more prominence among institutional investors and well-known asset managers like BlackRock and Bridgewater which are adopting it in their portfolios to assess SDG-alignment.

BCI identifies SDGs in its public market engagement as part of a wider assessment they use to track and engage companies.

But as the article states, the SDI AOP is increasingly informing BCI’s sustainable investment strategy, graduating from being a reporting tool to one used by the investment team:

Coulson says: “It always takes a while to change processes and introduce new things. The Dutch funds are much further along, having been involved from the very beginning. Slowly, we’ve been bringing it into more of our active management strategies. My team, who are responsible for the ESG analysis and working with the investment teams, have been building the dataset into the investment process to showcase companies that are further along in advancing the SDGs.”

She adds: "“It’s another data point and a new lens to look at an investment through. Obviously, it’s not the only lens but it brings another perspective into the conversation.”

BCI is slowly taking it a step further from engagement to actively incorporating the data into its active management strategies to identify companies that are further along in advancing SDGs.

Before I forget, on active management, BCI has launched the Global Emerging Markets Equities Fund:

We created a team of industry-leading experts from around the world to manage the new Global Emerging Markets Equities Fund, mandated with capturing growth opportunities in emerging markets.

This internal, actively managed program provides cost and operational efficiencies, while also allowing us to strategically diversify client exposure into new regions, contributing to our world class culture.


You can learn more about this active strategy here:

Our diverse portfolio of $64.3 billion in investments is structured to capitalize on opportunities in Canada, the United States, and internationally in both developed and emerging markets. It combines index and active management strategies, using both internal and external managers. We actively integrate environmental, social, and governance factors throughout our investment process.


With almost 20% allocated to Emerging Markets in its Public Equities Program, BCI is definitely keen on emerging markets and taking the right approach. This new Global Emerging Markets Equities Fund will add long-term value to clients by capturing growth opportunities in emerging markets.  

Let me wrap it up by stating Jennifer Coulson and her team have done outstanding work enhancing BCI's sustainable investing approach and along with its Dutch and Australian partners, BCI is doing ts part to make SDGs more investable.

Below, BIV's Women in Leadership series, sponsored by PwC featured a discussion earlier this year with Jennifer Coulson, senior managing director of ESG at BCI. She and Shelley Gilberg, PwC Canada's leader of ESG markets and consulting, discuss environmental, social and governance-based investing with BIV executive editor Hayley Woodin. The conversation explores how ESG has evolved over the past decade, the impact of COVID and opportunities for responsible investment.

Also, the long-term orientation and the size of the assets invested by PGGM create an opportunity to use the driving power of money in the interests of a more liveable and sustainable world. PGGM implements this by investing, in various asset classes, in scalable solutions for (future) social and environmental issues which matter to its clients and their participants or which may have a material impact on the investment portfolio. These issues include climate change and environmental pollution, water shortages, food security and healthcare.

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