Topics in this section: - Orsted, Legrand shine on Sustainable Development Goals - Using BI's SDG exposure model - Product-segment exposure reflects SDG impact - Operational ESG performance in-line with SDGs
Orsted, Legrand shine on Sustainable Development Goals
Orsted, Schneider and Legrand show alignment with the United Nations' Sustainable Development Goals (SDG), based on BI's model and research. The companies are positioning themselves to meet investor megatrends such as energy efficiency and gender diversity. Our model analyzes exposure through segment revenue and ESG metrics.
Using BI's SDG exposure model
Bloomberg Intelligence's SDG model helps investors understand a company's potential exposure to the goals based on two aspects. The first identifies revenue segments that may be exposed to SDGs, helping users understand the effect a company can have. The second facet benchmarks corporate performance against the goals, looking at metrics such as gender diversity, carbon emissions and energy use, which may have a positive or negative effect. Users should undertake further due diligence to identify products and services to assess specific SDG alignment.
Methodology: As an example, a company's exposure to affordable and clean energy (Goal 7) can be understood by looking for revenue streams from renewable energy or its supply chain, and overlaying metrics such as the energy intensity of its operations.
Product-segment exposure reflects SDG iImpact
Companies providing products or services that align with the Sustainable Development Goals could see sales grow as demand shifts toward sustainable production. Companies are starting to integrate the goals into reporting, with Chr. Hansen noting that 82% of its revenue contribute to the SDGs. Legrand aims to derive 80% of revenue from sustainable products by 2030, while Orsted generates about 36% of its revenue from renewable energy. Endesa launched an e-solutions business in 2017 and expects margin to double from 2018-21. Schneider plans to invest 10 billion euros for sustainable development in 2015-25.
In the SDG model, some sectors such as renewable energy and SDG 7 are more clearly aligned, while others are less clear-cut and need more research.
Operational ESG performance in-line with SDGs
Some companies aim to contribute to the SDGs through resource efficiency, workplace safety, diversity and metrics that are significant to their operations. The Bloomberg Intelligence model maps these metrics to each goal, helping investors understand a company's policies and performance, which may positively or negatively affect the goal. For example, Unilever sources 56% of its raw materials from sustainable sources, which aligns with SDG 2 and 12 (sustainable agriculture and responsible consumption and production).
Among the S&P 1200, Kering, Visa and Bank of America are some companies that perform well on gender diversity, in agreement with SDG 5.
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