Arborview Maps to the SDGs

Emma Park

August 14, 2020

INTRODUCTION

In 2015, members of the United Nations adopted the Sustainable Development Goals (SDGs) — a set of 17 ambitious goals to address the world’s most pressing social and environmental challenges by 2030. Each goal was supported by targets that describe the goal in more detail and each target is measured by indicators.

Since their adoption, the SDGs have become a north star for many, including impact investors (1). In January 2020, the Global Impact Investing Network reported that as of 2019, 80% of surveyed impact investors leveraged the SDGs up from 43% in 2017 (2).

OUR APPROACH

In 2020, the Arborview team mapped our portfolio companies to the SDG targets building on the methodology developed by Mercy Corps Ventures (3). Our first review focused on evaluating the impact of our companies’ products and services. In the future, we plan to review the impact of our companies’ internal operations as well.

We reviewed the list of 169 targets that underpin the 17 SDGs
We curated which of the 169 targets were relevant to Arborview’s investment thesis; we found that:
- 26 targets aligned or might align to our thesis
- 143 targets did not align to our thesis
We selected relevant targets for each portfolio company
For each company, we categorized the targets as “primary impact” or “secondary impact” using the Impact Management Project's (IMP) ABC Impact Classes:
- Primary: the portfolio company contributes to solutions (IMP Impact Class “C”)
- Secondary: the portfolio company benefits stakeholders (IMP Impact Class “B”)

We made this distinction to both emphasize the ways in which we are meaningfully contributing to the goals and to not overstate our contribution.

THE RESULTS

Arborview’s portfolio companies mapped to 7 of the 17 SDGs. There were several themes we saw across the portfolio, which was somewhat expected given our focus on sustainability.

All of our portfolio companies supported SDG 12: Responsible Consumption and Production, and nearly all supported SDG 9: Industry, Innovation, and Infrastructure. Overall, most companies supported 3-4 SDGs.

Notably, Arborview did not map to SDG 13: Climate Action, at the target level. Although many of Arborview’s portfolio companies mitigate climate change by reducing greenhouse gas emissions, they do not map to SDG 13’s targets. These targets index heavily on planning, policy, education, and resilience with a focus on developing countries. While our portfolio companies — which are primarily based in North America — do not directly contribute to SDG 13’s targets, addressing climate change remains central to Arborview’s thesis and investments.

Our portfolio companies supported the SDGs by contributing to solutions and benefiting stakeholders. 48% of targets were classified as a “primary impact” — or contributing to solutions — and 52% of the targets were classified as “secondary impact” — or benefiting stakeholders. See more detail on how our portfolio mapped to the SDGs below.

CONCLUDING THOUGHTS

Arborview will continue to map its investments to the SDGs, reassessing each time we invest in a new company or if a current portfolio company materially changes its approach.

Our team found that mapping our portfolio was positive on many levels. It helped develop a common language to use when we talk about our impact to our investors, to current and future portfolio companies, and to the broader public. In the future, it may help us identify and partner with asset owners or managers focused on the same objectives.

We recognize that it will take urgent action and active collaboration to achieve the SDGs in the next ten years. We believe that this exercise was an important step in contributing to action and results.