KPMG solution to measure sustainable investment outcomes

KPMG has collaborated with the University of Cambridge Institute for Sustainability Leadership (CISL) to develop a Sustainable Investment Framework Navigator (SIFN) tool that provides asset managers with more transparency on the environmental and social impacts of their investments.

In a press release, KPMG said the tool reflects the firm’s environmental, social and corporate governance (ESG) commitments both locally in Cayman and on a global level.

The SIFN is based on the Sustainable Investment Framework, developed by CISL in conjunction with the Investment Leaders Group (ILG). It measures the real-world impact of an investment fund’s portfolio against a set of six impact themes which asset managers can use as proxies for the performance of their investments and their alignment with the United Nations Sustainable Development Goals.

The six themes are climate stability, resource security, healthy ecosystems, basic needs, wellbeing and decent work.

“The SIFN provides the ability to take complex information to gain meaningful insights with a simple dashboard to check their alignment with the SDGs,” said Anthony Cowell, head of asset management, and partner at KPMG in the Cayman Islands. “It is part of our KPMG vision to help our clients build a better world that focuses on sustainability, resilience and impact.”

Jake Reynolds, executive director, sustainable economy at CISL said measuring the impact on one company on one specific theme is reasonably simple provided the requisite data are disclosed. “However, poor data coverage, lack of familiarity with the underlying issues and an absence of standardization render neat numbers and comparisons difficult,” he said.

“CISL’s framework offers a solution to this problem in the form of six simple quantitative tests based on readily available data. Our collaboration with KPMG will help us to continue to advance the framework as new data sources become available, including in the vital area of social impact.”

Jodie McTaggart, senior manager at KPMG in Cayman, said working alongside the experts from CISL towards a unified way of measuring impact is a big step towards the future of sustainable and environmentally conscious investment.

The OECD Business and Finance Outlook 2020, which was published in September, noted that market participants are still missing comparable and verifiable ESG data to conduct due diligence and align investments with sustainable outcomes.

KPMG said the goal of its tool is to assess all portfolios on a common basis to bring clarity for investment clients and beneficiaries. This would help encourage the movement of capital towards more environmentally and socially sustainable investments and support asset managers to disclose relevant data in a consistent way.

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