Why are sustainable development investments important for your organization? 
Sustainability is a strategic priority for Bridgewater. As a global macro, multi-asset manager, our goals are to build a deep understanding of how economies and markets work and then convert that understanding into high-quality solutions for our clients’ most important investment objectives. Understanding sustainability is essential to understanding global economies and markets and an increasing number of institutional investors are focused on the impact that their portfolios have on environmental and social outcomes. 

Using Bridgewater’s fundamental, systematic and diversified approach, we have built a systematic assessment process for evaluating whether securities across asset classes are aligned with the UN Sustainable Development Goals (SDGs). We apply this assessment to build “3D” portfolios – portfolios engineered to meet return, risk and impact goals. We have selected the alignment with the SDGs as the foundational framework for this approach because they are oriented toward positive environmental and social impact, are widely accepted by governments and asset owners, and contain specific and measurable indicators that help investors and researchers to assess whether a given entity is helping to achieve any of the 17 SDGs.

What prompted you to acquire and employ the SDI AOP data for a specific use? 
Sustainable investing requires the same capabilities as any other investment research problem—i.e. good conceptual understanding of the dynamics at hand, high-quality and well-systemized data and application of rigorous logic—and the field (best practices, data, regulatory standards) is evolving rapidly. Ultimately, our ability to strengthen our systematic sustainability assessments depends on the availability and quality of the underlying data. We are continuously seeking out new sources to triangulate our reads. We use the SDI AOP data set to measure the alignment of company products and services to the SDGs. We value the transparent and quality-controlled framework for identifying SDIs and the comprehensive and diversifying machine-learning approach to data collection that SDI AOP offers.

How do you integrate the SDI AOP data in your systems?
We integrate the SDI AOP into our overall equity sustainability systems that measure the sustainability of company products and services. Across these systems, we assess over 8,000 of the largest companies globally, looking at SDG alignment broadly, specific SDG-by-SDG alignment, as well as analysis into specific sustainability themes (e.g. net zero alignment) or indicators (e.g. carbon footprint). To integrate data into these systems, we disaggregate external data and reconfigure it to map it against our framework for assessing SDG alignment. Using the SDI AOP data, we expanded the depth and breadth of our sustainability data ecosystem. This enables, for example, higher confidence assessments on emerging market companies where we previously had data challenges. 

Interested in more SDI AOP use cases? Click here.