Based on SDG 7 “Ensure access to affordable, reliable, sustainable and modern energy for all” the investable sub-goals are:
7.1 Increase substantially the share of renewable energy in the global energy mix
Renewable energy
- Generators of electricity and/or heat generated from wind, solar, biomass, geothermal, hydro, waste and/or tidal sources;
- Transmission & Distribution focused utilities which are providing access to electricity markets which are already >80% renewables or are increasing renewables-based generation (by >1% pa over 3 year average.
X Not generators with a (combined) share of coal-fired and nuclear power should exceeding 30% of the generation mix
!Large scale hydro power projects (>25MW) could have significant adverse impacts on biodiversity and local communities.
!For biomass extra scrutiny should be applied around the source of the biomass material. Biomass should be sustainability certified and not directly compete with food production.
Alternative fuels
- Producers of alternative fuels including hydrogen, nuclear fushion and advanced biofuels
!Concerns around biofuels should be properly addressed: biofuels should be cleaner than the fossil fuels they replace, should not compete with food production (e.g. biofuels produced from waste materials) and should not be grown in/near protected or contested areas
Supporting products and services
Investible entities that:
- Provide products and services for renewable energy generation (e.g. technology, enzymes)
- Provide products or services for storage of renewable energy (e.g. fuel cells, hydrogen)
- Provide critical minerals that are essential for delivering a low carbon energy transition, (e.g Lithium, Nickel, Cobalt, Rare earths, Graphite, Manganese, Silicon, Aluminium)
X Not batteries for consumer electronics
! Additional scrutiny should be applied around companies mining critical minerals.
7.3 Double the global rate of improvement in energy efficiency
Built environment
- Providers of products and services dedicated to improved energy efficiency in buildings (e.g. insulation, smart thermostats, energy use monitoring devices, GRESB 4-5 stars real estate)
Efficient lighting
- Providers of products and services for substantial increases in lighting efficiency (e.g. LED)
Industrial production
- Providers of products and services for substantial increases in industrial energy efficiency (production tools, catalysts, resource management systems, design software etc.)
Energy efficient transport
Investible entities that:
- Provide of products and services for substantial increases in fuel efficiency
Manufacture pure battery electric vehicles, or alternative fuel vehicles (e.g. hydrogen)
The SDGs and SDG sub-goals have been translated from an investor perspective into the SDI taxonomy of product categories that are considered solutions contributing to the SDGs. The full SDI Taxonomy can be found here. When evaluating a company, the starting point is the classification of its products and services within the SDI product categories. The size of the positive contribution is calculated from the associated revenues (sales).