SDGs take a hit!
There can be no debate that 2020 was a watershed year, and there is little to be gained from reviewing the year. Most see 2020 as an accelerant of trends (technology, rapid increase of online everything, WFH, inequality), some persisting for decades ahead. This trend acceleration was greater for wealthier nations.
Interestingly, there are areas where the pandemic has meant a reversal of recent trends, notably in many of the UN Sustainable Development Goals (SDGs). The SDG are familiar to anyone who works in impact investing but probably do not come up general discussions. For those who wish to learn, I would direct you to the https://www.un.org/sustainabledevelopment/.
Focusing on the first five UN SDGs highlights how in each case COVID-19 was not an accelerant but instead caused trend reversals that make attainment of these goals impossible in their expected time frame.
UN SDG 1 No poverty. The first goal was to eliminate poverty by 2030, and while progress was slowing to achieve that goal the trend of less people living in poverty was continuing. COVID changed this and has caused the first increase in global poverty in decades. The U.N. estimates an additional 71 million people have been pushed into poverty in 2020. Source https://unstats.un.org/sdgs/report/2020/goal-01/
UN SDG 2 Zero Hunger. Whilst the UN’s estimate of chronic undernourishment has been steady for several years, they estimated almost 690 million people were undernourished in 2019, 9% more than in 2014.**
The impact of the pandemic will be felt most severely in countries that can’t feed their populations, typically in Africa and the poorer countries in Asia. In July, the UN head of the World Food Program stated: “(there is) a real danger that more people could potentially die from the economic impact of COVID-19 than from the virus itself.”
Global food trade will be pressured by deglobalisation, increasing the need for more sustainable agriculture process locally.
UN SDG 3 Good Health and Well Being. Covid-19 threw this goal completely off track, but the longer-term consequences may be delayed in other areas of health. Reduced check-ups have resulted in interrupted non COVID-19 vaccination schedules, critical care for non-communicable diseases and disruptions to treatment for non-COVID-19 communicable diseases. These are all areas where the COVID impact has yet to been seen.
A Cancer Australia report in September 2020 shows national reductions in total monthly services for diagnostic and therapeutic procedures during the initial COVID-19 period; between March and May 2020. This reduction included procedures related to skin, breast and colorectal cancers.
I would assume this was replicated globally and delays are not your friend in this regard. Med tech and telehealth will combine with Government health spending initiatives, but these will take time. Mask wearing has become commonplace and reduces the spread of all diseases, and this is unlikely to continue into 2022.
The mental health impact is also likely to be significant and ongoing.
UN SDG 4 Quality Education. The UN estimates that school closures kept 90% of children out of school for some period in 2020 as 190 countries implemented closures. Whilst distance learning solutions are provided in four out of five of these countries, at least 500 million children and youth were excluded from these options.
I will leave it up to you to determine how their home-schooling experience went.
Home, remote or no schooling is likely to have impacted education outcomes especially in poorer countries and households. The impact of this may indeed last a decade.
UN SDG 5 Gender Equality. For effect on gender equality, I am focussing on the impact of COVID 19 and its influence on female employment. I will use Australia as an example. As at Dec. 2020, the Australian Bureau of Statistics estimated the Australian gender pay gap in ordinary wages as 14%. This is unchanged from a year ago with no progress towards equality.
The impact of COVID-19 on female workers has in part been driven by the industries with the highest female participation. In 2019–20, the industries with the highest proportion of women aged 20-74 were:
Health care and social assistance (77.9%)
Education and training (71.6%)
Retail trade (55.2%)
Accommodation and food services (54.5%)
Administrative and support services (52.9%)
Three of the four industries listed have been disproportionally impacted by COVID via significant fall in activity, whilst the industry with the highest proportion of women (health care and social assistance) has been on the front line of fighting the virus. Women account for 70% of health and social workers globally.
Australia is a COVID success story, yet the female u/e rate has risen by twice as much as males.
I will focus on the remaining goals in a later post.
Impact investors are familiar with the UN SDGs and they form part of many impact mandates. As I have highlighted, COVID-19 has had a significant negative trend reversal to these first five UN SDGs. Reversing this will require significant private sector involvement, given the rapid increase in sovereign debt levels. Governments will simply not be able to find the funds going forward. It is now up to us.
Beckon Capital focuses on impact investing in the SME and property sectors where we can assist companies to identify, measure and respond to their impact. High level, the UN SDGs form part of this process. The damage caused by the pandemic to the SDGs highlights the important role impact investing will play in reversing this negative trend. By investing in firms with positive impact goals in the SME and property sectors we can make a difference in local communities and help the UN achieve its goal.
“The Sustainable Development Goals are the blueprint to achieve a better and more sustainable future for all.”
Investment can make a difference.
Beckon Capital Pty Limited (ABN 49 628 013 678), authorised representative No. 001280538 of Fundhost Limited (ABN 69 092 517 087, AFSL No. 233045) (“Beckon”)