Cornerstone UN SDG Series: , and Infrastructure

Investing to Align with SDG 9: Industry, Innovation and Infrastructure

Investment in infrastructure and innovation are crucial drivers of economic growth and development, and are key to finding lasting solutions to both economic and environmental challenges. Promoting sustainable industries and investing in scientific research and innovation are all important ways to facilitate . More than 4 billion people still do not have access to the , and 90% are from the developing world. Bridging this digital divide is crucial to ensuring equal access to information and knowledge, as well as fostering innovation and entrepreneurship.1

SDG 9 is further refined by targets that can be more easily translated into actions. These targets highlight the interconnected nature of the goals. For example, strategies to support inclusive industrialization and innovation also promote progress toward SDG 5 (Gender Equality) and SDG 8 (Decent & Economic Growth). Below are a series of synergies What are the UN SDGs? that can come from providing access to products, services and systems that work to drive The UN Sustainable Development Goals Industry, Innovation and Infrastructure. (SDGs) are a collection of 17 global goals set by the UN General Assembly in 2015. Fair Treatment and Equal Opportunity The SDGs are a shared blueprint for peace and prosperity for people and the planet, Recent research points to a strong connection between openness to different cultures now and into the future. The SDGs are and ideas, and the ability of a place to adapt to economic changes and grow.2,3 Currently, part of Resolution 70/1 of the UNGA titled however, not all are equally able to innovate. Women have more difficulty acquiring external “Transforming our World: the 2030 Agenda for Sustainable Development,” now referred business financing than men, and only received 2% of all venture capital in the US in 2017.4,5 to as the “2030 Agenda”. Disparities in financing opportunities also extend into microfinance, where evidence has 6 emerged of discrimination against disabled micro-entrepreneurs. Fostering inclusive growth What are the UN SDGs designed to do? depends on removing these biases and connecting all with opportunities to contribute to innovation. The SDGs are designed to address the global challenges we face, including those related to poverty, inequality, climate, environmental degradation, prosperity, , and peace and justice. They represent a call to action for governments, civil society, Sophisticated financial services will provide smooth cash flows and enable individuals and international , and the private businesses to accumulate assets while making productive investments. Small businesses re- sector to align their activities with the social, quire financing to grow, and currently there is a lack of financial institutions that can support environmental and economic changes needed 7 small to medium-sized enterprises through traditional loans or a line of . As additional to ensure the continued viability of our planet financing for SMEs is more available, national productivity and social welfare can be improved and the dignity of societies and individuals. as there is additional access to employment and resources. can be used not only to facilitate payment transfers but also to access banking services remotely, making financial services available imore broadly.8

Telecommunication Systems

In the last decade the number of people that are connected to the internet has tripled. This Investing to achieve still leaves 60% of people lacking internet access globally. Mobile and wireless coverage are more available than household internet access, and the cost of data prohibits access industry, innovation, for many.9 Communication play a role in almost all industries including and infrastructure health, education, , finance, transportation, energy, and commerce. With the advancements in infrastructure and innovation in technologies, telecommunication services will be available at a lower cost and higher speeds.10 Affordable, Sustainable and Modern Energy

Access to affordable, sustainable modern energy encompasses the ability to improve living conditions through lighting, education, and fresh water. Available forms of energy in many places are not only time-consuming to gather and inefficient, but also unhealthy and About the unsafe. A lack of developed infrastructure globally shows that approximately 20% of people Cornerstone SDG live without electricity, and 50% of all households and 90% of rural households use solid fuels for cooking and heating. These include unprocessed biomass, , or charcoal.11 The Series danger from indoor use of these materials lies in the chemicals produced when burning in confined areas; solid fuels in households accounted for 2.2 million deaths in 2005.12 Access to electricity and biomass cookstoves can boost economic development and reduce poverty and hunger, improving conditions for the poorest segments of society. Improvements lead to greater outputs in agriculture, commerce, and industry with greater more efficient By providing a brief overview of each of 13 production. the UN SDGs, Cornerstone Capital Group seeks to help investors understand how Clean Water including Sanitation and Hygiene incorporating SDG alignment into their investment decisions can contribute to Worldwide, three out of four jobs are water dependent. Investment in water infrastructure progress. Because the SDGs were not not only promotes health initiatives and job creation in developing areas but also stimulates created specifically with investors in mind, advancement toward green economies.14 In agrarian where agriculture supports Cornerstone effectively “translates” them into investment opportunities by focusing not only the economy but also acts as the main food source, access is critical to sustainable on the concept of access: the ability of growth. Infrastructure that supports maintenance, reduction, reduction, , and reuse individuals and societies to achieve desired 15 of water must be put in place, updated and supported. Sound water involves social, economic and environmental supply, infrastructure, and wastewater treatment. outcomes. We believe that investing in products, services and systems that increase access is key to driving progress toward the Clean Air SDGs.

With the modernization of societies globally, infrastructure and industry need to be de- At Cornerstone, we believe that invest- signed in a way that reduces contributions to climate change. Since the industrial revolution, ments can achieve competitive financial there has been an unsustainable rapid increase in carbon dioxide emissions causing global performance and positive societal impact – warming.16 Industries need to focus on reducing waste and becoming more sustainable with performance that sacrifices nothing, except environmentally practical process and technologies.17 Investment into energy efficiency and indifference. an increase in investment in low-carbon initiatives through innovation across industries will support clean air practices.18 In addition to providing clear health benefits, clean air has also cornerstonecapinc.com been linked to broader economic benefits as it results in more productive workforces and healthier who save on avoided medical expenses.19 Safe, Affordable and Sustainable Transportation

Transportation and infrastructure development support economic growth through industries. Additional infrastructure makes the transportation of easier, faster and less expensive. Advanced transportation infrastructure supports complex supply chains globally, nationally and regionally with the movement of goods and people. Establishing trade routes and partners across these categories links economic functions in the of goods from producer to consumer. Progress in developing advanced infrastructure supports economic growth as more jobs are accessible to those who would otherwise not have access.20

(1) https://www.undp.org/content/undp/en/home/sustainable-development-goals/goal-9-industry-innovation-and-infrastructure.html (2) https://www.citylab.com/life/2011/12/diversity-leads-to-economic-growth/687/ (3) https:// images.forbes.com/forbesinsights/StudyPDFs/Innovation_Through_Diversity.pdf (4) http://fortune.com/2018/01/31/female-founders-venture-capital-2017/ (5) International Finance Corporate (2013f) ‘International Finance Corporation Enterprise Finance Gap Database’. (6) Discrimination by Microcredit Officers: Theory and Evidence on Disability in Uganda https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1722122 (7) https://wedocs.unep.org/bitstream/ handle/20.500.11822/21431/WorldBank_SDGAtlas_09_industry_innovation_infrastructure.pdf?sequence=1&isAllowed=y. (8) https://stats.unctad.org/Dgff2016/prosperity/goal9/target_9_3.html (9) https://www.2030vision.com/global- goals/industry-innovation-and-infrastructure (10) https://www.itu.int/en/ITU-D/Conferences/WTDC/WTDC17/Documents/declaration/ba_declaration_e.pdf (11) https://www.who.int/quantifying_ehimpacts/publications/9241591358/en/ (12) http://www.iiasa.ac.at/web/home/research/researchPrograms/Energy/IIASA-GEF-UNIDO_Access-to-Modern-Energy_2013-05-27.pdf (13) https://sustainabledevelopment.un.org/content/documents/17462PB1.pdf. (14) http://www.unesco.org/new/en/natural-sciences/environment/water/wwap/wwdr/2016-water-and-jobs/ (15) www.unwater.org/app/uploads/2016/08/Water-and-Sanitation-Interlinkages.pdf. (16) https://ourworldindata.org/co2-and- other-greenhouse-gas-emissions. (17) https://www.iberdrola.com/top-stories/iberdrola-shares-with-you/industry-innovation-and-infrastructure. (18) https://www.iberdrola.com/top-stories/iberdrola-shares-with-you/climate-action. (19) https://www.epa.gov/clean-air-act-overview/benefits-and-costs-clean-air-act-1990-2020-second-prospective-study. (20) https://sustainabledevelopment.un.org/content/documents/8656Analysis%20of%20transport%20relevance%20 of%20SDGs.pdf. Cornerstone Capital Group is a registered investment advisor. The information in this document is intended to be general in nature and is not intended as investment advice. The views expressed are as of July 2019 and are subject to change at any time based on market or other conditions. Past performance is not a guarantee of future results. © Cornerstone Capital Inc. 2019.