For many impact investors, the United Nations’ 17 Sustainable Development Goals serve as a useful guideposts for choosing investments. Yet SDG 16—peace, justice, and strong institutions—tends to receive less attention from investors than goals like gender equality (SDG 5) or affordable and clean energy (SDG 7). However, in light of continued police violence against Black Americans, the rise of authoritarian regimes around the world, and the disproportionate impact of COVID-19 on people of color, it has become an area of particular relevance.

What Is SDG 16?

SDG 16 focuses on the role that governments and institutions play in creating and strengthening peaceful societies through equitable and universal access to impartial justice and vital services. Ensuring equal access to necessities such as housing, education, and healthcare requires strong, fair governments and private institutions. The goal also calls for instituting systems that eliminate corruption and bribery, as well as violence against marginalized people.

SDG 16 provides an essential underpinning for the other SDGs. Only in a society in which people do not fear for their safety and can resolve conflicts through fair, consistent, and just processes can investors, political leaders, and others harness the financial resources and human capital needed to fuel economic growth and sustainable development.

According to the UN, the goal encompasses multiple elements, from reducing violence and related death rates everywhere to promoting the rule of law at national and international levels.

Investing in Peace, Justice, and Strong Institutions

Given the wide-ranging and relatively abstract nature of SDG 16, how can investors take concrete steps to promote strong, transparent, effective institutions?

ImpactAlpha has tracked a growing number of funds that focus on startups operating in the areas of peace and justice and the institutions needed to support them. For example, in 2017 the Latin American Alliance for Civic Technology, with support from Omidyar Network and Fundación Avina, announced plans for a $3.5 million fund to invest in 20 Latin American startups targeting citizen engagement. To combat so-called fake news that can undermine equitable civic participation, the Knight Foundation, the Democracy Fund, and the Rita Allen Foundation are supporting enterprises that provide fact-checking mechanisms.

Launched in January 2018 by PeaceNexus and the Swiss asset management firm de Pury Pictet Turrettini, the Peace Investment Fund invests in global listed equities and aligns specifically with SDG 16. It invests in companies that have a net positive impact on peace-building in “fragile and conflict-affected” areas, relying on criteria such as adopting conflict-sensitive hiring practices, multistakeholder engagement, and security monitoring.

Through shareholder advocacy, investors can also pressure companies to support a safer and more just world. They can do so by engaging with and, if necessary, divesting from corporations they deem harmful to peace-building efforts, including firearms and ammunition manufacturers and retailers or private prisons. For example, last year at least six major banks made public commitments to stop providing new financing to the private prison industry after the expiration of existing agreements.

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