SDG, ESG, and Impact-Aligned Investing: What’s the Difference and Why It Matters

What is values-based investing?

Values-based investing is about aligning your money with your morals. For years, investors focused purely on returns, often without knowing what their capital was supporting. But more and more people today want their investments to do more than just grow—they want them to reflect their principles and drive positive change in the world.

Values-based investing asks: What if your money could work for you and the world? What if the returns you earned also came from building climate resilience, promoting gender equality, or creating decent jobs?

What are the SDGs?

The Sustainable Development Goals (SDGs) are 17 global goals adopted by all United Nations member states in 2015. They cover everything from ending poverty and hunger to promoting clean energy, reducing inequality, and taking climate action. SDGs serve as a universal framework for building a better, fairer world by 2030.

India is a signatory to the SDGs and has incorporated them into its national development agenda. From central ministries to local governments, India’s public and private sectors are working to drive progress across all 17 goals. This creates not only a moral imperative, but also a growing market for investments that contribute to SDG outcomes.

What is SDG-aligned investing?

SDG-aligned investing means putting your money into financial products and institutions that actively support one or more of the Sustainable Development Goals. This doesn’t necessarily mean sacrificing returns. Instead, it means selecting opportunities that aim for both financial and measurable positive impact.

At Equirize, we work with credible issuers, such as NBFCs, companies, and banks, that explain how their capital needs align with specific SDGs. All opportunities may not be certified as ‘green bonds’ or ‘social bonds’, as these often require additional costs on the issuer and, in many cases, more stringent criteria. But our focus is on enabling investors to access transparent, SDG-relevant opportunities with clear real-world outcomes.

What does this look like in practice?

Let’s say you want to put ₹5 lakhs to work. With Equirize, you could choose to lend that capital to a women-focused NBFC that supports women-run businesses. You can also delve deeper with the data we provide to establish if the said NBFC actually goes above and beyond to support women-run businesses.

Or maybe you care about climate action (SDG 13). We might present a bond issued by a listed company that installs energy-efficient cooling systems for industrial users, cutting both electricity bills and emissions. Again, we’ll show how the use of funds ties back to the SDG and what impact it aims to create.

How do we make SDG alignment transparent?

We ask our issuers to describe how their capital use ties into the SDGs. We map each offering to its primary and secondary SDG(s), and provide contextual information that helps you evaluate whether the alignment is meaningful. For example:

• Does an NBFC targeting SDG 5 (Gender Equality) have a proven track record of lending to women?

• Does a company claiming SDG 13 (Climate Action) show data on carbon emissions reduced?

Where available, we also include third-party evaluations, internal ESG benchmarks, or follow-up reporting.

How is SDG-aligned investing different from ESG and impact investing?

While these approaches share a common goal—channeling capital toward positive change—they differ in scope and methodology.

• ESG investing focuses on evaluating companies based on Environmental, Social, and Governance risks and performance. It’s primarily a risk management lens used to identify companies that are better managed and more resilient in the long run. ESG investing may not always lead to direct positive impact, but it often avoids harm.

• Impact investing goes a step further. It involves investing in projects or enterprises that intend to create specific, measurable social or environmental outcomes, often with a stronger focus on underserved populations or problem areas. Impact investments are usually evaluated for both intentionality and impact metrics.

• SDG-aligned investing sits in between. It uses the global SDG framework to connect investment activity to real-world goals, such as gender equality or clean energy. It offers more thematic clarity than ESG and broader applicability than traditional impact investing. SDG alignment allows both institutional and retail investors to see how their capital contributes to globally agreed development outcomes, without the need for deep operational involvement or high-impact measurement complexity.

What’s in it for the investor?

SDG-aligned investing through Equirize offers:

• A way to generate returns while advancing causes you believe in

• Access to high-quality, debt investment opportunities from regulated issuers

• More transparency and control over the social and environmental impact of your capital

In a world where finance is a powerful lever for change, SDG-aligned investing lets you be part of the solution, without stepping away from solid financial goals.

At Equirize, we believe investing should not just be a transaction, but a statement of values. Let your capital reflect your purpose.

Equirize SDG Alignment Display Framework

To help investors understand how different investment opportunities align with the United Nations Sustainable Development Goals (SDGs), Equirize provides a structured disclosure-based SDG mapping across all listed debt products.

SDG Mapping Structure

Each product listed on the Equirize platform is assessed and presented based on the following framework:

1. Primary SDG Alignment

• Based on voluntary disclosures and available public records, the issuer identifies which SDG(s) the use of funds most directly contributes to.

• Example: An NBFC funding women-owned microenterprises may be mapped to SDG 5 (Gender Equality).

2. Secondary SDG Linkages

• Additional relevant SDGs that the issuer’s operations or end use of funds may indirectly support.

• Example: An infrastructure bond funding rural sanitation may list SDG 6 (Clean Water and Sanitation) and SDG 3 (Good Health and Well-being).

3. Evidence Type

• We categorize the SDG alignment evidence under:

• Issuer Disclosures (e.g., annual reports, investor presentations)

• Public Records (e.g., regulatory filings, verified news coverage)

• Third-Party Assessments (where available, such as impact reports or ratings)

4. Track Record & Impact Data

• Where disclosed by the issuer, we include:

• Historical performance in SDG-related activities (e.g., % of loans to women, emissions reduced)

• Future targets or KPIs

• Any relevant independent evaluations

5. Materiality Assessment

• We indicate whether SDG alignment is central to the product’s capital use (i.e., Core) or a secondary benefit (i.e., Incidental).

Example Product Display (For Investor View)

Product Name: ABC NBFC NCD
Issuer: ABC Finance Ltd
Primary SDG: SDG 5 – Gender Equality
Secondary SDGs: SDG 8 – Decent Work and Economic Growth
Evidence Type: Issuer disclosures, public records
Track Record: 62% of disbursed loans to women-run businesses in FY24
Materiality: Core

Legal Disclaimer

The SDG alignment presented for each investment opportunity is based on publicly available information and voluntary disclosures made by the issuer. Equirize does not independently verify the accuracy or completeness of such disclosures. The SDG tags, evidence, and related information are provided solely for informational and transparency purposes and are not intended to constitute advice, certification, or endorsement of any kind.

Investors are advised to conduct their own due diligence and consult their financial advisors before making any investment decisions. Equirize expressly disclaims any liability that may arise from reliance on SDG alignment information presented herein.