18 July 2016: The Government of Kenya, the Government of Switzerland and the UN Global Compact (UNGC) held a side event to discuss ‘Sustainable Finance to achieve the SDGs: accelerating implementation of the 2030 Agenda through private-sector action,’ on the margins of the 2016 session of the High-level Political Forum on Sustainable Development (HLPF).
Manuel Sager, Swiss Agency for Development and Cooperation (SDC) Director General, said the definition of “return” is a critical question in development finance, and that it is “encouraging” that more companies have decided to include impact investment in their definition of return. Moderator Dante Disparate, Risk Cooperative Founder and CEO, said the case for governments to get the private sector involved is the need to move from billions to trillions of dollars to achieve the 2030 Agenda for Sustainable Development. The case for the private sector, meanwhile, includes the opportunity to invest at the “base of the pyramid.”
Macharia Kamau, Permanent Representative of Kenya, said achieving the ambitions of the 2030 Agenda will entail recalibrating the global economy and redoing industry and global infrastructure, and that the current level of official development assistance (ODA), US$260 billion, is not sufficient. He called for a “mindset shift” that drives investment decisions to direct the needed US$300 trillion into supporting people and the planet. Kamau highlighted the potential for technology to help achieve the Sustainable Development Goals (SDGs) in time, saying the private sector is driving such investments. He added that financing the SDGs “goes beyond investment and risk, to our peace and security.”
Lise Kingo, UNGC Executive Director, identified “positive signs” that businesses are ready to integrate the 2030 Agenda into its operations and thinking. She highlighted that: financial sector members of the Principles for Responsible Investment (PRI) manage over US$60 trillion; the Sustainable Stock Exchanges (SSE) initiative includes the majority of the world’s stock exchanges; and a UNGC-Accenture study found that CEOs are aware of the SDGs, have a positive attitude towards them, and are beginning to take action. Kingo called to “continue documenting that there is a business case,” to explain how the SDGs can add value to companies, and highlighted the UNGC campaign on ‘Making Global Goals Local Business’ in which local networks are engaging companies in putting the SDGs into practice.
Sabine Döbeli, CEO, Swiss Sustainable Finance, highlighted a report titled ‘Swiss Investments for a Better World,’ which outlines ways to make investment in development attractive for both private and public investors. She called on the private sector to: support local governments to enable regulatory frameworks; and support investment by de-risking and co-investing.
Priya Mehra, Morgan Stanley, said Morgan Stanley’s Institute for Sustainable Investing seeks to ensure that clients’ investments have a positive impact while finding competitive returns. She reported that sustainable investing is the fastest-growing sector of the investment industry: it has grown to US$21 trillion in the last few years, with 70% growth from 2012-2014, and one in six dollars is being sustainably invested in the US. She echoed the need to bring investors “more evidence” that they can benefit from sustainable investment.
Finally, Simon Zadek, UN Environment Programme (UNEP) Inquiry into the Design of a Sustainable Financial System, stressed the role of policy frameworks in shaping investment and financial markets, saying policy has as much of an impact in those areas as in any other. Instead of believing that “there is a business case out there in the wild and we have to find it,” he called for shaping markets to “make it make more sense” to invest in sustainability. He noted as levers for action: enhancing market practice; and harnessing the public balance sheet. Zadek also called for getting the legal infrastructure right to ensure that companies don’t do ‘the wrong thing for the wrong reason.” Finally, Zadek: highlighted that on 5 July 2016, the EU announced its intention to develop its first-ever sustainable finance strategy; announced the UNEP Inquiry report on ‘Green Finance for Developing Countries’ published in July 2016, and said key Central Banks have agreed on the need to redeploy US$300 trillion as green finance. [IISD RS Sources] [Swiss Investments for a Better World] [UNEP Inquiry Website] [Green Finance for Developing Countries] [IISD RS Coverage of HLPF 2016] [Making Global Goals Local Business]