The UN Global Compact (UNGC) event focused on the potential creation of a new investment market in “SDG Bonds,” from both sovereign and corporate issuers.
Gavin Power, UNGC Deputy Director, explained that “critical mass in mainstream finance is building around new concepts and solutions, and this will help answer the so-called billions-to-trillions imperative.”
7 February 2018: Approximately 100 leaders representing public policy, pension funds, asset management, banking, the corporate sector and other investment spheres discussed mobilizing private finance and investment around the SDGs, during a two-day symposium convened by the UN Global Compact (UNGC). UNGC explained that the presence in the symposium of major asset owner institutions, such as CalPERS, was of significant importance as such organizations, as owners of capital, drive the investment chain.
The event, themed ‘Maximizing Opportunities: ESG 2.0 and the SDGs,’ took place from 6-7 February 2018, in Newport Beach, US, and was organized in partnership with PIMCO, ENEL, the UN Environment Programme (UNEP) Finance Initiative (FI) and the Principles for Responsible Investment (PRI). Panels covered topics including: environmental social and governance (ESG)/SDG materiality; fiduciary duty and impact; and financial innovation, especially in relation to the development of “SDG Bonds.”
According to experts, the long-term nature of the SDGs could make fixed-income securities the most promising SDG financing vehicle.
Discussions focused on the potential creation of a new investment market in “SDG Bonds,” from both sovereign and corporate issuers, as, according to experts, the long-term nature of the SDGs could make fixed-income securities the most promising SDG financing vehicle.
Speaking at the event, Gavin Power, UNGC Deputy Director, explained that “critical mass in mainstream finance is building around new concepts and solutions, and this will help answer the so-called billions-to-trillions imperative.”
Donatella Izzo, ENEL, highlighted that fixed-income securities will need to reflect “fundamental” changes in business models as they relate to sustainability. She noted that, in the energy sector, changes are triggered by technological innovations in power generation and by the broader climate change agenda, which has an effect on energy-efficient responses and action.
Philip Fox Gough, Minister Counsellor of the Government of Brazil, noted that governments’ national plans of action with regard to the SDGs represent the entry point for business and investors.
Priya Mathur, President of CalPERS Board of Administration, said the SDGs represent “a gift to investors.” She explained that CalPERS see the SDGs as the best way to drive sustainable investment and attain better risk-adjusted returns. By acting on the SDGs, she noted, “we can achieve a more sustainable world and this will drive investment performance.” [UNGC Press Release] [UNGC Financial Innovation for SDGs Action Platform]