The UN Global Compact – the world’s largest corporate sustainability initiative “uniting business for a better world” – has published a report that calls for an infusion of private sector investments to achieve the SDGs by 2030. This, it argues, “comes with distinct opportunities for delivering growth and the potential to unlock innovation in sustainable finance.”

Titled, ‘Accelerating Innovation in Sustainable Finance: Removing Roadblocks and Unlocking Value,’ the report finds the debt crisis has limited domestic public investment in sustainable development and international financial institutions (IFIs) cannot close the financing gap alone. It notes that, according to some estimates, the gap sits at USD 30 trillion in developing countries alone.

The report points to “growing urgency to tap into the private financial sector,” including pension funds, asset managers, insurance companies, and other institutions, together controlling USD 200 trillion in financial assets globally, to invest in the SDGs. Such investment, it notes, should be conducted “in a way that creates strong local economies and financial returns while protecting the environment and building opportunities for people worldwide.”

The report outlines actionable strategies to bridge the financing gap by:

• Increasing private investment through innovative mechanisms to unlock capital and direct it towards sustainable development;
• Overcoming structural barriers, such as the lack of transparency, the mismatch between risk and returns, and the need for better integration of sustainability into financial markets, through the establishment of global sustainability reporting standards and the use of innovative blended finance tools, new outcomes-based financing mechanisms, and technologies like artificial intelligence (AI) to bridge data gaps, especially in emerging markets; and
• Leveraging the UN’s leadership role to convene global stakeholders, standardize sustainability practices, and promote transparency in financial markets, as well as to lead efforts in creating de-risking mechanisms and fostering partnerships that can drive the integration of sustainability into corporate and financial decision making.

The report was launched on 26 September, during the UN Global Compact’s 2024 SDG Investment Forum, which brought together leaders from business, finance, government, and civil society to explore innovative ways to mobilize private capital towards achieving the SDGs. The Forum featured sessions on innovative financing mechanisms, sustainability-linked investments, gender-led investing, and the role of technology in driving sustainable finance, among other topics. Participants explored the potential of public-private partnerships (PPPs) and blended finance to mitigate risks and unlock greater investment flows into sectors critical to achieving the SDGs.

According to a UN Global Compact press release, the Forum also fed into discussions at the Summit of the Future (SoF) and the Fourth International Conference on Financing for Development (FfD4) in Spain next year. [Publication: Accelerating Innovation in Sustainable Finance: Removing Roadblocks and Unlocking Value] [Publication Landing Page]