The report responds to the EC's Renewed Sustainable Finance Strategy Consultation and features specific recommendations for the EU.
Alliance members argue that the entire economy and the whole financial system must “undergo a sweeping transition to a more sustainable future”.
The report calls for "collective behavioral and policy alignment” and addressing “inconsistent approaches to metrics”.
The Global Investors for Sustainable Development Alliance (GISD) is calling for specific actions to fund the SDGs by aligning and renewing both public and private sector collaborative efforts. The Alliance’s report proposes 64 recommendations to harmonize and scale SDG financing and investment, with particular attention to the European Union (EU).
Released in early August 2020, the report titled, ‘Renewed, Recharged and Reinforced: Urgent actions to harmonize and scale sustainable finance,’ urges public and private leadership to achieve the SDGs. It calls for mobilizing private sustainable investment through fair and transparent risk-sharing agreements and making faster and scaled use of blended finance. The report argues that green investments alone will be insufficient to deliver the SDGs or the Paris Agreement on climate change; the entire economy and the whole financial system must “undergo a sweeping transition to a more sustainable future.” Proposals to deliver this transition include a financial incentive system that uses fiscal measures to rewards companies for creating sustainable stakeholder value and striving for sustainability outcomes.
Fiscal incentives could be used to reward companies for sustainability outcomes.
To move towards sustainability, the report underscores the “imperative of collective behavioral and policy alignment,” stressing that everyone must “row in the same direction in a coordinated way,” from aligning climate scenarios and risk methodologies for banks, to aligning policy lending and private investor flows. The report calls for addressing “inconsistent approaches to metrics” and poor quality, inconsistently disclosed sustainability data. The report recommends fixing these flawed metrics, aligning standards, and providing consistent information, and mandating confirmed disclosures to ensure SDG-related disclosures are built into existing governance structures. The report further calls for embracing partnerships, collaboration, and innovation to fund the Goals, including by investing in technologies and processes for metrics that support SDGs and sustainability.
Among their detailed recommendations, the members of the Alliance call for:
- endorsing the Basel Committee’s high-level Task Force on Climate-related Financial Risks (TCFR) to develop a framework for environmental, social, and corporate governance (ESG) risk supervision applicable to global financial institutions;
- making sustainability reporting mandatory for financial and non-financial institutions, including through globally harmonized disclosure requirements that go beyond climate metrics to include material SDG-related information and forward-looking data;
- increasing the quality, ambition, and standardization of Voluntary National Reviews (VNRs) for the 2030 Agenda and Nationally Determined Contributions (NDCs) for the Paris Agreement, including by establishing an international platform for the development of investable national capital-raising plans and transaction-oriented investor engagement;
- ensuring that public subsidies align with the SDGs and the Paris Agreement; and
- diversifying and increasing bond issuance across the SDGs and drive green bond principles and standards into the project finance market.
The report responds to the European Commission’s (EC) Renewed Sustainable Finance Strategy Consultation and features specific recommendations for the EU. Those recommendations include: requiring standardized ESG disclosures from companies participating in the EU Green Deal Investment Plan; elevating the Shareholder Rights Directive to the status of an EU Regulation; and elevating the EU Non-Financial Reporting Directive to the status of an EU Regulation.
The UN Department of Economic and Social Affairs (DESA) developed the GISD Alliance in collaboration with the Swedish International Development Cooperation Agency (SIDA), based on the design of the Swedish Investors for Sustainable Development. The Alliance is part of the UN Secretary-General’s strategy for financing sustainable development, and aims to to provide leadership for mobilizing resource for sustainable development and to accelerate and scale up finance and investment for the SDGs.
A group of 30 private sector CEOs make up the Alliance, which was launched in October 2019. [Publication: Renewed, Recharged and Reinforced: Urgent actions to harmonize and scale sustainable finance] [DESA press release] [SDG Knowledge Hub story on GISD Launch]