21 June 2018
High-level Event Spotlights Tools to Break Bottlenecks for SDG Investment
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The UN General Assembly held a high-level event on SDG financing, and ways to increase private investment in order to meet the annual financing needs of the 2030 Agenda.

The UNGA President stressed the need for governments to “sell the SDGs, not just put our hands out and expect the investments to come”.

The outcome of the event will be Chair’s summary that will draw on the outcomes of the deliberations, aimed to provide a “succinct and action-oriented” inventory of the solutions presented, as well as suggestions for future actions.

11 June 2018: Governments, UN entities, international financial institutions (IFIs), institutional investors, business actors and other stakeholders discussed ways to break bottlenecks and obstacles to increasing private investment in the SDGs. UN General Assembly President Miroslav Lajcak said his Office will develop a toolbox of ideas and best practices to increase SDG financing, following the meeting.

During a high-level event convened by the UNGA President in New York, US, on 11 June 2018, participants focused on: identifying the biggest challenges and obstacles along the investment chain; exchanging priority actions and solutions that policy makers could consider; strengthening partnerships between Member States, the private sector, multilateral development banks, and international organizations; and the role of the UN in removing the identified obstacles and strengthening coordination among major institutional stakeholders to support financing for the implementation of the 2030 Agenda, both at country and at global level.

Opening the meeting, Lajcak said calls for action on the SDGs have been heard for three years, and “they are obviously not working.” He reported that while 92% of business executives support the SDGs, only 17% have plans or policies to achieve them; concrete actions, partnerships and policies are lacking. He stressed the need for governments to “sell the SDGs, not just put our hands out and expect the investments to come.”

UN Deputy Secretary-General Amina Mohammed said the framework for advancing financing is the Addis Ababa Action Agenda. She cited the need for an agreed definition of “sustainable investment;” called on regulators to shift towards long-term horizons; and noted the need for governments to reduce corruption and improve governance to build trust with investors. She added that the multiplication of reporting instruments has created confusion and is preventing regulators from fostering sustainable investment.

Mohammed said the current process to strengthen UN Country Teams is expected to help in preparing investment strategies and creating quality project pipelines. She informed participants that the UN Secretary-General will host a high-level meeting on financing the 2030 Agenda, in September 2018.

UN Conference on Trade and Development (UNCTAD) Secretary-General Mukhisa Kituyi flagged infrastructure as having especially great potential for increasing private sector participation, calling it a natural fit, given the right safeguards. He outlined UNCTAD’s action plan for public sector action to orient private investment toward the SDGs, which calls for policy action to:

  • establish guiding principles and targets for ensuring policy coherence;
  • establish mechanisms and instruments to mobilize financing, such as the Sustainable Stock Exchange;
  • channel financing toward SDG sectors and partnerships; and
  • build local capacity and regulations to maximize the impact of investment on the ground.

Kityui reminded participants that UNCTAD will host the tenth World Investment Forum in Geneva, Switzerland, in October 2018, which will address the topic of SDG investment.

Douglas Peterson, S&P Global, said metrics on transparency, governance and environmental impact are an important enabler for high levels of investment. He reported on S&P Global’s “true cost SDG evaluation tool” for quantitative analysis of corporate performance on SDGs across the value chain. He said an “inaugural set” of ten countries are using the tool to optimize investments and identify SDG-aligned opportunities and risks. Peterson stressed that stimulating additional private investment requires common definitions, terminology and standards for identifying environmental, social and governance (ESG) factors in each sector, as well as measuring the “capital differential” of investing in more sustainable enterprises.

Bill Gates, Bill & Melinda Gates Foundation, speaking via video message, said all actors must cooperate to share risk, sequence investment, seed new technologies that address the needs of the poorest, and bring everything to scale. Namita Vikas, Yes Bank (India), called for: national policies with guidelines for the financial sector; mandating financial institutions to take up specific targets on sustainable financing; and stronger governance by board-level committees in financial institutions.

Mustafa Suleyman, DeepMind, addressed ethical concerns about artificial intelligence (AI) and said “a fairer world won’t emerge by accident.” He said institutions must guarantee ethical outcomes by those in power, and called for more ambition about the governance of new technologies in order to direct them towards their potential benefits rather than their potential harms. He said a set of “digital rights” would help to address transparency, fairness and ethical concerns.

Steve Waygood, Aviva, said the World Benchmarking Alliance plans to build free, public, sector-specific rankings of companies based on their SDG impact. He urged the International Organization for Standardization (ISO) to produce a standard for sustainable capital markets. He also called for the International Organization of Securities Commissions (IOSCO) to ensure that their states require companies to produce a sustainability report.

Tariq Fancy, BlackRock, echoed the need for more data on ESG investing, and for agreeing on market standards for social impact investing. He said there is not yet a “clear currency,” nor an accounting framework, or third-party auditing, all of which are needed to predict profit and loss.

Courtney Rattray, Permanent Representative of Jamaica, urged a focus on: the international regulatory environment, shaping more hospitable environments for additional capital in developing countries, and international financial institutions’ role in de-risking projects.

Christian Deseglise, HSBC, said if we hadn’t been in a market failure to price externalities, such as climate change, the SDGs would have already achieved. He noted that several banks are starting to implement initiatives for greening the financial systems.

Tara Nathan, MasterCard, stressed that “cash is the enemy of the poor and of society,” as it exposes people and societies to risks and undermines their resilience. Noting that countries are losing 3-5% of their gross domestic product (GDP) on managing cash, she said Mastercard is trying to address this by placing financial inclusion at the core of its business development.

Terri Toyota, World Economic Forum (WEF), reported from “behind the scenes of Davos” to note that WEF has multi-year engagement plans that look at complex interlinkages between different systems and analyze the shifts needed to transition to a sustainable market. She recommended bundling projects and making them more investable on the demand side, and differentiating between the different types of capital available and the de-risking mechanisms on the supply side. She also underscored the need to enable information to flow freely, further echoing calls to set common standards to ensure a leveled investment playing field.

Belay Begashaw, Director of the SDG Center for Africa, said the Center was created in July 2016 to ensure that African countries have the necessary technical backstop to implement the SDGs and are able to contextualize the SDG targets. When reporting on the SDGs, he underscored the need to make that reporting relevant also for the 30-40% of the bottom of society, adding that the Center is creating a regional index to address the issue. He said the Center is also working on costing the SDGs.

Amanda Wallace, J.P. Morgan Asset Management, underscored the need for clearly defining “private sector,” noting that within the private sector there are various aspects that have different risk adjustment requirements.

The outcome of the event will be Chair’s summary that will draw on the outcomes of the deliberations, aimed to provide a “succinct and action-oriented” inventory of the solutions presented, as well as suggestions for future actions. The summary will contain explanatory statistics and graphs provided by UNCTAD and other major partners of the event. Further follow-up is envisioned through the development of a pack of recommended solutions and best practices developed with major partners, to be made available to Member States on a dedicated website managed by UNCTAD. The website is to be launched at the UNCTAD World Investment Forum in October 2018 and will cross-reference the various service providers in the international community. [Event website] [SDG Knowledge Hub sources]

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