Chief executives from 30 of the world’s biggest companies have promised to do more in support of investment to tackle a shortfall measuring trillions of dollars a year in funding the UN’s sustainable development goals.
The business leaders represent a range of industries from banks such as UBS and China’s ICBC, to pension groups such as Aviva and Japan’s Government Pension Investment Fund, and industrial companies including Enel of Italy and Kenya’s Safaricom. They were brought together by UN secretary-general António Guterres.
Members of the new Global Investors for Sustainable Development alliance committed to “scale up and speed up” their efforts to align their businesses with the 17 wide-ranging goals covering everything from ending hunger to peace, economic growth and climate action that the UN has set for 2030. They also promised to remove barriers in the way of others committing more to development finance.
“Developing fundable, bankable projects that achieve the SDGs requires a supply/demand matchmaking process that is not there yet. If you need to move $3tn a year more, we need to be talking about using the capital markets and structures that can scale,” said Citigroup vice-chairman Jay Collins, referring to the size of the estimated shortfall in funding the goals.
Chief executives told a launch event at the UN’s New York headquarters that the alliance would focus on increasing long-term finance and investment directed to sustainable development.
They also plan to improve the quality of data on SDG investment opportunities and create common standards for measuring the impact of such investments. Companies were keen to demonstrate impact but were still “wrestling” with how to measure success, said Oliver Bäte, chairman of Allianz and one of the co-chairs of the alliance.
At last month’s UN general assembly, 140 banks signed up to the UN’s Principles for Responsible Banking, an agreement to work on more consistent ways of measuring sustainability.
Mr Collins said there were now trillions of dollars potentially available for sustainable investment, “but the metrics aren’t standardised yet . . . the data’s off, inconsistent and often backward-looking”. The alliance would integrate the work of existing initiatives, he added.
“There is a lot of rhetoric. A lot more tangible action needs to be ,” said Leila Fourie, the newly appointed chief of the Johannesburg Stock Exchange and the alliance’s other co-chair.
She noted, however, that indices of socially responsible companies had been outperforming other stocks, bolstering the business case for companies to invest in sustainability.
Mr Bäte said he believed that companies were now driving the response to certain global public policy issues. Attending the 2015 UN climate change conference in Paris was “a defining moment”, he said: “I felt that now business is pushing a lot more than governments. We think a lot more about implementation and execution than governments do.”
“I don’t think we’ll ever declare victory that the planet is sustainable or as healthy as possible,” said Mark Haefele, chief investment officer of UBS Wealth Management. “But right now, we don’t even have the financial pipes hooked up to make a substantial effort toward achieving the goals. That’s why we’ve made commitments on the impact side and the sustainable development side, to at least hook up the pipes.”