The UN announced today that 30 influential leaders from the corporate world will work together over the next two years in a bid to free up trillions of dollars from the private sector to finance the Sustainable Development Goals.
Convened by Secretary-General António Guterres, the Global Investors for Sustainable Development (GISD) Alliance is co-chaired by Oliver Bäte, CEO of Allianz, and Leila Fourie, CEO of the Johannesburg Stock Exchange, and includes the heads of Safaricom, Bank of America, Citigroup, ICBC, Infosys, Investec, Santander, UBS and other prominent international corporations.
“We face widening inequality, increased devastation from conflicts and disasters and a rapidly warming Earth. These leaders have seized our sense of urgency, recognizing that our pace must be at a run, not a crawl,” Guterres said. “They are committing to cooperate across borders, across financial sectors and even with their competitors, because it is both ethical and good business sense to invest in sustainable development for all people on a healthy planet.”
The High-Level Dialogue on Financing for Development held during the recent UN General Assembly brought to attention the urgent need for increased government spending on crucial sectors such as health, education, infrastructure, and climate change.
Most developed countries have not met their commitments to ODA, while factors like poverty, corruption, and tax evasion limit domestic resources in developing countries.
The development finance needs are estimated at trillions of dollars per year, and even if funding from all public sources is maximized, there will still be a significant shortfall, making financing from the private sector imperative.
“Given the current state of the world in terms of growing inequalities; rising carbon emissions; growing global hunger; rising unemployment and social discontent, business leaders must play a larger role in ensuring their companies take the lead in societal transformation through business processes and services and not just through philanthropy. We are honored to be joining this alliance that will help scale up investment for sustainable development”, said Michael Joseph, CEO, Safaricom.
The UN’s research suggests that there is no shortage of money from the private sector which could be invested in sustainable development. However, a combination of factors, including the policy environment, incentive structures, and institutional conditions, tend to discourage the kind of long-term commitment that is needed.
The Alliance aims to use their expertise, influence and business acumen in devising ways to stimulate long term investment in development and speed up progress towards achieving the SDGs.
Over the next two years, the group will:
- Deliver solutions to unlock long-term finance and investment in sustainable development both at the company and system-wide levels;
- Mobilize additional resources for countries and sectors most in need;
- Find ways to increase the positive impact of business activities; and
- Align business practices with the 2030 Agenda for Sustainable Development.
The move comes amidst a growing recognition in the corporate community that the continued success of their companies is inextricably linked to a sustainable future for the world.
The Secretary-General has established a timeline for actionable results over the life of the Alliance. Its work will be coordinated by the UN’s Department of Economic and Social Affairs.
Background:
The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, provides a blueprint for peace and prosperity for people and the planet, now and into the future.
At its heart are the 17 Sustainable Development Goals (SDGs), which recognize that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests.
The GISD Alliance is part of the UN’s strategy on financing for sustainable development, informed by the Addis Ababa Action Agenda.
The Action Agenda provides a global framework for financing sustainable development by aligning all financing flows and policies with economic, social and environmental priorities. It includes a set of policy actions, with measures that draw upon all sources of finance, technology, innovation, trade, debt, and data, in order to support the achievement of the Sustainable Development.
Global Investors for Sustainable Development Alliance Fact Sheet
The UN’s recent SDG Summit showed that there has been significant progress towards meeting the Sustainable Development Goals (SDGs), as shown notably by falling rates of extreme poverty and child mortality; rising rates of access to energy and decent work; and a renewed commitment to the 2030 Agenda.
However, conflicts, the climate crisis, gender-based violence, and persistent inequalities leave the SDGs off track. Among the most urgent challenges are alarming levels of youth unemployment; uneven growth, rising debt levels, and trade tensions; rising global hunger; continued gender inequality; and the ravages of climate change, with 1 million species in danger of extinction.
Achieving the SDGs will cost trillions of dollars per year, mainly in health; education; climate action; and infrastructure—including power & energy; telecommunications; transport; and water and sanitation. Financing will be largely from the public (government sources) but even if all countries meet all their obligations, it will not be enough to achieve the targets.
UN Secretary-General António Guterres has formed the Global Investors for Sustainable Development (GISD) Alliance to help scale up investment for sustainable development. The launch and first meeting with the Secretary-General will be on 16 October 2019.
The membership comprises 30 heads of financial institutions, manufacturing corporations and technology service providers. They include asset owners, asset managers, and non-financial corporations from both developed and developing countries.
This is the first time such a high-powered international business group has come together under the auspices of the Secretary-General. They will use their influence and experience to find ways to rapidly and significantly increase the private sector’s contribution to achieving the SDGs.
- The SG has appointed Oliver Bäte, CEO of Allianz, and Leila Fourie, CEO of the Johannesburg Stock Exchange as co-chairs.
- The entire GISD membership will meet once a year, but their representatives will meet more frequently. In addition, they will consult external stakeholders on a regular basis during the life of the Alliance, including at the ECOSOC Forum on Financing for Development in April 2020.
- The GISD Alliance is organized into three Working Groups:
Working Group 1, co-chaired by Citigroup & Emirates Environmental Group: Increasing the available supply of long-term investment for sustainable development.
Working Group 2, co-chaired by Allianz SE & Eaux Minérales d’Oulmès: Realizing SDG investment opportunities in developing countries.
Working Group 3, co-chaired by Nuveen & UBS (TBC) Enhancing the impact of private investment on sustainable development.
The Alliance has a two-year timeline with a mandate to deliver to the SG on an ongoing basis actionable recommendations and concrete initiatives, both regulatory and corporate.