Action Platform

Financial Innovation for the SDGs

There is little doubt that true global sustainability will only be achieved through a fundamental restructuring and re-orientation of the global financial system. It is estimated that achieving the Sustainable Development Goals (SDGs) will cost between $3 trillion to $5 trillion annually in developing countries alone, according to UNCTAD. At today’s level of investment— public and private— this implies an annual shortfall of some $2.5 trillion.

To achieve the SDGs, portfolio investors (including corporate pensions) and other financial sub-sectors need to be activated at a different level than they are today and new investment products and innovations are needed. Together with UN partners the UNEP Finance Initiative (UNEP FI) and the UN-supported Principles for Responsible Investment (PRI)— representing more than 1,500 financial organizations from over 50 countries with combined $60 trillion USD in assets under management— the United Nations Global Compact will lead the search for innovative financial instruments that have the potential to redirect private (and public) finance towards critical sustainable solutions.

Indeed, for companies and investors looking for returns and impact, the 17 SGDs provide a set of quantitative and qualitative goals and targets to align investing strategy and track progress. Already, we have seen the rise of exciting financial innovations underway in recent years, including green bonds, social impact bonds and public equity sustainability indices.

Now, the SDG era presents an opportunity to take financial innovation to a scale never seen before. By targeting investors, including institutional, retail, corporate pension funds and other asset managers, and involving the proper partners from business and civil society, we believe we can make a meaningful and impactful contribution to a critical imperative.

With the vast participant base and global reach of the UN Global Compact, PRI and UNEP FI, we are uniquely positioned help financial innovation reach a larger scale than ever before— a necessary step to address the current $2.5 trillion shortfall in investment needed to achieve the SDGs.

Anchored in our long-standing work with financial markets, including the breakthrough Who Cares Wins initiative, the UN Global Compact’s Catalyzing Financial Innovation initiative will map SDG-relevant investment instruments and tools, while helping to bring about a revolution in financial innovation for companies and investors alike.

Expected Outcomes

  1. A UN Global Compact-hosted online platform encompassing the mapping of SDG-relevant instruments, as well as a laboratory for new concepts. The online platform will also include areas devoted to Norms and Policy Instruments, and Analytics and Benchmarks—both areas referencing important third-party resources and work. It will also serve as a resource to help corporates and investors find relevant financial instruments to deliver on their SDG commitments.
  2. State-of-play Guidance on how institutional investors can effectively scope the SDGs with an eye towards pursing investment opportunities that deliver positive impact in financial and societal terms.
  3. Intelligence on emerging political, economic, and financial trends that are re-shaping the investment landscape.

Benefits of Engaging

  • Catalyze change in the global financial system that will help the world achieve the SDGs by 2030
  • Access a network of innovative companies, investors from across financial asset classes, and other key stakeholders
  • Understand the types of financial instruments needed to advance the SDGs and how these can create new markets for companies and investors
  • Receive support to further integrate the SDGs into your company’s investments and pension funds
  • Contribute to UN processes on financing for development

Activities & Events

  • A series of in-person expert working group meetings, workshops and roundtables held around the world
  • Virtual meetings via webinars
  • Consultative process to calls for examples of existing or new innovative financial solutions
  • Opportunities to contribute to research

Timeframe

  • January 2017 – December 2018

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    Our Partners

    • PRI
    • UNEP FI