From Proof of Concept to Institutionalization and Adoption

UNDP SDG Impact Steering Group
Photo by UNDP SDG Impact
From Proof of Concept to Institutionalization and Adoption

Two and a half years after the launch of UNDP SDG Impact as a “start-up” at the UN General Assembly – with the ambition to accelerate investments towards achieving the Sustainable Development Goals (SDGs) – our Steering Group, composed of global champions and thought leaders from finance and enterprise, in May 2021 unanimously attested to our graduation from concept and development to institutionalization and adoption stages, to follow the “start-up” analogies. At this critical junction of UNDP SDG Impact, as the Finance Sector Hub (FSH) flagship initiative for SDG-aligned private capital, we would like to take a moment to look back at our successfully developed products and take stock of how we are working towards integration and change with Governments and private partners.

First, after the development of the SDG Impact Standards through extensive public consultations, providing a clear framework for integrating impacts on SDGs into business and investment decision, they have been successfully applied and integrated across markets. In China, for example, the New Development Bank (NDB) used the SDG Impact Standards for Bonds to issue a three-year fixed rate RMB 5 billion Bond in the country’s Interbank Bond Market. To help Micro, Small and Medium Enterprises (MSMEs) making use of the SDG Impact Standards for Enterprises, we have convened a working group to create MSME-specific guidance to encourage global adoption, and, in partnership with Social Value International (SVI), we are training over 50 UNDP Country Offices across regions on the use of the impact measurement and management practices and tools to support investors, bond issuers and enterprises in channelling capital towards the SDGs. Targeting specifically development finance, we used our SDG Impact Standards as the basis for a partnership with the world’s key forum stimulating economic progress to develop the OECD-UNDP Impact Standards for Financing Sustainable Development. Approved by the OECD Development Assistance Committee (DAC) in March 2021, they provide a framework for donors, domestic financial institutions, and their private sector partners to make financial decisions and manage impact on projects, marking an important step towards greater public accountability amongst organization involved in financing sustainable development.

Second, we developed the SDG Investor Map as an innovative market intelligence tool that translates development needs into tangible investment opportunities where private capital can advance the SDGs. Following the implementation of 15 SDG Investor Maps – directly benefitting from UNDP’s Development Finance Assessments (DFAs) and contributing towards the UN and European Union (EU) led Integrated National Financing Frameworks (INFFs) –, we soft-launched the SDG Investor Platform on the margins of the ECOSOC Forum on Financing for Development and the SDG Investment Fair in April 2021 to make the country level market intelligence publicly accessible to investors and other stakeholders. Since then, the UN Secretary General’s Global Investors for Sustainable Development (GISD) Alliance, which convenes 30 business giants worth USD 16 trillion, integrated the SDG Investor Platform into its offering, and the UN Department of Economic and Social Affairs (UN DESA) adopted the SDG Investor Platform as its standing mechanism to convene the SDG Investment Fair as a year-round platform. This UN-wide collaboration and the private backing makes the SDG Investor Platform a truly transformational initiative to help countries unlock the critical financing that is needed to build forward better from the COVID-19 pandemic.

Third, in order to actively engage the private sector on the SDG-aligned business opportunities and encourage investors to enter and navigate new markets, making use of UNDP’s presence in more than 170 countries and territories, we provide facilitation support across the globe in collaboration with key public and private partners, such as national investment promotion agencies like the Ghana Investment Promotion Centre (GIPC), the International Chamber of Commerce (ICC) and the Global Steering Group (GSG) for Impact Investment. In Turkey, for example, we convened 60 investors and enterprises around sectors where development needs and policy priorities intersect, which resulted in the exploration of collaborations between several investors and enterprises, such as the European Bank for Reconstruction and Development (EBRD) and Standard Chartered. Two additional examples: In Nigeria, we support the Central Bank in assessing an investment in the grain storage and aggregation investment opportunity area and explore the application of the SDG Impact Standards at the Nigeria Stock Exchange (NSE), and in Colombia, we work with Bancolombia, a leading financial institution in Latin America and a GISD Alliance member, to guide their investment activities in areas identified in the country’s SDG Investor Map.

Going forward, we want to build on this progress and further institutionalize our products and facilitate change. Nurturing existing and additional strategic partnerships plays a key role in eliminating barriers to and driving integrity for SDG-enabling investment at scale. This includes our ongoing collaboration with Temasek Trust to mobilize private capital to generate positive social and sustainability outcomes in Southeast Asian countries (ASEAN) through the awareness, adoption and application of UNDP’s tools in the region, as well as the exploration of an MBA course with leading universities to orient tomorrow’s business leaders towards sustainability, starting with a pilot at the University in Cambridge. In the coming months, the SDG Investor Platform will turn into a hub for SDG-enabling investment, which will integrate Government-led investment projects (starting with a pilot from the 2021 SDG Investment Fair) and offer a free online Impact Management and Measurement Training designed with the Center for the Advancement of Social Entrepreneurship (CASE) at Duke University. The SDG Investor Platform will also host UNDP’s and partners’ knowledge products, including the SDG Impact Standards for which we are currently developing an assurance framework.

The journey towards pursuing a truly new way of doing business is long and requires hard work, and apparent shortcuts do not fulfill the purpose of business sustainability, as a recent article critically highlights. With SDG Impact, we strive to offer the clarity, insights and tools that investors and enterprises need to purposefully contribute to the SDGs. This aligns closely with UNDP’s broader engagement on sustainable finance, and allows us to utilise some of the tried-and-tested products within our policy work, including the G20 Sustainable Finance Working Group (SFWG), where UNDP has the privilege to serve as a secretariat in support of the co-chairs China and the United States.

Please stay tuned for future developments through the SDG Impact Twitter page and newsletter, and reach out to us via sdginvestorplatform@undp.org if you would like to learn more about our products or explore partnerships that contribute towards the achievement of the SDGs.

UNDP, FSH, SDG Impact