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, 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,” he added.
The high-level dialogue on financing for development held during the recent UN General Assembly brought to attention the urgent need for increasing government spending on crucial sectors such as health, education, infrastructure, and climate change. Most developed countries have not met their commitments to Official Development Assistance (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 honoured 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 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;
· 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.