July 24, 2019
Impact investment has gained worldwide traction as a method of solving development challenges in a more sustainable way. The Global Impact Investing Network (GIIN) identifies impact investments as investments made with the intention of generating a positive, measurable, social and environmental impact alongside a financial return. Over the past few years impact investment has grown from niche to almost $23 trillion of investments worldwide managed under environmental, social and governance standards.
In 2015 more than 150 world leaders adopted the 2030 Agenda for Sustainable Development and opened up a new era for the Sustainable Development Goals (SDGs). The SDGs call for worldwide action among governments, businesses, international organizations and civil society to make economic growth socially and environmentally sustainable.
The SDGs represent a truly ambitious undertaking and an opportunity for the world to chart a more sustainable path, however, estimates of cost implementation range from US$5-7 trillion. When viewed alongside traditional ODA budgets of around $150 billion annually, the scale of the undertaking and ambition becomes apparent.
Clearly the SDGs cannot be achieved without the robust participation of the business community and private capital – of which there is currently $256 trillion under management. Just 1.5% of this would meet the financial gap for the SDGs. But what about business’ interest? Why does the private sector need the SDGs?
According to a study carried out by the OECD, investing in the SDGs globally could help generate $12 trillion of value to businesses, while business opportunities associated with them could put 380 million people into work by 2030.
Fundamentally, the SDGs represent an excellent investment opportunity, a means of enhancing sustainability and a way of opening up new revenue streams.