Collaboration and consultation have been essential to UNDP’s Sustainable Development Goals (SDG) Impact Standards. The idea of creating standards to help the private sector better align their work toward achieving the SDGs was itself a response to requests my colleagues and I have been hearing consistently. Investors and companies have been asking how to target their activities and measure their impact when it comes to goals such as shrinking carbon footprints, reducing poverty, or increasing access to education. As the integrators and stewards of the Global Goals, it made sense for UNDP to provide such guidance.
The SDG Impact Standards serve to operationalize important existing principles to encourage more consistent implementation and provide credibility to the market, reducing the risk of 'SDG-washing'--the use of a UN logo to signal sustainability, without doing much.
By providing process indicators that form the building blocks of an impact management system, the Standards lay the foundation for transparency and assurance, and are the basis for more credible and reliable performance data, all of which are necessary preconditions for growing a market.
The Standards are voluntary and freely available for all to use. They are targeted at those who direct private investment activity towards achieving the SDGs and designed to promote market development. This audience includes fund managers, bond issuers, investors, and others such as assurers, development finance institutions and governments.
We want these Standards to be different from other frameworks that fold social and environmental considerations into business and investing. UNDP Standards provide step-by-step guidance and a system on how a fund or firm should measure, manage, report, and disclose its contributions to the SDGs. There are no other standards focused on providing specific guidance on practice to promote better decision making and improve transparency--others focus on performance metrics and benchmarking. The more real-world input we get from those investors, the more useful the Standards will be.
However, as we are not the ones who will ultimately use the SDG Impact Standards, we rely on those who will to provide their input throughout the process of developing them. Since we launched the first draft of the SDG Impact Standards for Private Equity in September 2019, we’ve been fortunate to have many advisors and collaborators, from our Steering Group, to various partner organizations, to fund managers who’ve offered feedback during our open comment periods.
We are nearly at the end of one of these periods. Until 31 July, we are accepting comments on the second draft of our Private Equity Fund Standards, and on the first version of our SDG Bond Standards. In addition to welcoming comments on our website, we have held more than 50 consultations across Asia, Africa, Europe, Latin America, and the United States, with more than 4,000 participants.
These open comment periods are not just a formality; we genuinely welcome feedback, and try to incorporate as much of it as we can. In the time between when we released the first draft of the Private Equity Standards last fall, and the revised version in June 2020, the Standards underwent major restructuring. We streamlined the product significantly, going from an initial 18 Standards and 83 Practice Indicators down to six Standards and 26 Practice Indicators. We also recategorized the remaining Standards to better map internal processes and added more resources and examples to enhance their clarity and usability.
If targeting and evaluating your firm or company’s environmental and social impact is something you have found challenging, these Standards are for you, and we want your honest opinion. We hope you will take the chance before the end of the month to review the SDG Impact Private Equity Fund and/or SDG Bond Practice Standards and share your thoughts with our team.