January 9th, Beijing – The United Nations Development Programme (UNDP) China held a Consultation on the Practice Assurance Standards for Private Equity & Use-of-Proceed Bonds (the Standards for short) last week in Beijing. The event collected professional feedback on the Standards to validate their feasibility and innovativeness, to drive private capital investment towards the Sustainable Development Goals (SDGs) and promote attainment of SDGs globally. More than 40 representatives from financial institutions, investment companies and self regulatory organization joined in this in-depth discussion on the applicability of the Standards.
Since the UN’s adoption of the 2030 Agenda for Sustainable Development in 2015, the 17 SDGs have provided a global framework for the development vision of a more prosperous, equitable and sustainable future. Yet 5 years after the implementation of the 2030 Agenda, there is a financial gap to achieve the SDGs that requires investments from the private sector in order to address.
Ms. Beate Trankmann, UNDP Resident Representative in China, said in her remarks: "Investors’ enthusiasm for aligning their capital contribution with global sustainable development has been increasing. China is one of the countries with the largest share of SDG business opportunities. Under such circumstance, an aligned and accredited framework and standard that can tap investments into development arenas proactively and measure the impact of investments becomes critically important. Cooperating with partners worldwide, our mission is to align relevant investments with SDGs to advocate for embedding impact into the heart of investment’s whole lifecycle and to demonstrate investors’ contributions to sustainable development, and then to direct more private capitals to flow into sustainable financing.”
As a UNDP flagship initiative to advance the 2030 Agenda, the Standards aim to help achieve this mission. "UNDP’s SDG Impact Practice Standard aims to inspire contributions to sustainable development from the entire value chain and provide intellectual support for SDG-enabling investments’ decision making. The essence of the Standard is to create a common language system and framework based on SDGs and dimensions of SDG impact, to facilitate the private sector to fully understand the nature and the depth of SDG financing,” from Ms. Elizabeth Boggs Davidsen, Director of SDG Impact UNDP.
At the consultation, stakeholders gave high recognition to the Standards regarding its targeted audience, application and assessment framework, impact indicator system, etc., and raised several constructive suggestions, which can be summarized as follows:
(1) The Standards target at a wide range of audience, including fund managers, corporate executives, industry associations, asset owners and investors, financial advisors and equity analysts, research institutes and financial development institutions, governments and multilateral organizations.
(2) The Standards provide practical guideposts to incorporate impact measurement and management mechanism into the investment’s whole lifecycle, even including post-exit impact. Instead of merely reporting on activities, the Standards take wider range of stakeholders into consideration.
(3) The Standards aim to apply best practices to a broader market, while also facilitating implementation of existing principles in place, and provide references for relevant performance reporting and benchmarking.
(4) The Standards are innovative in terms of quality assurance. Sophisticated guidance on data collection and management as well as regular assessment are good lessons to learn for domestic markets.
(5) The Standards offer complementary evidence for regulators who are promoting green investment and sustainable investment domestically. It’s concerned more about stakeholders’ engagement and feedbacks, including investees and beneficiaries.
(6) Meanwhile, participants suggested to add one more part to introduce best-practice cases, to help investors better understand what benefits of SDG financing can bring to them.
The series of Standards is collecting public feedback and is expected to be tested and improved later this year and officially piloted in the market upon release.
The Standards are available for download here.
For more information about SDG financing, please contact Dr. Qing Xu at email@example.com