24 December, Beijing – This month United Nations Development Programme (UNDP) and the New Development Bank (NDB) exchanged official letters to establish a channel of communication and technical knowledge exchange to advance SDG finance. It’s a start for UNDP to work with NDB in aligning its bond issuance with the Sustainable Development Goals, the global goals to protect people and planet, marking a new milestone for sustainable investment.
NDB’s upcoming RMB SDG-linked bond issuance utilizes UNDP’s SDG Finance Taxonomy and SDG Impact Standards for SDG Bonds. This marks the first instance of the usage of multilateral development bank against UNDP’s standards to align bonds with the SDGs in the world. Lessons learnt will be shared with broader stakeholders to push forward SDG-aligned investment globally.
“The annual financing gap to achieve the SDGs is estimated at US$ 5 -7 trillion. To bridge that gap, financial markets must effectively align with and prioritize sustainable development,” said Beate Trankmann, UNDP Resident Representative in China. “UNDP is excited to partner with NDB on this bond issuance; it will give us the first real-case scenario to test our standards for viability and applicability as well as their impact on advancing the SDGs.”
Since 2018, UNDP has been leading the SDG financing initiative with the launch of SDG Impact. It has since been developing the SDG Impact Standards for Bonds, which bring logic, clarity and transparency in the management and reporting on SDG aligned bond issuance. The standards for bonds are included in a suite of SDG Impact Standards, including for Private Equity Funds, Enterprises and Bonds, which offer a clear framework for integrating impacts on the SDGs into business and investment decision making.
More recently in 2020, UNDP published the SDG Finance Taxonomy as a China-specific instrument using the SDGs as metric and impact measurement indicators to screen and identify eligible SDG aligning projects for investors. Both tools aim to mobilize private capital to flow into sustainable development areas.
“We look forward to be the pilot issuer to test the application of UNDP Practice Assurance Standards for SDG Bonds and UNDP China’s SDG Finance Taxonomy.” said Leslie Maasdorp, Vice President and CFO of New Development Bank “We have established a channel of communication and knowledge exchange with UNDP to advance the implementation of the SDGs.”
The pilot is accompanied by technical and knowledge exchanges between UNDP and NDB, which will create momentum to integrate and mainstream SDG alignment and impact measurement and management within the investing sphere. Lessons and knowledge distilled from the pilot will lay a solid foundation for future advocacy and policy recommendations related to sustainable investing in an evidence-based manner.
UNDP China | Yue Zhao, Communications Officer | email@example.com