New York — The United Nations Development Programme (UNDP) released for consultation Standards to guide private equity fund managers and bond issuers in directing activities toward achieving the globally agreed Sustainable Development Goals (SDGs). These Standards are the latest contribution of market-focused tools from SDG Impact, a flagship initiative of UNDP’s Finance Sector Hub, focused on accelerating investment to achieve the SDGs. The Standards will be available for comment and consultation through 31 July 2020.
As governments and markets around the world face the dual challenges of a pandemic and climate change, private capital will play a vital role in meeting immediate needs and financing paths toward achievement of the SDGs. “Investors want useful guidance and tools to make better informed decisions to help them allocate and manage investment and drive capital to where it is needed most” UNDP Administrator Achim Steiner said.
These Standards are timely as a growing number of pandemic and social bonds come to market. “If ever we needed ambitious shared goals to open paths to a better future, it is now,” SDG Impact Director Elizabeth Boggs-Davidsen said. “UNDP’s stewardship for the SDGs enables us to offer these tools on a competitively neutral platform.”
UNDP has Practice Assurance Standards in development for SDG Bonds, Private Equity Funds, and Enterprises. UNDP plans through SDG Impact to establish an assurance system and SDG Impact Seal.
“We’ve been able to bring together leaders from across the globe in collaboration around the urgency of practice to drive investment capital to where it’s needed,” Boggs Davidsen said. “The Administrator chairs a Steering Group of pioneering leaders, and we have access to deep expertise in standards through SDG Impact’s Standards Expert Fabienne Michaux, who brings lessons from her role in finance and ratings, including heading Standard & Poor’s across developed markets in Asia.”
“These Standards build on other useful tools in the market and bridge a gap between high-level principles and impact reporting by providing a common framework for what to do and how to do it,” Michaux said. “Bringing rigor and transparency to impact management on a consistent and comparable basis will develop our understanding how investments contribute to the SDGs and help investors make more informed decisions.”
The SDG Bond standards are the second set to be released and incorporate feedback on the first draft of Private Equity Standards, which has informed a more streamlined, user-friendly approach.
“The feedback from dozens of stakeholders on the draft for Private Equity was really useful,” said Boggs Davidsen. “There was significant interest from across the market, from those who have been investing for impact for a long time and others who have seen the potential more recently.”
“We see a lot of impact investment, but nothing on the scale we know is required,” Steiner said. “This is still an emerging field and there is much for us all to learn. With a presence in some 170 countries, UNDP aims to assist countries in rapidly evolving the investment landscape to attract more capital to achieve the SDGS. These Standards aim to capture the best of what we see in the market, to provide a very practical and scalable way forward.”
SDG Impact’s Practice Assurance standards will help SDG bond-issuers and investors retain confidence that their activities and capital are helping to achieve the SDGs.