Halfway towards the 2030 Agenda, UNDP updates its Private Sector Strategy with lessons learned
Engaging the private sector to achieve the 2030 Agenda
October 3, 2023
In 2020, for the first time in 20 years, the number of people living in extreme poverty increased. Now more than eight out of 100 people – 675.5 million – survive on less than US$1.90 a day, more than 2.1 billion people lack clean water, and 1.1 billion lack access to energy.
Short-term thinking continues to dominate investment decisions, undermining long-term sustainability. The absence of vital infrastructure and sound legal and financial systems keeps marginalized people trapped in localized cash-based economies. Making markets work for all people not only reduces poverty but provides new spaces for business growth and innovation. The opportunities are vast, but so are the obstacles.
UNDP’s Private Sector Strategy (2018-2022) aimed to foster partnerships with governments, civil society, and businesses, and to enhance the private sector's role in achieving the Sustainable Development Goals (SDGs) by integrating these goals into private-sector strategies and operations.
Despite progress, bottlenecks remain. Governments continue to face challenges in creating policies that incentivize long-term investment and encourage business alignment with the SDGs. Many enterprises still fail to recognize the advantages of adopting sustainable practices or lack the knowledge to adapt their business models.
“Involving the private sector requires systemic change, innovative sustainable business models, and market incentives for widespread adoption. Such systemic shifts are needed to foster sustainability and resilience among market participants."Sahba Sobhani, Director of UNDP’s Istanbul International Center for Private Sector in Development
Building on the 2018-2022 Strategy, UNDP has extended its Private Sector Development and Partnership Strategy for 2023-2025. The updated Strategy’s primary goals are to engage the private sector in unlocking $1 trillion in capital for the SDGs and increase the number of businesses aligning their strategies and operations with these goals.
Aligned with UNDP’s Strategic Plan (2022-2025), it encompasses areas such as development finance, value chains, risk-informed development, carbon markets, circular economy, food systems, and energy financing for gender equality.
And, in addition to working to unlock US$1 trillion in public and private capital for the SDGs, it also focuses on making markets work for two additional ‘moonshots’ established in the Strategic Plan to:
The private sector has demonstrated its potential as a vital actor in sustainable development: from 2014 to 2020, global sustainable investments increased 25 percent, from $18.28 trillion to $35.3 trillion. Investors are increasingly demanding sustainability outcomes, and farsighted business leaders see the SDGs as a framework for confronting an uncertain future.
“The current momentum for change reflects an emergent market system. While still small, this positive trend in investments focused on sustainable development – if effectively leveraged – could become the dominant market system, ensuring achievement of the SDGs.”Marcos Neto, Director of UNDP’s Sustainable Finance Hub
UNDP has a major role in catalyzing this transition towards sustainable financial systems that drive positive SDG impact. Guided by its updated Private Sector Strategy, UNDP will continue to work with businesses to remove barriers and identify SDG-aligned investment opportunities.
About UNDP SFH
UNDP’s Sustainable Finance Hub supports UNDP Country Offices in aligning public as well as private finance with the SDGs. Working with UNDP Regional Bureaus, the Sustainable Finance Hub promotes knowledge and technical/ technology exchanges between countries through South-South partnerships and works to generate stronger regional integration on key financing-related topics.
About UNDP ICPSD
UNDP’s Istanbul International Center for Private Sector in Development (ICPSD) supports the private sector and foundations to become transformative partners in development through research, advocacy for inclusive business, facilitation of public-private dialogue, and multi-stakeholder partnerships.