Stockholm (NordSIP) – The United Nations has convened an “SDG Financing Lab” to mobilise institutional investment, NordSIP has learned. In remarks to the UN General Assembly at the High Level SDG Action Event “SDG Financing Lab” on April 18, its president, Peter Thompson, explained the centrality of this initiative to the 2030 Agenda for Sustainable Development. “Sustainability is increasingly recognized around the world as being the most sound, long-term business logic,” he said.
According to UN estimates, financing the Sustainable Development Goals (SDGs) will require annual investments of roughly US$6 trillion, or US$ 90 trillion over 15 years. Costs of inaction, Mr Thompson emphasized, would be immeasurably higher, including putting at risk the future of humanity’s place on earth.
The SDG Financing Lab aims to foment a global conversation bringing together all stakeholders to discuss how the right combination of resources can be mobilized in order to achieve the SDGs. This includes sources of financing in national contexts, the availability of different financial instruments and what steps must be taken to align financial markets and investment patterns with the Sustainable Development Agenda.
The event at the United Nations was to serve as a platform for initiating such discussions among private sector actors and identifying strategies to make the financial system greener and more sustainable.
“We must distinguish between the various sources of capital and asset classes that they represent, and recognize their varying spheres of operation and influence – from multinational corporations through to grassroots small-holder farmers. Indeed, for example, institutional investors have vast pools of capital managed by insurance companies, pension funds, sovereign wealth funds, and philanthropic organisations. In the OECD alone these are valued at over US$80 trillion,” Thompson said. “Shifting the investment behaviour of just this category of private sector actors has the potential to transform our global efforts to establish sustainable financial systems promoting long-term investments, fostering social inclusion and environmental stewardship, and generating economic growth.”
Institutional investors have divested over US$ 2.3 trillion from fossil fuel assets in the past 2-3 years, he added, also pointing to how Sovereign Wealth Funds use their leverage to change “corporate short-termism” to bring a greater focus on sustainability.
With such examples, Thompson called for a scaling up of efforts through the additional impetus of the G20’s work on green finance and initiatives such as the UNPRI, the Carbon Pricing Leadership Coalition and Sustainable Stock Exchanges, through reforming existing policy and regulatory frameworks to leverage public and private financing for the SDGs.
He also stressed that addressing the drivers of conflict, displacement and humanitarian crises was imperative, as these clearly undermine the achievement of sustainable development.
Read Peter Thompson’s remarks to the UN General Assembly at the opening the SDG Financing Lab here.