Corporate finance and investments as a catalyst for growth and social impact
The UN has estimated that the world will need to spend between $3 trillion and $5 trillion annually to meet the Sustainable Development Goals (SDGs) by 2030, and the ongoing Covid-19 pandemic has increased that estimate by an additional $2 trillion annually. CFOs have a critical role to play in reshaping the future of corporate finance and investment into a catalyst for growth, value creation, and social impact.
There is enormous potential to align corporate investments and finance with the SDGs, both to finance business contributions towards the SDGs and to build on existing sustainable finance solutions and framework to support the transition to sustainable development. New and adapted business models and markets represent critical and value-generating investment opportunities for both profit and impact.
The UN Global Compact has worked on sustainable finance for the last decade bringing companies, investors, and UN agencies together. The Financial Innovation Action Platform evolved into the CFO Taskforce in 2019 to establish the groundwork for a broad coalition of CFOs working to harness the full potential of corporate finance to empower the sustainable transition. The initiative has now launched the CFO Coalition for the SDGs.
CFO Coalition for the SDGs
The first UN initiative to target Chief Financial Officers worldwide
The CFO Coalition for the SDGs is a platform where global CFOs and other corporate officers can collaborate with peers, investors, financial institutions and UN agencies to develop principles, frameworks and recommendations to integrate the Sustainable Development Goals (SDGs) in corporate finance and create a market for mainstream SDG investments.
POSITION PAPER: CFO ACTION ON CORPORATE INVESTMENT AND FINANCE FOR SUSTAINABLE DEVELOPMENT
The purpose of this position paper is to establish the potential of Global Compact companies all over the world to invest at scale in key private sector solutions for the SDGs, especially in the clean energy transition and economic and social development. It also provides intellectual support for a broad Global Compact call to action to all its companies at the occasion of the SDG stocktake this year, to establish ambitious targets in five key areas including SDG-aligned corporate investments and finance with the SDGs (other areas include living wage, climate change, gender equality, and water stewardship).
As corporate sustainability initiatives increasingly become part of core business strategy, leaders are rethinking the future of corporate finance and corporate investments to advance social good. The United Nations Global Compact provides the guidance and resources finance executives need to transform their business models and incorporate the Sustainable Development Goals (SDGs) into their business models — a move that can open US$12 trillion in market opportunities.
Scaling SDG Finance for the Sustainable Development Goals
This guide explores the role of corporate finance and investments in scaling finance for the Sustainable Development Goals, including how FDI, financial intermediation and public-private partnerships can be a source of finance for less liquid SDG investments that cannot be invested directly by portfolio or institutional investors. This includes providing access to finance in countries with less developed financial markets or for SDG solutions that are too small or illiquid to attract portfolio investors.
SDG Bonds | Leveraging Capital Markets for the SDGs
This guide explores the role of the bond market – the largest asset class in the global financial markets – in the realization of the Sustainable Development Goals (SDGs). With US$ 6.7 trillion of annual issuance, bonds can provide a cheap, reliable and scalable source of capital for a variety of stakeholders involved in the implementation of Agenda 2030, including companies, governments, cities and public-private partnerships. SDG bonds also provide an answer to the lack of SDG investment opportunities for institutional investors. A diverse portfolio of SDG Bonds, including sovereign, municipal, corporate and project bonds across developed and emerging markets could fulfill mainstream investors’ growing demand for impact while matching their risk-return appetite.
Corporate Finance | A Roadmap to Mainstream SDG Investments
Investors, Governments and other stakeholders are increasingly demanding that companies demonstrate sustainable strategies aligned with the SDGs. This report provides guidance to companies looking to integrate the SDGs into their financial strategy and business model. A credible SDG strategy allows companies to clearly communicate impact, facilitate easier access to the growing market for SDG financing, and connect investors with a pipeline of potential opportunities to address the SDG investment gap.
Blueprint for implementation of the CFO Principles
As CFOs in the Coalition, we have committed to work together with partner organizations and other key actors to develop, test, and refine guidance and recommendations to implement the CFO Principles. This Blueprint represents our collective experience in implementing the principles and understanding of underlying concepts. It is a dynamic, online platform that will evolve as our community continues to grow and progress towards integrating the SDGs in corporate finance.
SDG impact thesis &
Integrated SDG strategy
Integrated SDG corporate
Integrated SDG communications
18 May 2022
UN Global Compact Academy Session
"A Primer on the CFO Principles for SDG Investments"
1 June 2022
UN Global Compact Leaders Summit 2022
The UN Global Compact’s premier business event in June 2022
In collaboration with our key partners:
I am an expert in corporate finance and investments with a deep understanding of sustainable development goals (SDGs) and their integration into business strategies. My expertise stems from extensive hands-on experience and a comprehensive knowledge of the global financial landscape.
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UN's SDG Funding Estimate:
- The UN estimates a need for $3 trillion to $5 trillion annually to achieve SDGs by 2030.
- The ongoing Covid-19 pandemic has increased the estimate by an additional $2 trillion annually.
Role of CFOs:
- CFOs play a critical role in reshaping the future of corporate finance and investment.
- Their role is to turn corporate finance into a catalyst for growth, value creation, and social impact.
UN Global Compact and Financial Innovation Action Platform:
- The UN Global Compact has been working on sustainable finance for the last decade.
- The Financial Innovation Action Platform evolved into the CFO Taskforce in 2019.
CFO Coalition for the SDGs:
- It is the first UN initiative targeting Chief Financial Officers worldwide.
- The platform allows collaboration among global CFOs, corporate officers, investors, financial institutions, and UN agencies.
CFO Principles on Integrated SDG Investments and Finance:
- Companies participating in the UN Global Compact can join the CFO Coalition by becoming signatories.
- Four principles support the transition to sustainable development using corporate finance and investments for SDG realization.
Position Paper: CFO Action on Corporate Investment and Finance for Sustainable Development:
- Aims to establish the potential of Global Compact companies to invest at scale in key private sector solutions for SDGs.
- Calls for ambitious targets in areas such as SDG-aligned corporate investments and finance, living wage, climate change, gender equality, and water stewardship.
Scaling SDG Finance:
- Explores the role of corporate finance and investments in scaling finance for SDGs.
- Discusses foreign direct investment (FDI), financial intermediation, and public-private partnerships as sources of finance.
SDG Bonds: Leveraging Capital Markets for the SDGs:
- Explores the role of the bond market in realizing SDGs, providing a cheap, reliable, and scalable source of capital.
- SDG bonds address the lack of investment opportunities for institutional investors.
Corporate Finance Roadmap to Mainstream SDG Investments:
- Provides guidance to companies integrating SDGs into their financial strategy and business model.
- A credible SDG strategy facilitates easier access to the growing market for SDG financing.
Blueprint for Implementation of CFO Principles:
- Represents the collective experience of CFOs in implementing the principles.
- Dynamic online platform evolving with the community's growth and progress towards integrating SDGs in corporate finance.
Principles 1-4 in the Blueprint:
- Principle 1: SDG impact thesis & measurement
- Principle 2: Integrated SDG strategy and investments
- Principle 3: Integrated SDG corporate finance
- Principle 4: Integrated SDG communications & reporting
- UN Global Compact Academy Session on "A Primer on the CFO Principles for SDG Investments" on May 18, 2022.
- UN Global Compact Leaders Summit 2022 on June 1, 2022.
This comprehensive overview demonstrates the intricate interplay between corporate finance, SDGs, and the concerted efforts of CFOs globally to drive sustainable development through their financial strategies.