At their annual meeting with United Nations Secretary-General António Guterres today, the Global Investors for Sustainable Development (GISD) Alliance issued a joint statement outlining concrete actions for the future. Recognized for trailblazing work in sustainable development finance, the group is working with the UN to develop guidelines and products that align the existing finance and investment ecosystem with the Sustainable Development Goals (SDGs).
“As private sector leaders, you have a great responsibility”, Guterres said. “Our goals are clear: Build a sustainable, net zero, resilient, and equitable world; better align investment with sustainable development; and act on our commitments – with credible timelines, targets, and plans. I count on the members of the GISD Alliance to catalyze greater investment for developing countries and make net zero and sustainability the core of everyone’s policies and business models.”
Since Secretary-General Guterres convened the GISD Alliance in October 2019, its members, CEOs of 30 top global businesses, have produced standards and tools aimed at moving trillions of dollars to bridge the gap in financing needed to realize the UN’s 2030 Agenda and its Sustainable Development Goals.
GISD also has sprung into action to address crises, including in 2020 by developing a COVID Bond Call to Action, which prompted companies and governments to use innovative social bonds to respond to the pandemic, contributing to a sustainable economic recovery.
At this year’s Annual Meeting, GISD published its latest investment tool designed to align financing with sustainable development. Through analysis of existing frameworks and corporate responsibility reports, GISD has created a set of sector-specific metrics to accurately measure the impact of companies on sustainable development. The metrics will initially cover eight industries defined under MSCI’s Global Industry Classification Standard.
“Previous reporting frameworks have largely focused on measuring the impact of company operations on sustainability across industries. Industry-agnostic performance indicators, while useful, tend to fall short in capturing the full sector-specific impact of products and services that companies produce,” said Leila Fourie, GISD Co-chair and Group CEO of the Johannesburg Stock Exchange. “These new sector-specific metrics provide investors with key insights to help them align their financing with sustainable development.”
In the coming months, GISD will launch a net-zero Exchange Traded Fund (ETF) and a blended finance fund to provide opportunities for investment in sustainable infrastructure. GISD is also developing a Model Mandate, providing a menu of options to define contractual relationships between asset owners and asset managers, encouraging long-term investment aligned with sustainable development.
“With the upcoming launches of a climate ETF and a blended infrastructure fund, we are moving towards creating real life opportunities to finance the SDGs,” said Oliver Bäte, GISD Co-chair and CEO of Allianz. Allianz today wraps up its two-year term as co-chair.
In its first two years, the GISD Alliance has released other landmark deliverables, such as a common definition of Sustainable Development Investing (SDI) that provides the minimum thresholds that investment strategies should meet to qualify as aligned with sustainable development and a report entitled Renewed, Recharged, and Reinforced with more than 60 recommendations for global action to scale-up investment in the SDGs.
The SDG Navigator is an online tool that provides a structured overview of sustainable development finance initiatives. In addition, in collaboration with the United Nations Development Programme (UNDP), GISD launched the innovative SDG Investment Platform earlier this year, a digital portal that merges economic, demographic financial and project data, enabling investors to easily research opportunities in developing markets.
GISD is working with the G20 Sustainable Finance Working Group, the COP 26 climate conference bureau and G7, as well as engaging with the multilateral development banks, to develop actionable recommendations on ways to scale up private investment for sustainable development.