The implementation of UN Sustainable Development Goals (SDGs) involves large amounts of finance. While there are adequate funds available globally, only a small part of the international investments are currently targeted towards meeting these goals. The challenge lies in putting the money in the right direction to achieve the sustainability agenda.
To address this challenge, about 20 leading global banks and investors, totaling $6.6 trillion in assets, have launched a UN-backed global framework aimed at channeling the funds they manage towards clean, low carbon and inclusive projects.
The standards called “The Principles of Positive Impact Finance,” are a first of its kind set of criteria for investments to be considered sustainable. The standards will provide financiers and investors with a global framework applicable across their different business lines, including retail and wholesale lending, corporate and investment lending and asset management.
According to Eric Usher, the head of the UN Environment Finance Initiative, achieving the SDGs is expected to cost $5 to $7 trillion every year through 2030. The Positive Impact Principles are a game changer, which will help to channel the hundreds of trillions of dollars managed by banks and investors towards sustainable projects.
The Principles provide guidance for financiers and investors to analyze, monitor and disclose the social, environmental and economic impacts of the financial products and services they deliver.
Deputy CEO of Société Générale, Séverin Cabannes, said that with global challenges such as climate change, population growth and resource scarcity accelerating, there is an increased urgency for the finance sector both to adapt and to help bring about the necessary changes in our economic and business models. The Principles for Positive Impact Finance provide an ambitious yet practical framework to help meet the deeply complex and interconnected challenges of today.
The Principles were developed by the Positive Impact Working Group, a group of UN Environment Finance Initiative banking and investment members, as part of the implementation of the roadmap outlined in the Positive Impact Manifesto released in October 2015.
The Positive Impact Working Group currently includes: Australian Ethical, Banco Itaú, BNP Paribas, BMCE Bank of Africa, Caisse des Dépôts Group, Desjardins Group, First Rand, Hermes Investment Management, ING, Mirova, NedBank, Pax World, Piraeus Bank, SEB, Société Générale, Standard Bank, Triodos Bank, Westpac and YES Bank.