20 leading global banks and the United Nations have initiated a global framework dedicated to sustainable finance. $6.6 trillion in assets has been dedicated towards clean, low carbon projects. In September 2015, the UN General Assembly formally established 17 Sustainable Development Goals to be addressed by 2030. This effectively provided a common framework for public and private stakeholders to set their agendas and define their policies and strategies over the next 15 years. $5-7 trillion a year until 2030 are needed to realise the SDGs worldwide, including investments into infrastructure, clean energy, water and sanitation and agriculture.
The United Nations Environment Programme – Finance Initiative is a partnership between United Nations Environment Programme and the global financial sector created in the context of the 1992 Earth Summit with a mission to promote sustainable finance. Over 200 financial institutions, including banks, insurers and investors, work with UNEP to understand today’s environmental challenges, why they matter to finance, and how to actively participate in addressing them.
The greater part of the necessary financing and investment will need to stem from private finance. Yet for the SDGs to be met and to address the challenges they embody in due time, they must attract the trillions of dollars of mainstream finance. By seeking a holistic understanding of the environmental, social and economic needs around us, new business models can be developed that will deliver the impacts sought by the SDGs. These new business models will need to be sufficiently disruptive to dramatically reduce the cost of achieving the SDGs.
To achieve the shift to an impact-based business and financing paradigm, a major challenge needs to be addressed. There is an absence of a common language for the finance and private sector to understand and organize itself in relation to the 17 SDGs and their respective targets.
“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,” said Deputy Chief Executive Officer of Société Générale, Séverin Cabannes.
“The Principles for Positive Impact Finance provide an ambitious yet practical framework by which we can take the broader angle view we need to meet the deeply complex and interconnected challenges of our time,” he added.
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.
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