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 DEVELOPMENTThe 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). |
Resources
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$12 trillion in market opportunities.
| | Scaling SDG Finance for the Sustainable Development GoalsThis guide explores the role of corporate finance and investments in scaling finance for the Sustainable Development Goals, including how FDI, financial intermediation and public-private partnerships can be a source of finance for less liquid SDG investments that cannot be invested directly by portfolio or institutional investors. This includes providing access to finance in countries with less developed financial markets or for SDG solutions that are too small or illiquid to attract portfolio investors. |
| | SDG Bonds | Leveraging Capital Markets for the SDGsThis guide explores the role of the bond market – the largest asset class in the global financial markets – in the realization of the Sustainable Development Goals (SDGs). With US$ 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 InvestmentsInvestors, 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.
| Principle 1: SDG impact thesis & | Principle 2: Integrated SDG strategy | Principle 3: Integrated SDG corporate | Principle 4: Integrated SDG communications |
Upcoming Events
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'm an expert in corporate finance and sustainable investments with a demonstrated depth of knowledge in the field. Over the years, I've closely followed global initiatives aimed at integrating Sustainable Development Goals (SDGs) into corporate finance, and I've actively engaged with key platforms and organizations working towards this objective. My expertise spans from understanding the financial mechanisms behind SDG-aligned investments to the role of CFOs in driving sustainable finance strategies.
Now, let's delve into the key concepts mentioned in the article on "Corporate Finance and Investments as a Catalyst for Growth and Social Impact."
-
Sustainable Development Goals (SDGs): These are a set of 17 global goals established by the United Nations to address various social, economic, and environmental challenges. The article emphasizes the need for substantial financial investments, estimating a requirement of $3 trillion to $5 trillion annually to meet the SDGs by 2030, with an additional $2 trillion due to the impact of the Covid-19 pandemic.
-
CFOs and Corporate Finance: Chief Financial Officers (CFOs) play a critical role in reshaping the future of corporate finance to become a catalyst for growth, value creation, and social impact. The article outlines the establishment of the CFO Coalition for the SDGs, which is the first UN initiative targeting CFOs worldwide. The coalition aims to develop principles, frameworks, and recommendations to integrate SDGs into corporate finance.
-
CFO Principles on Integrated SDG Investments and Finance: The CFO Coalition for the SDGs has introduced four principles to guide participating companies in transitioning to sustainable development. These principles focus on leveraging corporate finance and investments to contribute to the realization of the SDGs.
-
Position Paper on Corporate Investment and Finance for Sustainable Development: This paper aims to establish the potential for global companies to invest at scale in key private sector solutions for the SDGs. It provides intellectual support for a call to action to set ambitious targets in areas such as SDG-aligned corporate investments and finance.
-
Guides on Scaling SDG Finance and SDG Bonds: These resources explore the role of corporate finance and investments, including foreign direct investment (FDI), financial intermediation, and public-private partnerships, in scaling finance for the SDGs. They also emphasize the role of the bond market in providing a reliable and scalable source of capital for SDG initiatives.
-
Corporate Finance Roadmap for Mainstream SDG Investments: The report provides guidance to companies looking to integrate the SDGs into their financial strategy and business model. It emphasizes the importance of a credible SDG strategy for attracting SDG financing.
-
Blueprint for Implementation of CFO Principles: The CFO Coalition has committed to developing guidance and recommendations to implement the CFO Principles. The blueprint represents collective experience and understanding of the underlying concepts related to SDG impact thesis and measurement, integrated SDG strategy and investments, integrated SDG corporate finance, and integrated SDG communications & reporting.
-
Upcoming Events: The article mentions upcoming events, such as the UN Global Compact Academy Session and the UN Global Compact Leaders Summit, which provide opportunities for further engagement and collaboration on SDG investments.
In conclusion, the integration of SDGs into corporate finance and investments is a complex but crucial endeavor, and the mentioned initiatives and resources aim to guide companies and CFOs in making impactful contributions towards sustainable development.
