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United Nations convenes SDG-focused investor group inspired by Swedish initiative

Group to create framework for investments aligned with the SDGs

The United Nations has established a network of investors to mobilise capital towards the estimated $90trn worth of investments required to meet the ambitions of the Sustainable Development Goals (SDGs).

The new body is called the Global Investors for Sustainable Development (GISD) and it is being coordinated by the UN’s Department of Economic and Social Affairs, the UN body whose new High-Level Advisory Board (HLAB) includes leading public policy figures such as Jeffrey Sachs and Joseph Stiglitz and political leaders such as Mexico’s Ernesto Zedillo.

The new GISD group will serve as a platform to scale up investments through knowledge transfer and partnerships, in addition to reviewing policy to eliminate obstacles to sustainable finance.

GISD is also to come up with a framework to define standards for SDG-aligned investments. This is seen as complementing the European Union’s ongoing efforts to devise a sustainable finance taxonomy for “green” investments.

Research released today (April 17) from HSBC said that, year-to-date, there has been $17bn equivalent of social and sustainability bonds issued, up 93.3% year-on-year, boosted by the SDGs

“At this pace of supply we are in line for around $60bn of social and sustainability supply for 2019,” it said.

According to a statement, GISD aims to replicate the success of the Swedish Investors for Sustainable Development (SISD) – a partnership of 18 institutional investors including most of the AP funds, SEB, Alecta and Swedbank Robur – which was coordinated by the Swedish International Development Cooperation Agency (Sida).

SISD members “work side by side with a development agency” on development issues and investment opportunities, and are encouraged to participate in “voluntary projects” and work collaboratively on learning and the sharing of best practices.

Last year, four members made a joint SEK2.5bn (€0.24bn) investment in World Bank bonds aligned with SDG 11 – Sustainable cities. Aside from this, other investments have been made in green and blue bonds, and Agenda 2030 -aligned bonds.In the first year, the 18 members of the SISD will have a seat on the GISD steering committee. Jens Henriksson, CEO of Swedish insurance group Folksam has been appointed the Swedish network’s first representative and Richard Gröttheim, CEO of AP7, his alternate.

“Even though we are all competitors, we have found a model which allows us to work together”

Gröttheim told RI: “We are pleased that SISD is being used as an example for this new initiative. Even though we are all competitors, we have found a model which allows us to work together, from CEO level, down to the specific working groups and it would be excellent if we could share some of our experiences with the GISD.”

Carin Jämtin, Director General of Sida said: “The success of SISD is due to the focused working groups and strong involvement from the Swedish investors at CEO level, and we will push for that in the GISD.”

SISD has six thematically distinct working groups looking at various SDGs. They are: SDG 5, gender equality; SDG 6 – clean water and sanitation; SDG 8 – decent work and economic growth; SDG 11 – sustainable cities; and SDG 16 – Peace, justice and strong communities, and investment opportunities and obstacles in sustainable development.

Folksam’s Henriksson said: “Some people say there is a conflict between sustainability and returns. In fact, for us it is the opposite. We see sustainable investing as a way of achieving good financial returns, while delivering the SDGs.”

The UN-backed Principles for Responsible Investment was also involved in the setting up of GISD. While conceding investor frustration over too many competing “new things” in the market, a GISD member said that both organisations would complement and build on each other’s achievements.