New report shows huge investment gap for meeting Sustainable Development Goals (SDGs) in Emerging Markets and Developing Countries (EMDCs)
November 30, 2023 (Toronto) – A new Investor Leadership Network-led report calls for the public sector to work more collaboratively with private investors to fight climate change and deliver on SDGs. The report calls on heads of state, policymakers, and multilateral development bank (MDB) officials, to act.
Amy Hepburn, CEO of Investor Leadership Network, says, “We can no longer overlook the role of public-private partnership in driving positive impact in climate change and sustainable development. We need investors at the table early to co-create solutions.”
ILN members provide opportunities for private capital to collaborate and leverage leadership in the global marketplace, without having to compromise fiduciary responsibilities. The aim is to unlock capital for projects that align with the Paris Agreement and UN Sustainable Development Goals in emerging markets.
Some of the key recommendations of the report include:
- There are three key impediments to significantly increasing private capital mobilization: inadequate project pipelines, risks too high relative to returns, and data limitations.
- To improve bankable deal flow, organizations behind the document recommend streamlining existing and boosting new project pipeline facilities. They call on MDBs to engage the private sector earlier in project lifestyles, enable private sector access to project preparation facilities, and expand policy assistance to governments and support country platforms.
- To address longstanding risks and investment barriers, signatories recommend for public institutions expand the quantum, quality, availability, and accessibility of instruments that enable appropriate and effective risk management and mitigation. By aggregating catalytic capital from multiple sources, synergies and efficiencies can be leveraged. It would also be essential that MDBs make private capital mobilization (PCM) a central objective of their operations, establishing ambitious targets for increasing the PCM ratio.
- To ensure “additionality” of MDB financing, institutional investors call for MDBs to move to an originate-and-distribute model (where appropriate), increase the use of demand driven standard-form guarantees, and work collaboratively in the context of country platforms.
- To improve data transparency and risk assessments, MDBs should: work more closely with rating agencies to correctly assess risk in EMDCs; ensure uniformity in assessing risk across MDBs; enable enhanced and speedy access to the Global Emerging Markets Risk Database, transforming it into an effective asset allocation tool; and explore working with regulators and standard setters to ensure capital requirements reflect actual risk profiles.
Read the full report and the call to action: link
About Investor Leadership Network (ILN):
The Investor Leadership Network was launched at the 2018 G7 to facilitate and accelerate collaboration by leading institutional investors to drive the transition to a sustainable and inclusive global economy. As the leading network of investors acting for people, planet and prosperity, the CEO-led group is composed of 14 global institutional investors representative of seven countries, with over US$10 trillion in assets under management.
Operating as an open and collaborative platform, members pool resources, expertise, and networks to develop, promote and deliver action-based and scalable initiatives on major global issues such as climate change; equality, diversity, and inclusion; and private capital mobilization. Every initiative is evidence-based, measurable, and drives macro change. Member commitment is leveraged through a central convening body, the Secretariat, which threads the needle among initiatives and tracks and reports impact.
Contact: Steve Kee, Global Communications Director, Investor Leadership Network, steve@investorleadershipnetwork.org, 416-841-5669.