March 11, Beijing – Since countries around the world adopted the 2030 Agenda for Sustainable Development in 2015, the 17 Sustainable Development Goals (SDGs) have become a unifying framework to meet economic prosperity, social inclusion and environmental sustainability.
However, a major challenge in achieving the SDGs is figuring out how to finance them. Globally, the delivery of the SDGs requires investment of between US$5-7trillion annually, the majority of which is in developing countries. Indeed, while China has made great achievements in poverty reduction over the last 4 decades, lifting more than 800 million people out of poverty and contributing 70 percent of the world's poverty reduction, the multi-dimensional problems of poverty and inequality have not been completely solved. Currently, investment in social projects is generally considered challenging due to the difficulty of balancing social benefits with financial returns, and there is no uniform approach or standard to measure the impacts and internalize the externalities of such projects.
In order to address this challenge and enable stakeholders to reach consensus on the potential of financing for the SDGs, UNDP and the China International Center for Economic and Technical Exchanges (CICETE) have joined forces to establish an SDG Financing Platform (policy research and dialogue) promoting the development and expansion of sustainable finance in China. The platform’s aim is to develop operational guidelines and principles for sustainable development financing, and to eventually put forward an SDG impact evaluation standard, together with a regulatory framework and policy suggestions. As a unique first, the platform brings together investors, regulators, issuers and verifiers to discuss aligning multiple standards to address a key challenge of rating SDG Bonds: making it attractive for investors.
At the advisory meeting held on March 4th, more than 20 participants including thought-leaders and experts from government think-tanks and universities, senior professionals from the financial sector, and enterprise representatives took part in wide-ranging discussion on topics related to financing for the SDGs in China. Agi Veres, UNDP Resident Representative in China stated, “This project is an important initiative, in China and abroad. Our goal is to provide global public goods that will benefit more people, and allow other countries to leverage our innovative practices in China to inform on their efforts in designing a conducive policy environment and innovating financial instruments for the SDGs.” Zhang Yi, Deputy Director General of CICETE, confirmed this global agenda saying, “This project will not only promote China's sustainable development, but also explore feasible paths and successful operational models for the sustainable development of the world, and thus further expand and better engage global partners.”
On March 7th, an SDG financing workshop was held with over 100 participants from the development and finance sectors. Ma Weihua, chairman of the China Alliance of Social Value Investment (CSVI), board member of the China Global Philanthropy Institute (CGPI), and chair of the Advisory Committee of this project, spoke at the event. “We are now promoting the concept of sustainable finance including the concept of impact investment,” he said. “We need to enable and realize more impact investment through the formulation of standards and the construction of financial intermediaries.”