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:
Introduction
As an expert in corporate finance and investments, I have extensive knowledge and experience in the field. I have studied the principles and frameworks that guide sustainable finance and have a deep understanding of the role of Chief Financial Officers (CFOs) in driving growth, value creation, and social impact. My expertise is supported by various sources, including the United Nations Global Compact, which has been at the forefront of sustainable finance initiatives for the past decade I am familiar with the concepts and principles discussed in the article you provided and can provide further information on each of them.
Sustainable Development Goals (SDGs) and Corporate Finance
The Sustainable Development Goals (SDGs) are a set of global objectives established by the United Nations to address social, economic, and environmental challenges. To achieve these goals, it is estimated that the world will need to spend between $3 trillion and $5 trillion annually by 2030 The ongoing Covid-19 pandemic has further increased this estimate by an additional $2 trillion annually.
CFOs play a critical role in reshaping the future of corporate finance and investment to act as 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 goals and to build on existing sustainable finance solutions and frameworks.
CFO Coalition for the SDGs
The CFO Coalition for the SDGs is the first UN initiative to target Chief Financial Officers worldwide. It provides a platform for global CFOs and other corporate officers to collaborate with peers, investors, financial institutions, and UN agencies. The coalition aims to develop principles, frameworks, and recommendations to integrate the SDGs in corporate finance and create a market for mainstream SDG investments .
CFO Principles on Integrated SDG Investments and Finance
The CFO Coalition for the SDGs has established four principles to integrate Sustainable Development in Corporate Investments and Finance. These principles support companies in their transition to sustainable development and leverage corporate finance and investments to realize the SDGs .
- SDG impact thesis & measurement: This principle focuses on establishing a clear impact thesis and developing robust measurement frameworks to track progress towards the SDGs.
- Integrated SDG strategy and investments: Companies are encouraged to integrate the SDGs into their financial strategy and business model. This principle emphasizes the importance of aligning investments with the SDGs and considering their impact on sustainable development.
- Integrated SDG corporate finance: This principle highlights the need for CFOs to incorporate the SDGs into their decision-making processes and financial planning. It encourages the integration of sustainability considerations into financial practices.
- Integrated SDG communications & reporting: Companies are encouraged to communicate their SDG-related efforts transparently and report on their progress. This principle emphasizes the importance of accountability and stakeholder engagement.
Resources for Corporate Finance and SDGs
The United Nations Global Compact provides guidance and resources for finance executives looking to transform their business models and incorporate the SDGs. These resources help finance professionals understand the potential market opportunities, estimated at US$12 trillion, that can be unlocked by aligning with the SDGs .
Additionally, there are guides available that explore the role of corporate finance and investments in scaling finance for the SDGs. These guides discuss topics such as leveraging capital markets for the SDGs through SDG bonds and integrating the SDGs into financial strategies and business models.
Conclusion
Corporate finance and investments have the potential to act as catalysts for growth, value creation, and social impact. By aligning with the Sustainable Development Goals (SDGs), companies can contribute to sustainable development while also unlocking market opportunities. The CFO Coalition for the SDGs and the CFO Principles on Integrated SDG Investments and Finance provide a framework for CFOs to integrate the SDGs into their decision-making processes and financial planning. The United Nations Global Compact offers resources and guidance to support finance executives in transforming their business models and incorporating the SDGs.
