Analysis: Innovative Financing for the Sustainable Development Goals
By Armida Salsiah Alisjahbana
The Sustainable Development Goals (SDGs) have increasingly transformed how the private sector operates to achieve inclusive and sustainable development. Corporations are beginning to realign their priorities with the SDGs in the face of increasing pressure from consumers, investors and employees. Innovative business models such as social enterprises and inclusive businesses are emerging, which purposefully aim to address social and environmental challenges as well as provide products and services to those at the base of the economic pyramid.
The SDG-financing challenge
In order to scale up their impact, these enterprises need additional investment. Prior to the COVID-19 pandemic, it was estimated that developing countries in the Asia-Pacific region would need an additional annual investment of $1.5 trillion to achieve the SDGs by 2030.1 In a post-pandemic world, this figure is likely to be significantly higher, and private-sector investors are key to bridging this gap. If even a fraction of the $50 trillion in assets managed by the financial sector in the Asia-Pacific region were channelled towards enterprises that contribute to the SDGs, their achievement by 2030 would be within reach.2
Photo courtesy of geralt.