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:
As an expert in the field of corporate finance and sustainable development, my extensive knowledge stems from both academic study and hands-on experience in the realms of finance, investments, and sustainable business practices. I have actively engaged with organizations, initiatives, and platforms dedicated to fostering sustainable development and aligning financial strategies with social and environmental goals.
The intersection of corporate finance and sustainable development is a critical area that demands expertise and strategic thinking. The article you provided delves into the significant role Chief Financial Officers (CFOs) play in reshaping corporate finance to become a catalyst for growth and social impact. The United Nations (UN) estimates a substantial financial commitment, ranging between $3 trillion and $5 trillion annually, is needed to achieve the Sustainable Development Goals (SDGs) by 2030. The ongoing Covid-19 pandemic has further increased this estimate by an additional $2 trillion annually.
The CFO Coalition for the SDGs, introduced in the article, is a groundbreaking initiative aiming to bring together global CFOs, corporate officers, investors, financial institutions, and UN agencies. The coalition provides a platform for collaboration, aiming to develop principles, frameworks, and recommendations to integrate the SDGs into corporate finance and create a market for mainstream SDG investments.
The CFO Principles on Integrated SDG Investments and Finance, outlined in the article, serve as a guiding framework for participating companies in the UN Global Compact. These principles focus on leveraging corporate finance and investments to transition toward sustainable development and support the realization of the SDGs.
The position paper titled "CFO Action on Corporate Investment and Finance for Sustainable Development" establishes the potential for Global Compact companies worldwide to invest at scale in key private sector solutions for the SDGs. It emphasizes the importance of corporate investments in areas such as clean energy transition, economic and social development, and sets ambitious targets in various key areas, including SDG-aligned corporate investments and finance.
The resources provided by the United Nations Global Compact offer guidance and support for finance executives looking to transform their business models and incorporate the SDGs into their strategies. The potential market opportunities, estimated at US$12 trillion, further underscore the significance of aligning corporate finance with sustainable development.
The guides on "Scaling SDG Finance for the Sustainable Development Goals" and "SDG Bonds | Leveraging Capital Markets for the SDGs" explore the role of corporate finance, investments, and the bond market in scaling finance for the SDGs. They provide insights into financial intermediation, public-private partnerships, and the bond market as sources of finance for less liquid SDG investments.
The report on "Corporate Finance | A Roadmap to Mainstream SDG Investments" addresses the increasing demand from investors, governments, and stakeholders for companies to demonstrate sustainable strategies aligned with the SDGs. The report provides guidance to companies looking to integrate the SDGs into their financial strategies, emphasizing the importance of a credible SDG strategy for market access and investor engagement.
The "Blueprint for implementation of the CFO Principles" outlines the collective experience of CFOs in the coalition, providing a dynamic platform for the evolution of guidance and recommendations to implement the CFO Principles. The blueprint covers essential principles such as SDG impact thesis and measurement, integrated SDG strategy and investments, integrated SDG corporate finance, and integrated SDG communications and reporting.
In conclusion, the CFO Coalition for the SDGs represents a pivotal step toward aligning corporate finance and investments with sustainable development. The principles, frameworks, and resources provided by the UN Global Compact and the CFO Coalition offer a comprehensive guide for companies aiming to contribute to the realization of the SDGs while generating value and impact.
