A shift of only 3.7per cent of the $100 trillion of assets held globally by institutional investors towards sustainable activities in developing countries would be sufficient to fill the $3.7 trillion yearly global Sustainable Development Goal (SDG) financing gap, African Venture Philanthropy Alliance (AVPA) and the United Nations Development Programme (UNDP) have said.
They said the impact of the COVID-19 pandemic was felt hard in Africa: the continent’s gross domestic product (GDP) slumped by 2.1per cent per capita leading to the worst recession in 50 years. An estimated 20 million jobs were lost in 2020 alone, pushing up to 40 million people into extreme poverty. This is over and above the pre-COVID-19 annual SDG financing gap estimated at between $500 billion – $1.2 trillion. In Africa, COVID-19 recovery is estimated to cost $153 billion. Currently, these financing needs cannot be met as the continent’s traditional sources of social investments, aid and government funding are declining and under pressure.
This, they said, makes it imperative to broaden the funding base to include private financial and capital markets in a way that fosters the growth of fair, inclusive, and sustainable economies.
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To close this gap, a pan-African network of social investors collaborating to mobilise and deploy capital for impact, AVPA, and the UNDP, through its Africa Sustainable Finance Hub (ASFH) and the flagship initiative SDG Impact, have partnered to promote sustainable finance in Africa. The collaboration will support the African private sector to contribute to the SDGs and the African Union (AU) Agenda 2063. The collaboration kicks off with an SDG Impact Standards User Training for African Corporates.
Speaking on the initiative, CEO of AVPA, Dr Frank Aswani, said: “The AVPA-UNDP partnership engages corporate and industry leaders to raise awareness and facilitate understanding and practical skills about managing for impact and integrating sustainability at the core of decision-making practices through a common language.’’
This will address a systemic gap in the market that hampers impact measurement and management practices from going beyond reporting to decision making and recognizing the business case for the SDGs adoption amongst African corporates.”
Manager, UNDP Africa Sustainable Finance Hub and Resident Representative for UNDP, South Africa, Dr Ayodele Odusola, said: “UNDP’s SDG Impact Standards are a ‘best practice’ guide for enterprises and investors to operate more sustainably and optimise their contribution to the SDGs. Our partnership with AVPA will provide the African private sector with a framework for integrating responsible business and impact management practices into their strategy, organisational systems and internal decision-making to optimise interrelated economic, social and environmental impacts.”
AVPA and UNDP will also leverage the UNDP’s SDG Investor Maps to showcase and analyse African SDG investment opportunities that will help shift the assets of corporate and private investors into SDGs. The UNDP’s SDG Investor Maps is a market intelligence tool which aims to direct capital to the emerging markets where SDG priorities, government policy and market opportunity converge. The SDG Investor Maps are housed digitally on the SDG Investor Platform, and also serve as the foundation to engage policymakers to support an enabling environment for SDG Investment across Africa.
