The Sustainable Development Goals (SDGs) provide a roadmap to address the world’s most critical sustainability challenges. Achieving the SDGs requires shifting of substantial capital from the public, private, social, and multilateral sectors. Despite growing interest in sustainable finance, private investments to achieve the SDGs remain insufficient. This report focused on the identification of incentives for private sector investors to promote long-term investments aligned with the SDGs.
The report began with a summary of the trends in private and sustainable investments, and the challenges faced by institutional investors and companies when investing in sustainable development. Next, the report presented a roadmap for multi-stakeholder consultations to discuss proposed solutions to incentivize long-term investments aligned with the SDGs. The consultations were structured by groups of stakeholders. For each of these forums, specific topics were addressed in the search for solutions to shift long-term investments towards financing sustainable development are highlighted. The consultations included:
- A group of public pension funds and sovereign wealth funds to assess issues related to fiduciary duty, strategies to engage in companies’ long-term and sustainable investments as well as potential mechanisms to solve the agency problem between asset owners and managers.
- A group of companies and corporations to identify strategies to promote engagement of shareholders, and alternatives to align executive compensation with sustainable value creation.
- A broader set of stakeholders, including institutional investors, companies, capital markets intermediaries and regulators, to explore solutions to the challenges imposed by current financial reporting practices and advance the standardization of reporting for sustainable investments.