SDG Bonds & Corporate Finance. A Roadmap to Mainstream Investments

According to the UN Commission on Trade and Development (UNCTAD), achieving the SDGs will require between US$3 trillion and US$5 trillion in investment annually in developing countries alone. At today’s level of public and private investment, the Commission estimates an annual shortfall of about US$2.5 trillion. While additional public funds will be necessary to finance the SDGs, it is widely acknowledged in the international community that the capital markets can play a key role in closing the financing gap.

According to some estimates, implementation of the goals will open market opportunities reaching trillions of dollars, creating a significant pipeline of investment opportunities. The Business Commission for Sustainable Development finds in its flagship report, Better Business, Better World, that the SDGs provide the private sector with a new growth strategy that opens valuable market opportunities. It identifies 60 sustainable and inclusive market “hotspots” in four key economic sectors that are worth at least US$12 trillion: Energy US$4.3 trillion, Cities US$3.7 trillion, Food andAgriculture US$2.3 trillion, and Health and Well-Being US$1.8 trillion.

Keywordsinvestment economic aspects, SDGs targets, private sector, financial incentives