The UN Environment Finance Initiative’s (UNEP FI) Global Roundtable took place in Paris recently, an event dedicated to mobilising the financial sector to deliver a sustainable financial system. UNEP FI’s Positive Impact Initiative, “Rethinking Impact to finance the SDGs”, was launched, and explores avenues to closing the SDGs funding gap.
UNEP FI’s Positive Impact Initiative proposes a new approach: social, economic and environmental impacts have an as-yet under explored potential to generate financial revenues: impact-based business models can be developed, with the delivery of positive impacts as a driver of sustainable business growth and long-term enterprise value. This could be game-changing: by making it cheaper to deliver sustainability outcomes, less risky to finance and would stimulate the private sector to create new business solutions that focus on positive impacts. In fact, this shift to an impact-based economy is already under way, and the finance sector has a strategic interest in understanding impacts, not only to meet stakeholder needs, but also to capture new opportunities that support this transformation. Accordingly, it is critical for banks and investors to improve their capacity to understand and analyze impact.
UNEP FI’s Positive Impact Initiative (PI) makes these arguments in “Rethinking Impact to finance the SDGs: a position paper and call to action” – released on 26 November at UNEP FI’s 2018 Global Roundtable in Paris.
According to Ligia Noronha, Director Economy Division, UN Environment: “Rethinking Impact to Finance the SDGs” is a major contribution to solving the sustainable development puzzle. It will transform the way we think about business and finance.”
Supporting this release are several game-changing tools for impact analysis and management: The PI Impact Radar translates the SDGs into meaningful terms for business and finance. PI Model Frameworks provide guidance to apply holistic impact analysis across different financing products and asset classes, as a pragmatic application of PI’s Principles for Positive Impact Finance, for decision-making, for the development of financial products, and for the overall review of portfolios.