Tue, Oct 19, 2021 7:08 PM
By EDITH M. LEDERER, Associated Press
UNITED NATIONS (AP) — Thirty top business leaders are seeking to encourage private investment to help the U.N. achieve development goals for 2030, including tackling climate change, preserving the environment, ending poverty, promoting economic growth, and improving health care and education.
U.N. Secretary-General Antonio Guterres, who launched the Global Investors for Sustainable Development Alliance two years ago, said at a virtual meeting Tuesday that he is counting on the group “to catalyze greater investment for developing countries and make net-zero (carbon emissions) and sustainability the core of everyone’s policies and business models.”
Since its inception, the alliance of business leaders says, it has worked with the U.N. and other partners to develop standards, tools and products to draw long-term investment into sustainable development.
The U.N.’s chief economist, Elliott Harris, said at a news conference after Tuesday’s virtual meeting that there has long been a perception that traditional investments “will generate more of a financial return than a sustainable investment.”
“Increasingly, that is no longer true,” he argued. “Sustainable investments do generate very healthy financial returns and have the advantage of the longer-term contribution to enhance greater sustainability.”
Harris said one of the important aspects of the work the alliance is doing is "the fact that we’re not asking people to go off and do something that is against their own interest,” but rather persuading them that there is no financial disadvantage and that such investments contribute “to a more sustainable future.”
What is also important, he said, is that stock exchanges are putting out evidence that the return on sustainable investments is comparable.
The co-chair of the group, Leila Fourie, who is Group CEO of the Johannesburg Stock Exchange, said the group's underlying goal is to address the obstacles to shifting much larger sums of money to achieving the U.N. goals.
“We are seeing tremendous interest by investors in products that adequately channel finance explicitly either to green, blue or social ends,” she said, referring to green investments to preserve the environment and address global warming, blue investments to preserve the world’s waterways and save the oceans, and social investments to fund social initiatives to tackle a host of issues including responding to the COVID-19 pandemic.
Fourie said she is launching blue, green and social bonds, “and we are also about to launch a transition bond” to enable companies that are fossil fuel intensive to transition to a more green environment.
On the Johannesburg exchange, “our social bond index has beaten our benchmark indices in returns that it offers the last three years,” she said.
New data has also shown “that sustainable companies are less subject to sharp shocks and dislocations as a result, for example, of oil spills or regulatory fines,” Fourie said.
Over the past two years, the alliance said, it established a web-based platform to enable investors to identify opportunities in developing markets that support sustainable development and a navigator to enable users to align their business activities with the U.N. goals. It has also issued more than 60 recommendations for scaling up investment in the goals.
Alliance co-chair Oliver Bate, CEO of Germany’s Allianz SE, said that with the upcoming launch of a net-zero climate exchange-traded fund and a blended finance fund to invest in sustainable infrastructure “we are moving towards creating real life opportunities to finance" the U.N. goals.
The business leaders in the alliance come from about 24 countries around the world and include corporations, big institutional investors, stock exchanges and commercial banks, and technology, energy and manufacturing.
Among them are the CEOs of Citigroup and Bank of America in the U.S., UBS Group in Switzerland, Aware Super in Australia, CIMB in Malaysia, Infosys in India and Pal Pensions in Nigeria as well as the chairs of the Agricultural Bank of China, Emirates Environmental Group and SulAmerica in Brazil, and the presidents of the Government Pension Investment Fund of Japan and Mexico’s Consejo Mexicano de Negocios.