Unlocking Early-Stage Financing for SDG Partnerships

Foreword by Ani Dasgupta

The Sustainable Development Goals and Paris Agreement have given the world direction and ambition to reduce hunger, end poverty, protect nature, and align on a 1.5° C climate pathway. But the fact is, the financial support meant to make this sweeping transition a reality is simply not enough. The current estimated SDG financing gap—the difference between what is needed and what is committed—is $4.2 trillion a year, according to the OECD. Filling that yawning gap will require imagination, innovation, and particularly partnership, because no one entity can do it alone. As the United Nations put it so bluntly: “Every company, every financial firm, every bank, insurer and investor will need to change.”

Those companies, financial firms, banks, insurers, and investors may hold the key to the solution, and the potential to prosper as a result. While insufficient funds have been committed to the SDGs and the Paris climate goals, the money is there, with institutional asset owners holding over $100 trillion. So far, though, business-as-usual investments have captured the lion’s share of these funds, as they seek to minimize risk but miss out on potentially huge rewards.

There is a better way.

All financial players must make the transition to a sustainable economy and prioritize impact over financial returns. SDG-focused partnerships between companies, governments, and civil society actors that are seeking transformative change offer a clear path forward and an exciting investment opportunity. These partnerships are set up uniquely to remove market barriers and scale innovative business models with a real potential for change. At the World Resources Institute, we recognize collaboration as a key ingredient for success; it is also a driving force behind several of our partnerships and platforms, especially the P4G platform (Partnering for Green Growth and the Global Goals), which provides technical and financial assistance to SDG partnerships.

These partnerships can work to help meet the SDGs. However, one of their biggest challenges is delivering financing to all stages of project development. Grants often fund the initial stages of projects and commercial investment takes over at the end, but financing for the transitory phase between the two is essential if these important projects are to survive and thrive.

In this report, WRI and P4G, together with the Global Impact Investing Network (the GIIN), examine this lack of funding at a crucial phase of development and suggest innovative financing approaches that prioritize innovation and impact to deliver rewards to all partners.

Investors can use this report to understand how to better support SDG partnerships and build a strong pipeline of projects for investment, while partnerships can use it to help reduce perceived risk and attract more funding. When partners have the vision to act boldly, the returns—economic, developmental, and environmental—can be tremendous.

Ani Dasgupta

President & CEO


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