IMPACT INVESTING AND SDG 2030

Do we have the capacity to overcome the financing gap which exists in order to complete the SDGs?

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Why do you think Impact Investment is increasingly relevant in today’s economic setting as a method of deploying finance with double or triple bottom line objectives?

Investment must adopt a long-term vision and allow for solutions to bloom. We have lost the essential meaning of investment, which has become volatile and focused on the short-term through speculation. For instance, in the 19th Century, private investors financed the railroad network in the United Sated, responding to the need for transportation across the continent. Now, we must face the major challenges of feeding a rapidly expanding population, Climate change and large-scale migrations. Solutions exist, entrepreneurs reinvent goods and services to address the social and environmental needs of the future. Supporting these solutions lies at the heart of Impact Investing.

It is going to be increasingly difficult for a company not to operate in a sustainable way, either due to the demands of consumers, or the imposition of regulation. In the near future, business will need to be sustainable in order to be profitable; but sustainability also comes with profitability and the ability to attract private investors. These two notions - sustainability and profits - are closely interlinked and soon will be embedded in any form of investment.

Does impact investment have the capacity to overcome the financing gap which exists in order to complete the Sustainable Development Goals (SDGs)?

The development of Impact Investment puts forward solutions to the inadequate distribution of wealth and thus essentially supports the implementation of the SDGs globally.

If we look at the numbers, we have on one side approximately USD 70 billion invested through Impact Investment, microfinance included. On the other hand, USD 70 trillion are managed by fiduciaries, while the amount necessary for the realisation of the SDGs is approximately USD 3 trillion annually. If we were to invest 3% to 5% of the portfolios managed by fiduciaries in response to the great challenges of our time, we would quickly reach the allocation needed to realise the 2030 agenda...