Are the SDGs beyond reach?

It is clear that the success of the SDGs hinges on channelling business and finance towards economic, environmental, and social impacts. However, it is estimated that investments of at least $5-7tn will be needed annually to finance the SDGs, of which private finance sources are an essential component. Current financing models are unlikely to be sufficient to bridge the financing gap before 2030. More innovative and practical ways should be identified to help push the limitations of current thinking and overcome the current inadequacies.

Impacts can be used as a starting point for business models

Impact-based business models that aim to achieve as many impacts as possible through each investment, have the potential to generate both social and financial gains. These models should also serve to mitigate impact and digital risks, while reducing costs. Altogether, these models can play a key role in increasing the effectiveness and efficiency of financing the SDGs, especially in less developed economies.

On its impact journey, the finance sector needs to embrace holistic impact analysis

The finance sector has to improve its capacity for impact analysis to facilitate the transition to an impact-based economy. Frameworks such as the Principles for Positive Impact provide a meta-framework with a holistic definition of impact to promote convergence among the growing body of impact methodologies and standards. Impact analysis and management need to be more holistic to align with both the policy developments and the expectations of stakeholders on impact activities.

A call to action: Towards an impact ecosystem

To accelerate positive impact and achieve the SDGs, progress needs to be made in diversifying supply and demand for finance, while further developing impact metrics. This paper concludes that we need to bridge the gap between investors, policymakers, and solution-makers and strengthen collaboration among them.

Appendix: SDG investment needs, financial flows, and the financing gap

The report identifies existing data on public and private financial flows to understand investment needs, flows, and financing gaps for the SDGs. It is essential to have a complete understanding of the data landscape to identify the gaps and create solutions to bridge them. The report hypothesises and assumes several key findings to aggregate existing figures, aiming to bridge the gap more accurately.

Overall, the report concludes that previous sector-focused policy-making or a goal-by-goal approach is insufficient to achieve the SDGs. Instead, stronger integrated planning, strategic thinking, and policy integration are crucial in identifying the best SDG implementation mix at the local level. The finance sector has a significant strategic interest in ensuring positive social, environmental, and economic impacts, and it should embrace holistic impact analysis to facilitate the transition to an impact-based economy.