By Charlie Hare, Challenge Director, Business Fights Poverty
There is an estimated $2.5 trillion financing gap needed to deliver the UN’s Sustainable Development Goals (SDGs). Should the gap not be filled, it is possible that we will fail in the attempt to realise the global ambition to “end poverty and hunger, and achieve sustainable development”.
The debate around the most effective models for financing development goals has been raging for decades and will continue to do so for a long time to come. What is clear, however, is that the private sector has a significant role to play. This was recognised at the UN Third International Conference on Financing for Development in 2015, which set out a comprehensive framework for delivering on the promise of the SDG s.
The outcome document, the Addis Ababa Action Agenda, highlights the importance of “unlocking the transformative potential” of the private sector and it calls on “all businesses to apply their creativity and innovation toward solving sustainable development challenges.” In short, the Action Agenda is a clear call to action for public-private sector collaboration to deliver the SDGs and fill the financing gap required to meet them.
Of course, there is a broad spectrum of private sector involvement in development, ranging from companies investing in technology that supports low-income communities, such as Shell’s project combining solar energy and hydropower bringing light to a remote area in the Philippines, to financial institutions facilitating monetary flows to fragile states like the partnership between CDC and Standard Chartered in Sierra Leone which supported new working capital lending of up to US$50 million to businesses in Sierra Leone.
The financing gap is especially acute in the countries and regions that need it the most and yet which also find it hardest to attract investment such as fragile and conflict-affected states. Often those countries are towards the bottom of the World Bank’s Doing Business Report, which is a useful proxy for identifying countries where investing has its challenges.
There are also still some concerns over the how, the where and with what motive the private sector invests in low-income countries. Many of these concerns come from lingering suspicions held by many of the stakeholders involved in the international development ecosystem, including the private sector itself, and the lack of understanding of each other.
To help inform and advance public-private sector collaboration to finance the SDGs, Business Fights Poverty has launched a new Challenge on Investing for Impact. We will bring together different perspectives, from Challenge Supporters and Partners, and other experts to look at the ways in which current models of private sector investment in challenging places are supporting the delivery of the SDGs. It will also examine partnerships and collaborations between public and private sectors, as well as a number of innovative finance models that could be leveraged. Finally, an attempt will be made to develop a set of factors for successful investment to serve as a guide for future interventions.
The instinct to collaborate is backed by decades of study and practice, and is core to the SDGs. Collaboration allows us to take on bigger and more complex social, economic and environmental challenges. It allows us to do things that we cannot do alone. Register here for the Challenge and join our online event towards the end of June (more details to follow).
...why not join one of the many open collaboration Challenges we are running to address pressing global issues? Join your peers, share your passion and add your expertise!
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