Thinking beyond the 2030 Agenda for Sustainable development and achieving the SDGs
Last month I attended the 74th session of the United Nations General Assembly (UNGA), which brought together world leaders and the most prominent members of the global private sector to discuss some of the world’s most pressing issues. In addition to calls for faster progress toward achieving the Global Goals, leaders promised to deliver a better future for people and our planet.
We are at the four-year mark of the adoption of the 2030 Agenda for Sustainable Development. Actions taken over the last four years have produced results, but far more needs to be done to tackle conflict, climate change, health care, poverty, and other concerns, to ensure we achieve the Goals and leave no one behind.
Session after session increased my conviction that impact investing must be part of the equation – a vehicle to be made available by governments, civil society and the private sector to all stakeholders in order to achieve the goals. Impact investments provide capital to address social and/or environmental issues, while also realizing commercial returns. Impact investors seek to place capital in businesses, supporting industries such as renewable energy, microfinance and sustainable agriculture, as well as basic services including housing, healthcare, and education.
By focusing on both the social and financial merits of an investee, impact investors enable the building of sustainable companies that are able to operate as going concerns. These companies can continue to benefit all stakeholders (shareholders, customers, employees, and surrounding communities) over the long term, without the need for concessional or grant financing.
As an illustrative example, a juice company that purchases fruit from local farmers as opposed to importing concentrates might benefit from lower operating costs as well as less exposure to foreign currency exchange risk. An investment in the company that would allow for capacity expansion would also create a more reliable source of income for farmers. With their increased revenues, the farmers could invest more in fertilizers, thereby enhancing their yields and creating a more reliable source of raw materials for the juice manufacturer, allowing it to grow, introduce new products, or pay dividends to its shareholders. A positive feedback loop such as this is the ideal outcome of an impact investment.
Thinking beyond the 2030 Agenda for Sustainable development and achieving the SDGs, impact investing can continue to deliver on its mission of doing well by doing good. As financiers and trusted advisors, institutions like EFG Hermes are able to take the initiative to introduce more socially-minded investment products to our clients. For example, there will always be a need for social and affordable housing, which is one of the key sectors where investors can make a difference. By structuring investments in housing developments for those people and communities that need it most, we can help create positive social benefits, while also achieving healthy financial returns for investors.
Most importantly, we must remember that no institution can act alone. Partnerships between governments, the private sector, and civil society are needed to mobilize long-term investments – including foreign direct investment – and deliver transformational projects which impact every member of our communities. Building these partnerships around shared values and a common vision that focus on people and the planet are the most effective way to ensuring real and measurable success.
By: Hanaa Helmy,
Head of CSR at EFG Hermes Holding, and CEO of the EFG Hermes Foundation