A network of financial institutions, capital markets participants and industry stakeholders have formed the Impact Disclosure Taskforce to establish voluntary guidance, helping corporate entities and sovereigns to measure and disclose their efforts to reduce major gaps to achieving the UN’s Sustainable Development Goals (SDGs)
According to the Taskforce – which comprises major financial institutions and industry bodies such as Amundi, Deutsche Bank, Morningstar Sustainalytics and Pictet Asset Management – achieving the SDGs requires unprecedented levels of investment, particularly in emerging markets and developing economies, estimated by the UN Conference on Trade and Development to be over $4trn per annum. However, at present, levels of investment are significantly short of hitting that target.
“Mobilising private investment toward impact-driven solutions has never been so dramatically needed to accelerate sustainable development in emerging markets and developing economies,” Caroline Le Meaux, global head of ESG research, engagement and voting at Amundi, said.
“The financial sector needs to accompany corporates and sovereigns facing the largest gaps towards achieving the SDGs, advising them on how they can set targets and report on them to be able to tap sustainable pools of capital. Amundi is proud to be part of the Impact Disclosure Taskforce, supporting the emergence of global standards for managing impact investments and going further in our commitment to promoting transparency and accountability.”
Given that corporate entities and sovereigns in jurisdictions with the most significant development gaps often lack the disclosures necessary to access pools of private sustainable capital, the Taskforce has set out voluntary guidance that draws on existing resources to help entities set targets that specify their intentions for incremental contributions towards addressing the development challenges that are most relevant to their local context. The guidance will also help them monitor and report their progress against such targets.
The Taskforce also intends to explore mechanisms for disseminating and analysing this entity-level impact information to promote transparency and accountability. Entities that apply the guidance would provide helpful data required for investment decisions, thus making their entire balance sheet more attractive to sustainable financiers. While the guidance can be used by corporate entities and sovereigns of all jurisdictions, it is primarily designed for entities that operate in economies facing the largest SDG gaps and in jurisdictions without regulatory guidance for sustainability disclosures.
“The asset management industry has a key role to play in closing the SDG financing gap and allocating capital to where it is most needed,” said Robert Simpson, head of emerging markets strategy and solutions at Pictet Asset Management.
“With improved levels of disclosure, clarity on development priorities, and ongoing assessment, investors can allocate with greater confidence towards emerging markets and companies operating within them, investing beyond ESG labelled bonds.”
The Taskforce aims to complete the guidance for public consultation in April 2024.