Business giants commit resources for building back from COVID-19

Business leaders have pledged to scale-up sustainable investments globally, especially in countries most in need as a result of the COVID-19 pandemic

Business giants worth $16 trillion have commited to mobilising resources to build back better from COVID-19.

After a meeting convened by United Nations Secretary-General António Guterres today with global business leaders , the Global Investors for Sustainable Development Alliance have issued a statement vowing greater action to confront the global economic crisis driven by the COVID-19 pandemic and keep the Sustainable Development Goals on track. 

“We, the Members of the Global Investors for Sustainable Development Alliance, met in these extraordinary circumstances to send a strong message of unity and commitment. We reinforce the UN Secretary-General’s calls for wide ranging actions that match the scale of the crisis,” the statement said. (The full statement is given at the end of this post.)

The Secretary-General told the Alliance that the pandemic’s toll of skyrocketing unemployment, and the shuttering of businesses would hurt the poorest and most vulnerable and that rebuilding to pre-crisis levels of employment and output may take years.

“COVID-19 is having dramatic impacts on the way the world works – for example, by reducing energy usage and prompting the adoption of technologies that can decouple the economy from its reliance on fossil fuels,” Guterres said. “These changes can be the beginning of the process of shaping our world for the better. But the global community must go further, taking active steps to align recovery with sustainable development.”

The Alliance members agreed to accelerate efforts to align investment with sustainable development objectives and integrate the SDGs into their core business models. They also pledged to establish scalable innovative financing and investment vehicles to advance the SDGs, including through COVID-19 bonds, risk-sharing tools, joint investment and business matchmaking platforms.

In addition, the group promised to promote regulations that facilitate investment in sustainable development and create more resilient economies. They also pledged to accelerate private and public sector collaboration to develop models that price-in carbon emissions and other ways to incentivize sustainable business practices.

The virtual meeting, aimed at leading an urgent and coordinated response from the private sector, was chaired by UN Special Envoy for Climate Change and Finance, former Bank of England Governor Mark Carney. High profile attendees included GISD co-chairs Oliver Bäte, CEO of Allianz SE and Leila Fourie CEO of the Johannesburg Stock Exchange (JSE); as well as Brian Moynihan, Chairman & CEO of Bank of America; Marcie Frost, CEO of California Public Employees’ Retirement System (CalPERS); Michael Corbat, CEO of Citigroup; and Anna Botín, Group Executive Chairman of Banco Santander. 

“No country has been spared from the economic ravages of COVID-19, with an unprecedented increase in unemployment and severe impacts falling on the poorest and most vulnerable,” Leila Fourie said today. “The pandemic has exacerbated inequalities which the SDGs are meant to address, and threatens to set back decades of progress.” 

Fourie added, “We can still achieve the Goals, but it will take the mobilization of resources from both public and private sources, on a scale greater than previously foreseen.”

According to the Secretary-General, COVID-19 should be a wake-up call for the world. He has urged a green recovery from the pandemic, focused on delivering new jobs and businesses through a “clean, green transition”, tied to sustainable growth and resiliency. He has specifically called for an end to fossil fuel subsidies and said climate risks should be incorporated into financial systems. 

Guterres said that crises in general are set to become even more multi-layered and complex, stretching already limited resources and causing more widespread human suffering. He called on the GISD members to seize the moment of the COVID-19 crisis to shape the future for the better. 

“COVID-19 has derailed many plans; it has shifted the focus away from long-term planning to immediate needs. But this crisis underscores the need to think long term, build resilience and limit the impact of future crises,” the Secretary-General said.

COVID-19 and Beyond: Response and Recovery 

The full statement of action by the Global Investors for Sustainable Development (GISD) Alliance is as follows:

The COVID-19 pandemic has led to tremendous human suffering all over the world. Hundreds of thousands of individuals have lost their lives, many more have been infected with the virus. Humanitarian crises have spread. The social, financial and economic impacts are unprecedented and we must address them while ensuring they do not derail the investment needed for the Sustainable Development Goals (SDGs). We must confront this momentous challenge with decisive action by all stakeholders to ensure the timely achievement of the SDGs.

Our commitment: Build a more stable and sustainable economy

We, the Members of the Global Investors for Sustainable Development (GISD) Alliance, met in these extraordinary circumstances to send a strong message of unity and commitment. We reinforce the UN Secretary-General’s calls for wide ranging actions that match the scale of the crisis. 
We are determined to continue to transform finance and investment to bring the world on a trajectory to sustainable development. We are committed to make the post COVID-19 economy more sustainable and resilient to external shocks, such as climate-related ones. We will act within our companies, in our industries, and in partnership with public actors to enable a robust global response and recovery that is aligned with the 2030 Agenda for Sustainable Development. 

Our plan: Accelerate action for a sustainable and resilient recovery

We have already taken significant steps to address the fallout of the pandemic. This includes the mobilization of capital through COVID-19 bonds, extraordinary measures to provide liquidity to our customers and suppliers and seeking viable investment opportunities for our beneficiaries and clients, in line with our fiduciary duties. Such responses are aligned to the SDGs.

But more needs to be done. We will make efforts to accelerate actions in the following areas:

I. Urge the broader business sector to better integrate the SDGs into core business models: We will endeavor to align internal strategies, policies and guidelines with the SDGs, introduce long-term performance metrics, and accelerate company disclosure and reporting on social and environmental issues. 

II. Scale-up sustainable investments globally, especially to countries and areas most in need: We will work to establish scalable innovative financing and investment vehicles that are aligned with the SDGs, including COVID-19 bonds, risk-sharing tools, joint investment and business match making platforms

III. Align investment with sustainable development objectives: We will advance voluntary industry-based standards, principles and benchmarks that help align investment with the definition of Sustainable Development Investment agreed by GISD. This will give clarity on impact and help drive the scale that is required for success.

Some of our actions will be undertaken in partnership with policy makers and regulatory bodies:

IV. Advocate for a coordinated international approach to financial regulation: We will promote a regulatory environment that facilitates finance and investment for sustainable development and create more resilient economies.

V. Encourage rating agencies to better incorporate sustainable development considerations into their decision-making: We will work with rating agencies to increase the time horizon of their credit assessments and integrate social and environmental risks into their decision-making, while also taking into consideration the different development stages and needs of countries.

VI. Advance internalization of key externalities: We will accelerate private and public sector collaboration to develop and approve models that price-in carbon emissions and other ways to incentivize sustainable business practices.

Our commitment to the 2030 Agenda for Sustainable Development and to creating a resilient, sustainable world for all is stronger than ever, even in the face of the COVID-19 pandemic. To achieve this, we will work collaboratively with all stakeholders. Together, we are determined to overcome the impact of the COVID-19 pandemic and build a better and brighter world for future generations.

Image courtesy of iStockPhoto.com

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