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JPM, Deutsche among founders of taskforce aimed at plugging impact investing gap

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Published: 29 November 2023

The taskforce was formed to scale the financing of the United Nations Sustainable Development Goals and help developing countries access investment.

Developing countries face a $4tn gap in sustainable development investments, according to UNCTAD | Suken for iStock

Major banks including J.P. Morgan of the US, Standard Chartered of the UK and Germany’s Deutsche Bank have joined a host of global public and private sector financial institutions, capital markets participants, and industry stakeholders in forming the Impact Disclosure Taskforce.

Its main aim: plugging the impact investing gap.

“The taskforce is acutely aware that the world is not on track to achieve the SDGs, the global agenda agreed in 2015 to alleviate poverty and inequality, provide for basic needs, protect the planet and combat climate change by 2030,” the group said in a joint press release.

$4tn investment gap

According to a report by the United Nations Conference on Trade and Development (UNCTAD) earlier this year, developing countries face an annual gap of $4tn in sustainable development investments. While investment in renewables has almost tripled since the Paris Agreement in 2015, poorer nations have been largely left out, UNCTAD said.

Although the volume of private investment seeking financial, environmental and social returns is estimated to grow from $41tn in 2022 to $50tn by 2025, “corporate entities and sovereigns in jurisdictions with the most significant development gaps often lack the disclosures necessary to access such sustainable pools of capital,” the group said.

The taskforce said it had set out voluntary guidance “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 potential backers monitor and report their progress against such targets.

‘Unlocking billions’

“Institutional investors with strategies to finance the SDGs face a dearth of investible assets in the developing world,” said Arsalan Mahtafar, co-chair of the Impact Disclosure Taskforce and head of J.P. Morgan’s Development Finance Institution.

“A transparency mechanism on an entity’s anticipated and realised SDG impacts has the potential to unlock hundreds of billions of sustainable capital towards international development each year through mainstream financing channels.”

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 & 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.”

Two taskforces

The Impact Disclosure Taskforce is not to be confused with the Impact Taskforce, a G7-backed think tank founded in 2021, which aims to provide recommendations on how best to accelerate the volume and effectiveness of private capital targeting climate and other related UN SDGs.  

Other participants in the Impact Disclosure Taskforce include Amundi, AXA Investment Managers, Bank of America, BlueOrchard, Citi, Natixis Corporate & Investment Banking and Societe Generale.

The network also obtained input from public development banks including the Asian Development Bank, the French Agency for Development and the United States International Development Finance Corporation, as well as from the Global Impact Investing Network, members of the Global Investors for Sustainable Development Alliance, and Linklaters.

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