As part of the United Nations 2030 Agenda, the U.N. General Assembly has set forth the 17 global sustainable development goals (SDGs) to address poverty, hunger, health, education, gender equality, clean water, clean energy, economic growth, industry, inequality, cities, production, climate change, oceans, land, justice and partnerships.
It’s estimated that achieving the SDGs would require $2–3 trillion per year for the next 15 years. Ironically, the global cost of corruption is at least $2.6 trillion, or 5% of the global GDP. The World Bank estimates $1 trillion in bribes every year. Those annual figures closely match the capital needed to achieve the SDGs.
An important assumption in these figures is the initial and ongoing cost structure to implement large-scale infrastructure, energy, housing and other capital projects spearheaded by the likes of UNOPS and the World Bank. The utilization of outdated technologies results in new development quickly deteriorating to housing slums and health clinics that exceed capacity upon opening. The World Bank recognizes that they need to incorporate commercialization-ready exponential technologies to drive down the CapEx and OpEx while increasing efficiency, resiliency, sustainability and capabilities. For instance, AI algorithms on smartphone apps may soon be able to accurately detect skin cancer without the need for villagers to travel to a health clinic or to crowd a clinic facility. Innovation isn’t limited to physical infrastructure or material science.
Aspiration Versus Reality
There is a growing investment trend as pensions move toward a sustainable investment strategy. A recent report indicates that “as much as 10% of the $269 trillion of investable financial assets around the world could be tapped for social impact.” The IFC estimates that demand for impact investing could be as much as $21 trillion in public markets, with another $5 trillion in private equity, debt and venture capital. Currently, $700 billion is deployed through DFIs, and $400 billion through green and social bonds.
The Global Impact Investing Network (GIIN) estimates the size of the global impact investing market to be $502 billion, deployed by 1,340 organizations. The Global Sustainable Investment Alliance sizes the impact investing market at $444 billion. And the IFC estimates $71 billion is currently invested in private impact funds.