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At a time of unprecedented global challenges, sustainable finance is a driving force for social and economic resilience. Public and private finance are essential for recovery from the COVID-19 pandemic, and from the wide-ranging effects on the achievements of the SDGs. Rallying private sector participation and strengthening private and public sector networks for achieving sustainable and inclusive economic growth take on new urgency. National resource mobilization and increased commitments from private investors and enterprises will be needed for recovery, while maintaining progress towards the achievement of the Sustainable Development Goals (SDGs) by 2030. To achieve transformational changes in health, climate, environment, education, agriculture, gender equality, and the eradication of poverty in all its forms, greater private sector engagement and investments are critically needed.

As the UN’s global development network, the United Nations Development Programme (UNDP) is advocating for change and connecting countries to knowledge, experience, and resources to help people build a better life. UNDP’s SDG Impact initiative seeks to catalyse financial investments from the private sector that advance the SDGs. As interest grows among private sector actors to align investment activity with the SDGs, there is a demonstrated need for unifying standards, tools, and services that can be relied upon by investors to support a process of targeting, measuring, and achieving development outcomes.

SDG Investor Maps are market intelligence tools that help the private sector identify investment themes in emerging markets which have significant potential to advance the SDGs that are aligned to government policies and sustainable national development needs. It seeks to address the need for more private capital to be channelled to the developing market, and for the funding to contribute to the SDGs. Private sector investors who are looking for SDG investments can use the SDG Investor Maps to explore investment themes in the knowledge that they are aligned to the identified SDG needs in country and the governments’ development priorities - thereby strengthening the potential for deep sustainable development.

SDG Investor Maps are created using an established 8-step methodology that combines secondary data research (on existing development needs using the SDG framework, policy priorities, and market opportunities) with interviews/discussions with public and private sector stakeholders to verify findings and contribute new insights. The data are analysed to distil Investment Opportunity Areas (IOAs) and data-backed business models, mapped across 20+ data points. The findings of the Investor Maps are synthesized in an Excel template and uploaded into a dynamic online platform (upcoming late 2020) where investors can search for the market intelligence on investment opportunities by various functionalities.

In the Philippines, the SDG Investor Map may complement the COVID-19 Rapid Assessment activities that are planned to be undertaken. Its goal is to gather and analyse new data on 1) changes in private sector strategies, and 2) on emerging SDG-related priorities in the context of COVID-19, to rapidly identify business models and Investment Opportunity Areas that can respond to the COVID-19 crisis. It is based on an online survey directed to the private sector, in-depth private sector interviews, and desk research of emerging COVID-19 impact assessments (e.g., UNDP socio-economic assessments).

Over the years, the UNDP Philippines have been working closely with the private sector to leverage additional resources for the SDGs through private sector financing. Among these initiatives are the following:

Transformational Business

In 2016, the UNDP, in partnership with the Philippine Business for the Environment, launched the SDGs online portal where companies provided data and other information on their initiatives that contribute to the SDGs. This led to the release of the first Transformational Business Report released in November 2017 which highlights how businesses are aligning their core business processes, activities, and initiatives with the SDGs. Based on the report, a total of Php 40.7 billion have already been invested in SDG-aligned core business practices and programs in the country. The challenge for the private sector is to move away from thinking and operating in silos, towards a truly inclusive and sustainable approach to doing business.

Inclusive Business

Alongside the Transformational Business Report, the UNDP, in partnership with the Philippine Business for Social Progress, also published a report in 2017 entitled: New Horizons: How Inclusive Business is Helping Achieve the SDGs in the Philippines, which aims to demonstrate how the private sector can be engaged in the country to contribute to achieving national development priorities and the SDGs, and at the same time, show how governments and other stakeholders can create an environment in which such business models thrive and reach scale. The report emphasised that the concept of Inclusive Business demonstrates strong potential for contributing to the SDGs as companies adopting Inclusive Business models are providing sustainable income opportunities and more affordable goods and services for people. As such, one of the key recommendations was to increase awareness and ensure greater engagement of Inclusive Business practitioners in policy and programme development. The SDG Investor Mapping exercise can be one concrete way of achieving that.

Better Business Better World: Philippines

Following this up, in 2019, the UNDP in the Philippines also produced the Better Business, Better World: Philippines Report which details the most significant business opportunities aligned with the SDGs in four key areas of the Philippine economy, namely: cities and mobility; energy and materials; food and agriculture; and health and well- being. The report highlighted that through the shift to sustainable business models, an economic prize worth more than US$82 billion across the country, alongside large environmental and social benefits can be achieved by 2030. The way forward is to drive commitment and pursue concrete actions towards that goal.

BioFin

As one of the 17 megadiverse countries in the world, the Philippines produced the Philippine Biodiversity Strategy and Action Plan (PBSAP) 2015-2028 which provides the measures in conserving its key biodiversity areas. To implement the Plan, a total of PhP 24-B (USD 530 million) annually has been identified as its financing requirement. With the current level of spending on biodiversity which is at PhP 5B (USD 110 million) per year, there is a financing gap of around 80%. BIOFIN was initiated by the UNDP to identify, access, combine and sequence various sources of biodiversity funding to meet national needs and targets. At present, the Philippines is implementing several finance solutions involving the national agencies, local government units, the private sector, civil society organizations, and the citizenry to implement the PBSAP.

Climate Finance

There are two climate finance projects that will be implemented by the Country Office. These are the Accelerating Green and Climate Finance in the Philippines: Nature Based Solutions or the Climate Finance PH for NBS and the Climate Finance Network or CFN. Specifically, the Climate Finance PH for NBS aims to increase private sector investments into gender responsive nature-based solutions for climate resilient technologies, innovations, practices and approaches.

This Project will demonstrate how these additional investments can generate solid financial returns and contribute to the achievement of other SDG goals such as gender equality, expanding access to clean water, job creation, increase in incomes of local communities, increased food production, increased sustainable consumption and production and enhanced natural resilience, among others. The CFN, on the other hand, will work across on six inter-related workstreams which are based on our climate change finance programming experience over the past five years and lessons learnt during the inception phase of the CFN: 1) Climate change aligned budgeting and planning; 2) Direct access to international climate change finance; 3) Tax and use of innovative climate change financing instruments; 4) Gender and social inclusion and climate change finance; and 5) Transparency and accountability of climate change finance; and 6) Modelling climate change impacts on economic growth, sectors and consideration of distributional impacts. Across the mentioned six workstreams, the project will aim to achieve the following outputs, factoring in the importance of realizing positive impacts for gender equality, poverty and human rights in all of the workstreams.

JP INFF

Currently, the Philippines is implementing the Joint SDG Fund Joint Programme on Reaping the Demographic Dividend and Managing the Socio-Economic Impact of COVID-19 by Applying an Integrated National Financing Framework in the Philippines (JP INFF and DD) that aims to apply the building blocks of the Integrated National Financing Framework (INFF) to provide catalytic support – tools, technical assistance for strengthening systems, coordination, and consensus building on priorities as part of a whole of government approach in support of We Recover As One. It will strengthen national planning and budgeting mechanisms to ensure that a more effective resource allocation and establish a more diversified financing framework that can leverage additional resources for the implementation of COVID-19 recovery strategies, and ultimately, the achievement of the SDGs  in an integrated manner.

Part of the JP INFF work is the updating of the country’s Development Finance Assessment, following its first report published in 2014[1], and a snapshot released in 2017[2], which aims to provide an overview of the financing landscape in the Philippines and identify where resources are available to support the attainment of the SDGs, especially given the impact of COVID-19. Based on the 2017 report, domestic private investment measured according to fixed capital formation has more than doubled since 2000 to 2015 ($18.1B to $51.6B), and the role of stable and liquid financial markets as well as of microfinance in contributing to the national development agenda has been highlighted.  

The development of SDG Investor Maps will strongly support the implementation of INFF in the Philippines, as it aims to bring together the full range of financing sources – public finance and tax, aid, borrowing, and private investments, to align resource flows and policies to support national development strategies or plans, and lay out a strategy to increase investment, manage risks, and achieve sustainable development.

[1] Copy of 2014 Philippines DFA Report

[2] Copy of 2017 Philippines DFA Snapshot

SDG Impact is part of the UNDP Sustainable Finance Hub (SFH), working to accelerate private sector contributions towards the achievement of the Sustainable Development Goals (SDGs) by 2030. Its objective is to help businesses and investors embed sustainability at the core of management decisions and direct capital to where it can make the most difference to people and planet.

We are pushing against the boundaries of our social and natural systems. Inequality, climate change and other sustainable development issues have been exacerbated by COVID-19. According to the OECD, there is an annual SDG financing gap of US$ 3.7 trillion – up from US$2.5 trillion before the pandemic. That is just part of the problem – the other part is knowing how much of it will actually contribute to the SDGs. Indeed, there is increasing pressure from consumers and end-investors for genuine sustainable practices and reduced SDG-washing.

While there is a growing awareness from enterprises and investors that their prospects depend on the health of people and planet, it is not enough. We are not yet on a sustainable path. Many business and investment decisions, whether knowingly or not, are having negative impacts on people and planet that could be avoided or significantly reduced by simply considering all aspects of impacts of their decisions. Making informed decisions is harder without a universal yardstick for sustainable management practices despite the numerous reporting standards and taxonomies available. Businesses and investors are still not able to authenticate their contribution to sustainability and achieving the SDGs which fuels “SDG-washing”. Secondly, private capital is not targeted to where it is needed most - only 20% of global capital is held in developing countries which represent 84% of the world’s population. We need action.

UNDP’s SDG Impact provides innovative solutions to enable the private sector to make decisions that advances the achievement of the SDGs and reduce the risk of SDG-washing. Our SDG Impact Standards, along with the upcoming SDG Impact Assurance Framework and  Seal sets the bar for management best practices that embed sustainability at the core of any organization. We also provide training and education to give users the knowledge and skills to implement the SDG Impact Standards. Our goal is to foster a change in mindset in management where sustainability is at the heart of decision-making. The SDG Investor Maps identifies investment themes and business models that help intermediaries build an investment pipeline aligned to national sustainable development needs and priority areas. Further, by leveraging UNDP’s 170 Country Offices, we can connect the public and private sectors across the economic ecosystem, including to explore solutions where there are currently limited opportunities for the private sector to invest.