JPMorgan pushes framework for capital seekers to make sustainability commitments
- A disclosure framework aims to help capital seekers attract money to plug a severe funding gap for the development goals in emerging markets
Investors are eager to pour funds into achieving the United Nations’ sustainable development goals (SDGs) in emerging markets, but companies and government institutions are leaving money on the table because they are not doing enough to trumpet their contributions towards those objectives, according to JPMorgan.
To give capital providers the confidence to invest, governments and companies need to paint a better picture of their dedication by setting targets, devising action plans and providing disclosures on their positive social and environmental results in each key market, said Arsalan Mahtafar, head of JPMorgan Development Finance Institution (DFI).
The US banking giant’s DFI team structures financing deals and investments with measurable development impact and distributes them to investors focused on social and environmental issues.
As of last year, developing nations faced a financing gap of US$4 trillion per year in meeting the UN’s 17 sustainable development goals for 2030, according to intergovernmental body UN Trade and Development. The shortfall has widened from US$2.5 trillion when the goals were approved by 193 UN member states in 2015.
This is despite the world having US$7 trillion in funds that incorporate environmental, social and governance (ESG) factors as their key investment focus, US$2.8 trillion in sustainability strategy funds and US$1.2 trillion in impact funds, Mahtafar said.
