The UN Global Compact CFO Taskforce, launched at the end of 2019 to direct corporate funds toward sustainable investments by aligning finance captains across industries, has seen its ranks—and financial commitments—grow steadily.
On September 20, the taskforce further increased its momentum to mobilize the trillions of dollars needed to effect meaningful global change and build healthy societies by launching its ambitious SDG initiative during the UN Global Compact’s Private Sector Forum event “CFO Insights,” on the sidelines of the 76th UN General Assembly.
The group of 60 CFOs, representing a combined $1.7 trillion in market capitalization, announced its commitment to collectively invest $500 billion over the next five years toward achieving the UN’s Sustainable Development Goals (SDGs), and to link nearly 50% of its members’ corporate financing to sustainability performance. The taskforce also announced plans to issue hundreds of billions of dollars in new sustainability-linked bonds and other financial instruments to accelerate ethical investment—part of the win-win strategy known as “stakeholder capitalism,” where sustainable companies thrive and create value for all.
Funding transformative global action
“With this commitment, we set a necessary milestone on a journey which began in December 2019, when a small group of CFOs started working together toward a vision of boosting the integration of sustainability within business operations,” said Alberto De Paoli, CFO of energy giant Enel and Co-chair of the CFO Taskforce. “Now, we aim to increase awareness even further and help create the necessary environment to attract more capital towards sustainable development.”
“Now is the time for business to become sustainable business and for corporate to become sustainable corporate.”
The CFO Taskforce aims to inspire CFOs to take action as architects of long-term sustainable value creation, and to raise awareness of the transformative impact of sustainable corporate finance across financial markets, the global economy, the environment and society. Public money alone cannot achieve the SDGs, and the taskforce aspires to create a transparent and diverse market for corporate SDG investments and finance in order to channel substantial funds toward effective private-sector solutions that align with the goals. The taskforce provides CFOs with a platform to share ideas, develop new concepts and frameworks and offer recommendations to unlock private capital and create a market for mainstream SDG investments. To drive corporate finance towards the SDGs, the taskforce has created a comprehensive management and governance framework, the CFO Principles on Integrated SDG Investments and Finance: A Step-by-Step Approach to Integrate the SDGs into Corporate Finance.
Investing trillions in a sustainable future
A vast amount of investment is clearly needed to meet sustainability challenges now and into the future, and the taskforce seeks to recruit many more large companies to adopt similar corporate strategies and commitments. This unprecedented global movement of finance chiefs and their corporations could potentially mobilize trillions of investment dollars annually in support of the SDGs, in critical areas such as sustainable infrastructure, renewable energy, clean water, health care, food and agriculture, social equality and decent work.
“The impacts and risks presented by the pandemic reinforce the case to align more global finance in support of a more sustainable and inclusive world and to achieve the 2030 Agenda. With our efforts to recruit more participants from the UN Global Compact to our CFO Taskforce, we believe we can leverage trillions of dollars of corporate finance towards the Sustainable Development Goals,” affirmed Sanda Ojiambo, CEO & Executive Director of the UN Global Compact.
In his address to the UN forum, De Paoli pointed out that “the role of corporate investments and finance in relation to the global goals has never been more important than today,” and that “Investments and finance that build healthy societies and healthy markets, creating shared and distributed values, will inevitably drive a new concept of capitalism—the so-called ‘stakeholder capitalism,’ where sustainable companies will grow and prosper, creating value for all.”
This idea is being emphasised in business as never before. Author Klaus Schwab, in his 2021 book, Stakeholder Capitalism: A Global Economy that Works for Progress, People and Planet, defines stakeholder capitalism as “a form of capitalism in which companies do not only optimize short-term profits for shareholders, but seek long-term value creation, by taking into account the needs of all their stakeholders, and society at large.”
A super-major’s commitment
De Paoli’s company, Enel—Europe’s largest power company by EBITDA and the world’s biggest private renewable energy provider by installed capacity—is setting an example of a super-major committed to sustainable transformation. Founded in 1962, it was the first utility to install smart meters, in 2001, and the first private company in the renewable sector to be listed on the Dow Jones Sustainability Index, in 2004. It has also been recognized by the Bloomberg Gender Equality Index, the Refinitiv Diversity and Inclusion Index and the Equileap Top 100 for promoting gender equality.
“International cooperation, public-private partnership, sustainable finance improvements and a holistic and comprehensive approach are fundamental to target the global ambitions of the Paris Agreement,” said De Paoli. He emphasized that “now is the time for business to become sustainable business and for corporate to become ‘sustainable corporate.’”
While enthusing that “This will be a very exciting journey,” De Paoli observed that “No other choice is available for companies wishing to grow and thrive in the future,” and he called for “CFOs everywhere to join us to write together the new business history of this century.”
Read more information about the UN Global Compact CFO Taskforce
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