The outbreak of the Covid-19 pandemic has shown myriad examples of why the world needs to join forces to overcome challenges, promote sustainable development and build back better.
Indeed, the UN’s website states that containing the pandemic “requires the participation of all governments, the private sector, civil society organisations and ordinary citizens around the world”. Strengthening multilateralism and global partnerships is more important than ever, and this is the target of the UN’s 17th Sustainable Development Goal (SDG).
SDG17 seeks to strengthen the means of implementation and revitalise the global partnership for sustainable development. However, there are several obstacles when it comes to reaching this goal by the 2030 target. Analysis by Investment Monitor shows that challenges related to the SDG17 targets are having a big impact upon the business environment and people’s lives across the world.
More specifically, Investment Monitor’s Partnership for Goals Risk Index 2021 reveals that 40.6% of countries across the world are still considered to be 'high risk' when it comes to partnerships, with scores based on government and tax revenues, broadband subscriptions per capita, merchandise trade and the value of outward foreign direct investment (FDI). Only 18% of countries are in the 'low-risk' category, and 41.4% fall under 'medium risk'.
What kind of FDI projects can help to hit SDG17 targets?
There is a big gap in investing in partnerships across the world, and this presents a significant opportunity for the FDI community, according to Simon McKenzie, managing director for Asia-Pacific at management consultancy Bridge Partnership.
Indeed, there are many investment opportunities that could help to reach the targets of SDG17, which according to the UN SDG Investor Platform, include:
- lending to small and medium-sized enterprises and microfinance
- asset lean acceptance infrastructure such as ATMs and agent banking points
- construction and maintenance of road infrastructure
- decentralised ICT broadband distribution infrastructure
- extension of fibre-optic internet services in rural and peripheral areas
- fintech platforms facilitating payments services to promote digital channels for financial services
- mobile payments technologies and services
- mobile broadband distribution
- off-grid solar Wi-Fi
- sustainable e-commerce
McKenzie explains that the SDG17 targets extend into several areas, including mobilising finance, enabling international collaboration in technology, promoting trade and addressing systemic issues. FDI can play a large role in each of these.
However, McKenzie adds that the biggest challenge is persuading investors, governments, businesses and non-governmental organisations to come together in a coordinated manner to align government policy, business policy, finance and breakthrough solutions.
Bringing together all players is a challenge, but joining forces presents an opportunity to make an impact on a global scale, particularly when it comes to less-developed countries.
In fact, one of the targets of SDG17 concerns the adoption and implementation of investment promotion regimes for the least-developed countries. Data shows that some countries have bilateral investment treaties, either signed or already in force.
How can companies help meet SDG17 targets?
The private sector, and more specifically multinational companies (MNCs), have an important role to play in reaching the SDG17 targets.
“Using SDG17 for innovation is key because companies can use it as a way to reach other partners, broaden their perspective and come across more opportunities," says Marjolein Hins, founder at OntwikkelRijk, a partnership in the field of lifelong development, collective impact and responsible innovation. "Exchanging information with other organisations can have a positive impact on personal and product development, but it is also essential for the organisations and the teams to highlight what went well and what didn’t, in a way to help each other and lead by example.”
According to the Danish Institute for Human Rights’ Sustainable Development Through Human Rights Due Diligence database, examples of companies’ actions that could contribute to reaching the SDG17 targets include pushing for transparent tax systems, calling on regulators to obtain increased tax transparency from peers, disclosing tax arrangements, and making the link between tax contributions and the fulfilment of the SDGs. Other actions include publishing country-by-country tax reports, undertaking cross-sector and collaborative efforts to end corruption and businesses embracing their roles as defenders of human rights.
One example of a partnership that could work towards the achievement of SGD17 comes in the financial services sector, with the launch of a joint committee between the Principles for Responsible Investment (PRI) and the UN Environment Programme Finance Initiative (UNEP FI), which brings together banks and investors.
By joining forces and a creating a committee that focuses on creating synergies to promote sustainable finance in corporate lending, PRI and UNEP FI show how to engage and create value by collaborating and working towards the targets of SDG17. This committee is seeking to bring about quicker and easier implementation of ESG criteria by investors and banks, while reducing 'greenwashing' or sustainability washing.
Investors and MNCs with subsidiaries in several countries have great responsibility when it comes to shaping partnerships at a global level and promoting the embracing of ESG criteria. This is because these organisations have the scale to transform the business environments in the countries where they are investing, which, combined, could have a huge impact on a global level and move the world closer to hitting the targets of SDG17.
This is one of the articles in Investment Monitor’s 'SDG Focus' series. The full list of articles is listed below.
- SDG1 – poverty
- SDG2 – hunger
- SDG3 – health
- SDG4 – education
- SDG5 – gender
- SDG6 – water
- SDG7 – energy
- SDG8 – employment
- SDG9 – infrastructure
- SDG10 – inequality
- SDG11 – sustainable cities
- SDG12 – responsible production and consumption
- SDG13 – climate change
- SDG14 – life under water
- SDG15 – life on land
- SDG16 – peace, justice and strong institutions
- SDG17 – partnerships