Johannesburg, 11 June 2020: In a meeting convened by United Nations Secretary-General António Guterres yesterday, leaders of prominent financial institutions and businesses pledged to scale-up sustainable investments globally, especially in countries that needed it most because of the COVID-19 pandemic.
The Global Investors for Sustainable Development (GISD) Alliance issued a statement committing to greater action to confront the global economic crisis driven by the COVID-19 pandemic and keep the Sustainable Development Goals on track. JSE Group CEO, Leila Fourie co-chairs the initiative, which aims to leverage finance and investment know-how in a bid to free up trillions of dollars from the private sector to finance the Sustainable Investment Goals.
"We, the Members of the Global Investors for Sustainable Development Alliance, met in these extraordinary circumstances to send a strong message of unity and commitment. We reinforce the UN Secretary-General's calls for wide ranging actions that match the scale of the crisis," the statement said.
The Secretary-General told the GISD Alliance that the pandemic's toll of skyrocketing unemployment and the closing of businesses would hurt the poorest and most vulnerable and that rebuilding to pre-crisis levels of employment and output may take years.
"COVID-19 is having dramatic impacts on the way the world works – for example, by reducing energy usage and prompting the adoption of technologies that can decouple the economy from its reliance on fossil fuels," Guterres said. "These changes can be the beginning of the process of shaping our world for the better. But the global community must go further, taking active steps to align recovery with sustainable development."
The GISD Alliance members agreed to accelerate efforts to align investment with sustainable development objectives and integrate the SDGs into their core business models. They also pledged to establish scalable innovative financing and investment vehicles to advance the SDGs, including through COVID-19 bonds, risk-sharing tools, joint investment and business networking platforms.
In addition, the group promised to promote regulations that facilitate investment in sustainable development and create more resilient economies. They also pledged to accelerate private and public sector collaboration to develop models that price-in carbon emissions and other ways to incentivise sustainable business practices.
Dr Leila Fourie, CEO of the JSE said, "There isn't a country around the globe that has been spared from the economic ravages of COVID-19 – perhaps some more than others though. Here in South Africa we know that our rising unemployment rate has meant that the poorest and most vulnerable of our society have been most impacted by the pandemic. It has exacerbated inequalities which the SDG's are addressing, as without this intervention decades worth of progress will be affected."
Fourie added, "The goals are still in our sights but it will take the mobilisation of resources from both our public and private sectors that need to take accountability on a scale greater than we have previously experienced."
In an effort to drive sustainable investment and development, the JSE is expanding its Green Bond Segment into a Sustainability Segment and this will become active imminently. This expansion will build on the success of the Green Bonds' "use of proceeds" model and will follow established frameworks for Sustainability Bonds and Social Bonds in addition to the current Green Bonds. These instruments will broaden the options available to our investors, and offer applicant issuers the ability to increase their participation in the broader impact and sustainability markets.
The JSE is the only stock exchange globally in the alliance and is joined by Investec. Investec CEO, Fani Titi, says "COVID-19 has made investment in the Sustainable Development Goals more urgent than ever. Investment in sustainable, innovative and resilient infrastructure is critical to pave the way for an inclusive post-COVID economic recovery."
According to the Secretary-General, COVID-19 should be a wake-up call for the world. He has urged a green recovery from the pandemic, focused on delivering new jobs and businesses through a "clean green transition", tied to sustainable growth and resilience. He has specifically called for an end to fossil fuel subsidies and said climate risks should be incorporated into financial systems.
"COVID-19 has derailed many plans; it has shifted the focus away from long-term planning to immediate needs. But this crisis underscores the need to think long term, build resilience and limit the impact of future crises," the Secretary-General said.