Webinar Series: Reimagining Private Capital for SDGs

In 2015, when the Sustainable Development Goals (SDGs) were adopted, the Global South required an estimated USD 2.5 trillion in private capital investments annually to meet the goals by 2030. In the wake of the pandemic, private investments in developing and transition economies have fallen, and COVID recovery financing requirements have increased. The revised estimated SDG funding gap from private investments now stands at a staggering USD 4.2 trillion annually.

It is encouraging that private capital investments in emerging markets have grown significantly over the last decade. The impact investing sector is estimated to have surpassed USD 1T in assets under active management and grows at an estimated compound annual growth rate of up to 25 percent.

However, investors have concentrated in certain sectors and geographies, with clean energy and financial services accounting for about a third of the investments. To bridge the annual SDG funding gap, it is imperative to address the needs of underinvested sectors and geographies.

We expect the next phase of growth in private capital for SDGs to focus on:

• Inclusive Growth: investing in and financing diverse and underserved entrepreneurs and fund managers through localization of fund management and application of a gender lens to investments; investing in lesser developed countries and communities with limited access to developmental capital
• Sectoral Diversification: channeling more investments into healthcare; water, sanitation, and hygiene; diversification outside of climate mitigation (93% of current climate finance) and renewable energy (58% of current climate finance) to focus on climate adaptation and resilience
• Innovative Finance: financial tools such as blended finance, results-based financing, climate and gender lens investing, digital instruments, and innovative fund management models to incorporate impact and diversity.

Abt’s webinar series over the next 12 – 15 months on Reimagining Private Capital for SDGs will focus on these themes and culminate in “Call to Action” sessions focused on blended finance and support for first time and diverse fund managers. To get advance notice of these and other upcoming events subscribe to Abt events.

UPCOMING EVENTS:

Watch this space for new topics in this webinar series. To get advance notice of these and other upcoming events subscribe to Abt events.

PREVIOUSLY RECORDED EVENTS:

The Next Phase of Financing for Resilience
Wednesday, December 4, 2024 
10:00am - 11:00am EST

The revised Sustainable Development Goals (SDGs) funding gap from private investments now stands at a staggering USD 4.2 trillion annually. With six years remaining to achieve the 2030 targets, we need new avenues for financing that can bolster resiliency across sectors. While international public financing for adaptation to emerging markets reached $28 billion in 2022, that did not lead to a paradigm shift for private investment in climate finance. As COP29 brought a new round of public financing commitments, we see the tremendous shortfall – and opportunity – for the private sector to fill this financing gap through sustainable, risk-adjusted mechanisms using a blend of public and private capital.

In the fourth webinar in the series, we explored innovative financial strategies to enhance resilience against global challenges. We examined investment vehicles for mobilizing larger pools of capital, including debt swaps, insurance, and blended transactions along with best practices for de-risking private capital. The discussion addressed the climate finance challenge and highlighted emerging private sector opportunities, such as rising consumer demand for nature-positive goods and financing sustainable supply chains. We also covered the current resilience financing landscape, spotlighted innovative financial tools, and shared case studies from various regions and sectors. Watch the webinar recording.

Investing with a Gender Lens: The Next Phase of Gender Lens Investing
Tuesday, January 16, 2024 
9:00 am - 10:00 am ET

The revised Sustainable Development Goals (SDGs) funding gap from private investments now stands at a staggering USD 4.2 trillion annually. SDG5, Gender Equality, is based on gender equality as “not only a fundamental human right, but a necessary foundation for a peaceful, prosperous and sustainable world.” With only seven years remaining, a mere 15.4% of SDG5 indicators are “on track” compared to the SDG’s 2030 targets. Increasing the flow of financing to women-owned or -led businesses, or businesses that disproportionally benefit women through employment or their goods and services offerings, is critical to empowering women economically.

More and more, investors are deploying capital with an intentional gender lens – meaning, they incorporate gender considerations – as well as financial considerations - throughout the investment process to make investment decisions that lead to better gender equality and economic outcomes. In emerging markets, such investment capital comes primarily from development finance institutions and impact investors, with impact investors playing a growing role in meeting that market need. For instance, in Southeast Asia, annual investments from Development Financial Institutions have stabilized at about $2 billion over the last five years, while the number of private impact investing deals has increased by over 40%. At the same time, across all regions, private capital invested in women-owned or -led businesses, specifically, has increased significantly. However, many of the financial instruments available to women-owned or -led businesses do not meet their financing needs, speaking to the need for more creative or suitable financial products.

In this third webinar in the series, we explored the limitations of current financial offerings to women-owned and -led businesses – especially the traditional venture capital (VC) and private equity (PE) models – and talked through alternative models of financing that could better serve the needs of these businesses. Listen to the webinar to hear answers to questions such as: If the VC/PE offerings are only meeting the financing needs of a small proportion of women-owned and -led businesses, how do we meet the rest? What financial products are currently being tested and deployed? Is this why so little capital is being invested in women-owned and -led companies? The panel also explored commonly held misconceptions about women-owned and -led businesses and about female fund managers from the panelists’ firsthand experiences. Watch the webinar recording.