House View by the Chief Investment Office
What's stopping private wealth from helping fund the SDGs?
16 January 2017 | Tags: World Economic Forum
Reading time: 5 minutes
This is an excerpt from the UBS white paper: Mobilizing private wealth for public good.
There’s no time like the present to engage private investors and encourage them to use their wealth to help fund the SDGs.
There’s no time like the present to engage private investors and encourage them to use their wealth to help fund the SDGs. The notion that society’s richest have been the biggest winners in the post-financial crisis world (and that the rest of society has fallen behind) have contributed to social disquiet, increasingly populist politics, and a push back against the tide of globalization.
How can private investors respond to this perception?
Increasing uptake of investments with positive social and environmental returns, as well as profit potential, may be one way to help soothe certain tensions. Investments designed to help meet the SDGs can satisfy this "dual bottom line" of financial and societal/environmental returns. And in many ways private wealth investors are well-suited to helping meet the SDGs. Many of the goals have long-run investment horizons, just like private wealth investors. Some of the impediments that hinder institutional capital from funding SDGs simply don’t exist for private clients. And the traits that bodies like the World Economic Forum want to promote to support sustainable global growth - such as responsive and responsible leadership - are bread and butter concepts for many private investors looking to protect and grow their wealth across generations.
"Many SDGs funding gap schemes offer investors the carrot of risk mitigation using public or not-for-profit funds. While this works for institutional investors, private wealth would be happy to take on additional investment risk if money was used to boost returns instead."
Which SDGs should private wealth focus on fulfilling?
It is clear, that private wealth alone cannot fulfil all of the SDGs. In our qualitative analysis we highlight those where private wealth has the biggest impact.