Financial development is not simply an outcome of economic growth. It plays a huge part in the workings of any nation’s economy, not only creating financial value, but also contributing to sustainable development by increasing investment aligned to the Sustainable Development Goals. With financial products no longer limited to the traditional financial sector, financial services have a huge role in progressing economic development and sustainability in tandem.
Growing business action, but greater alignment with strategy needed
Despite a high number of respondents (88%) within the financial services system taking action on the SDGs, only 58 per cent reported that their core business strategy is aligned with the SDGs. The interview data supports this, stating that businesses struggle with alignment.
System and company priorities aligned
In the financial services system, there is reasonable alignment between the SDGs that individual companies are prioritizing and those that respondents feel are a priority for the system industry as a whole. Only 3% acknowledge negative impacts on Goal 10: Reducing Inequalities, despite the sector being instrumental to advancing this SDG.
Scaling action towards the transition is needed
Across the four most important SDGs for the system, at least 50 per cent of respondents feel that the challenge is recognized by their sector, the vision for transition is in place and there is an agreed approach to deliver.
Sustainable transition needs
The challenge of financing the SDGs is not just about mobilizing more money to close the financing gap — it is more systemic, requiring investors and businesses of all sizes to be influenced. Centralized system to identify public and private investment flows, aligned with country development plans and better connection of green finance and digital services.