FOREWORD

We entered this century with established principles for peace and progress based on multilateralism, scientific and technological advances and the economies of the world generating wealth at a near unprecedented rate, among other things. The last two decades have ended with political divisions, a devastating pandemic, unprecedented climate change and ecological degradation as well as increased inequalities. These have setback our work towards equitable, inclusive and sustainable development, including equality within and among countries.

The coronavirus disease of 2019 (COVID-19) pandemic has gravely wounded the world economy impacting all communities and individuals and resulted in further setbacks for the most vulnerable. Since the outbreak of the COVID-19 more than 1.5 million people have lost their lives due to the pandemic, and the global economy is expected to contract by a staggering 4.3 per cent in 2020. Millions of jobs have already been lost, millions of livelihoods are at risk, and an estimated additional 150 million people will be living in extreme poverty if the crisis persists.

There is widespread recognition that the same economic and financial systems that drove human progress and prosperity is also the cause of the urgent and interconnected challenges facing the world; and that failing to address them threaten to derail or erase progress made in the last decades.^II

However, the current pandemic and economic crisis offer once in a generation opportunity to address these challenges. And we have the roadmap to get there. The 17 Sustainable Development Goals and their 169 targets adopted by all 193 member States of the UN provide the roadmap to rebuild better, rebuild a green, resilient, inclusive and connected world. We must turn the tragedy of this pandemic to find the opportunities to bring about economic, social and governance transformations, putting in place the initiatives, incentives and institutions that will create a more sustainable future.

The ‘UN Secretary General’s Roadmap for Financing the 2030 Agenda for Sustainable Development 2019-2021’ - in support of which the “Capital as a Force for Good” was produced - emphasizes that this financing is available, given the size, scale and level of sophistication of the global financial system with c.US$350 trillion in total global assets.2 It is estimated by UNCTAD and the IMF that the world needs c.US$25-30 trillion dollars more to achieve the SDGs and much more work is require to achieve the goals of the Paris Agreement. Indeed, even though a reported 25% of the total US assets under professional management has fallen under the “sustainable, responsible and impact investing” categories, this has not yet worked its way through the system to fundamentally change the behavior of major industrial corporations.^III

Changing the way money flows across the world is one of the greatest challenges to achieving the SDGs. And this requires systemic changes in the way we as consumers decide not to buy from companies that harm the world, producers choosing to manufacture using sustainable production methods, and governments supporting good practices, especially in companies and sectors have large impact on carbon emissions, gender and other disadvantage group, disaster risk, and waste production

These issues are now at the top of international institutions, governments, and the private sector’s agenda. It is thus heartening that this report, “Capital as a Force for Good: Global Finance Industry Leaders Transforming Capitalism for a Sustainable Future”, documents what leaders in the financial sector are doing.

This initiative emerged from a UNHQ hosted meeting that mandated the group to determine the nature and potential impact of the changes the leading financial institutions are undertaking to determine if finance is changing fast enough, has reached critical mass and will help the world address its biggest challenges and seize the opportunities to create a better world.

Having examined over 60 of the world’s leading financial institutions in their asset classes and half of these engaging actively in ensuring their quantitative and qualitative case information was well reflected, we have a more holistic picture of the industry’s actions that have a positive impact. As a result, this critical initiative has great potential to galvanize the thousands in the industry that are not doing enough and create a virtuous cycle of competition and collaboration among the leaders to drive the systemic changes needed to achieve the SDG goals during this ‘Decade of Actions’. By nature of its position in the allocation of global capital, leading financiers can play a critical catalyzing role in addressing the SDGs and thereby ensuring the long-term sustainability of the system of enterprise that has driven the world’s development and prosperity.

This “Capital as a Force for Good” report is the first to systematically document the finance industry leaders’ active participation and increasingly proactive actions to address the world’s challenges for good, and how they are redefining their purpose from shareholder capitalism to encompass a broader responsibility to stakeholders as well as the myriad of initiatives they have launched to finance change. It is distinguished also in considering the scale, scope and potential of the changes underway. It shows that the leaders of the industry are partnering with each other, civil society, national and transnational organizations and are setting an example as members of critical major UN initiatives too that are aimed at impacting the issues as well creating commitment and accountability for positive change going forward.

Finally, we are at the early stages of the war on climate change and the need to renew our war on poverty, inequity and injustice. The next decade will need to see structural changes towards renewable sources of energy, climate-friendly technologies, low-carbon equipment and more sustainable modes of consumption as well as the empowerment of women and the next generation of participants in the global economy from the developing and developed world. Capital has a big role to play in the delivery of that better world and we wish it every success in accelerating its impact to become a great “force for good”.

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