As much as $70 trillion may be needed to implement the SDGs over the next decade. Current rates of public and private investment rates in health, education, energy and other SDG-aligned sectors fall short by about $2.5 trillion short each year.
That is a big lift. But the gap represents only a small fraction of the estimated $290 trillion managed by pension funds, insurance companies, sovereign wealth funds and other institutional investors. Households and retail investors have also demonstrated an appetite for investments that combine financial returns with social impact. That suggests that financial structures that meet the needs of private investors while making measurable progress toward the global goals are essential in bridging the SDG financing gap.
For any innovative finance mechanism to be successful, relevant stakeholders including NGOs, governments, and donors need to take on an investment mindset and have the on-the-ground capacity to deliver with the discipline and rigor that the capital markets require.
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