1. Leveraging Innovative Finance for the SDGs
SESSION IX
Leveraging Innovative Finance for the SDGs
Incentives, models and tools
5 MARCH 2019

2. FINANCING THE SDGs FRAMEWORK

3. Working With The Private Sector on Climate Change
Presented by Erik Davies
March 2019

4. We have come a long way… Pre 2002 Lack of trust internationally
Yet many partnerships with business at local level achieved development goals
The World Summit on Sustainable Development (2002)
Business officially recognized as development actors
Today 2019
Mobilizing significant private investment to address climate change

5. Moving from CSR To Sustainable Markets
Traditionally governments and donors have tapped into big business through their CSR programs for project financing. CSR programs represent a tiny part of what business can contribute
Enabling sustainable business models will mobilize significant investment from business – since this talks to their bottom line..
Projects
Sustainable Markets

6. How Does Business View Climate Change
Risk
Markets
Opportunities
Extreme weather and associated disease outbreaks disrupt business and destroys capital investments (Thailand’s floods 2011)
Stranded assets in oil, coal and natural gas (Investor Risk, lost jobs, lost business)
GHG emissions and air pollution can result in regulatory fines, and bad press
Consumers are demanding sustainable products
Driven by improved:
access to information on how products are made (internet)
Education regarding impacts of production
Global Brands are starting to drive GHG reductions across their supply chains
New markets with new players:
Wind, solar, battery storage
Zero emission vehicles
Autonomous aquatic robots for collecting ocean plastics
Product differentiation:
Blockchain & Supply chain finance (Traceability & Transparency)

7. Business Response Business can respond to climate change at 3 levels:
Corporate: focuses on all aspects of operations
Supply Chain: working with suppliers to manage their impacts
Sectoral: working with broad set of stakeholders to drive change
Corporate
Supply Chain
Sectoral

8. The Business Response (cont)
Many businesses are changing in their operations and driving reform in their supply chains.
The degree to which this is happening depends upon:
Business incentive: - how climate impacts profits
Capacity, resources and skills available to respond
External Support to navigate change
In this respect there have been some interesting innovations to how businesses are response to the climate challenge.

9. Collaborative Initiatives
BSR develops collaborative initiatives among multinationals trying to address climate change. A few examples include:
Green Freight Asia
Renewable Energy Buyers Alliance
Clean Cargo Working Group
Shippers and carriers in Asia committed to reducing GHG emissions (IKEA, DHL, Heineken, etc.)
Creating markets for renewable energy (63% of Fortune 100 companies have targets to reduce GHG emission or buy renewables)
Represents 85% of global freight carrying capacity. Its members are committed to reducing environmental impacts and GHG

10. Collaborative Initiatives & Government
While the resources of large companies are considerable, collaborative initiatives have also taught us that government support is crucial.
Many have benefited from donor support at start-up
Collaborations have helped identify opportunities where government interventions are required to create more sustainable markets.
REBA identifies regulatory barriers and other challenges to procure renewable energy.
GFA needs help reaching SMEs and creating financial incentives for fleet upgrades
Once these “barriers” are removed, the benefit of government support is the creation of a sustainable market driven by long term private sector investment

11. How Governments Can Support Sustainable Business
Governments successful in creating vibrant business environments do so by providing:
Clear streamlined policies and regulatory frameworks that align the work of ministries and send a clear, consistent signals to business.
Tax incentives and disincentives on products etc.
Subsidies for green businesses and removing perverse subsidies
Educate and raise awareness SMEs on climate change issues
Develop enabling infrastructure (smart grids, charge stations, etc) for new business
Work with banks to provide accessible financing that reduces risk
Eliminate corruption and increasing transparency
These measures have consistently been shown to encourage business investment by creating safe, sustainable markets

12. How Governments Can Partner With Business
Public Private Partnerships
Consultative Groups
Cross Hiring From Business
Design, Build, Operate, Decommission
Traditionally for infrastructure projects but are being adopted
Investigate challenges facing businesses by forming working groups with industry
Hire people from the private sector to increase your capacity and understanding of business issues
Developing Incubators For New Business
Collaborative Initiatives
Invent something new!
Create start-ups that contribute to climate resilience in your country
Support collaborative initiatives by addressing barriers identified that free up market investments
Challenging times require innovation. Don’t be afraid to try something new! 

13. The Bottom Line Successfully engaging business requires:
Speak their bottom line
Developing clear policies, regulations and incentives to support the development of sustainable markets
Proactively engaging business in multiple ways to develop trust, understanding, and drive innovation.
The Bottom Line

14. Parallel Sessions Climate Smart Investments – Alpha Room – GREEN
The Business of Climate Change – Beta 1 Room – PINK
Scaling-Up Climate Finance Readiness through Public-Private Partnerships – Beta 2 room- BLUE
Social Impact Investing – Delta Room – MINT
Green Finance – Epsilon Room – ORANGE
Risk Financing – Gamma Room - YELLOW