Private capital can help make a difference

At theWorld Economic Forum AnnualMeeting in Davos, one key topic was the increasing importance of private rather than public capital in solving problems that don’t respect national boundaries.

To really make a difference, capital needs to be invested on a massive scale. TheUnitedNations’ Sustainable DevelopmentGoals are 17 challenging global targets for the year 2030 in areas such as education, healthcare, and the environment. To meet them will require as much as $5-7 trillion of annual investment, according to the Brookings Institute. This aim sounds almost insurmountable unless you consider that in 2015 households globally were worth $250 trillion, according to Deutsche Bank estimates.

Private investment alone cannot meet the Sustainable DevelopmentGoals— regulatory change, philanthropy, and public investment will also be required— but it will be a crucial source of capital.

And yet, our research shows that most initiatives around Sustainable DevelopmentGoals funding gaps have not included a specific focus on private wealth. Obstacles to attracting private wealth include: data around the Sustainable DevelopmentGoals funding gaps, which must be improved, centralized, and made more transparent; terms and disclosures on investments related to the Sustainable DevelopmentGoals, which have yet to be standardized; a dearth of investment networks related to the Sustainable DevelopmentGoals, which should be developed to connect investors with opportunities; and projected financial returns, which need to be upgraded if they are to sustain private investors’ interest.

Private investment alone cannot meet the Sustainable Development Goals— regulatory change, philanthropy, and public investment will also be required— but it will be a crucial source of capital.