Pilot to increase private capital to deliver UN goals

A PILOT scheme to increase the flow of private sector capital to achieve the United Nations’ sustainable development goals is under development by the Edinburgh-based Global Ethical Finance Initiative.

It comes after a new report – a two-year collaboration between the United Nations Development Programme (UNDP) and the Scottish Government, with work led by the Global Ethical Finance Initiative and analysis conducted by merchant banking group RJ Fleming and Co – concluded that “business as usual” in the financial services sector will not deliver the 2030 target to achieve the global goals.

With sustainability and impact moving from specialist subjects to core drivers of investment strategies worldwide, the report identifies a private equity fund-of-fund solution that provides the required scale to attract new capital from institutional investors.

Detailed due diligence for the pilot scheme will involve fund managers, asset owners and specialist impact investors. It is due to be launched later this year as part of the build-up to the COP26 climate summit, now postponed until 2021.

Omar Shaikh, managing director of the Global Ethical Finance Initiative, said: “Having consulted almost 100 representatives from a crosssection of investment professionals and asset owners, representing total assets under management of over $21.5 trillion, we have undertaken one of the most comprehensive reviews of the appetite among the global investor community for supporting the SDGS and Esg-aligned investing.

“We have identified a longterm, private markets solution that we believe will remain attractive despite the economic downturn.”

The new independent managed platform, a global impact fund of funds, will fill the gap between specialist impact fund managers and mainstream investors, Mr Shaikh added.