The 17 solutions to the world's greatest challenges
The 17 solutions to the world's greatest challenges
The year 2019 shone an intense spotlight on one global issue – climate change – with activists such as Greta Thunberg, pictured above, reaching vast audiences and galvanising protests worldwide. During 2020, which will see Glasgow hosting the UN's climate summit, the subject is likely to remain high on the global agenda.
While climate change touches on many of United Nations' ambitions to build a more sustainable future for the world, the organisation's 17 Sustainable Development Goals embrace a wider range of social and environmental issues.
In order to understand the role of the United Nations Sustainable Development Goals we need to look back to the year 2000 when global leaders reached agreement to implement eight goals – the Millennium Development Goals – designed to end extreme poverty.
In the following 15 years the mobilisation of governments, businesses, international institutions and local non-governmental groups proved that collective global action could make a significant difference. Halving extreme poverty and child mortality, giving two billion more people access to clean water and sanitation, and providing education to 43 million more children were just some of the notable outcomes.
Whilst arguably the most successful anti-poverty movement in history, the implementation of the Millennium Development Goals left some gaps. Various assessments of their success have repeatedly shown that the very poorest – and those disadvantaged because of gender, age, disability or ethnicity – were often bypassed by the initiatives.
In 2015 an estimated 700 million people were still living on less than $1.25 per day. At the same time the world's climate crisis was intensifying.
A global to-do list
To address these interconnected and complex environmental and social issues the Millennium Development Goals were replaced in 2016 by the UN Sustainable Development Goals. These 17 goals aimed to establish a pathway to global sustainable development: together they would reduce inequalities, finally bring an end to extreme poverty and ultimately protect the environment.
During that year at the UN Conference of Parties The Paris Agreement was signed, setting an intention to strengthen the global response to the threat of climate change. The aim was to limit a global temperature rise this century to less than two degrees celsius above pre-industrial levels.
In 2016 the combination of the 17 UN Sustainable Development Goals and The Paris Agreement created a global “to do list” of the collective action required.
The cost of success
The estimated annual capital required to achieve the UN Sustainable Development Goals is $5-$7 trillion. In addition there is an estimated $120 trillion total cost to fund the global energy transition (viewed as essential for success in addressing climate change). With just $1 trillion per year coming from governmental sources, plugging the yawning gap in funding falls to investors.
It is this acknowledgment of the critical role that capital markets play in determining success which defines the difference between the previous and current UN sustainable development agenda.
Looking forward to 2030 and 2050, the question is how we can allocate capital to ensure that “ours can be the first generation to end poverty – and the last generation to address climate change before it is too late”, in the words of former UN Secretary General Ban Ki-moon.
What elements of the UN Sustainable Development Goals are “investable”?
Given the requirement for private markets to provide much needed capital it is important to understand what elements of sustainable development are “investable”. In other words, what can we invest in which provides us with two returns: an acceptable financial one as well as a measurable social or environmental outcome?
Each of the 17 UN Sustainable Development Goals has its own targets and indicators of success. It is estimated that of the 167 underlying targets, less than half can be advanced with investment. Therefore whilst the UN SDGs provide a framework for us to allocate capital, success will ultimately be reliant upon continued collective action by businesses, governments, philanthropists and other stakeholders.
Interaction between the goals
An additional complexity is that the goals are interconnected in both positive and negative ways. A positive improvement in one goal can further others. For example improving agricultural practices, essential for achieving SDG2 (zero hunger), has a positive impact on achieving success within SDG15 (life on land), of which one target is ending deforestation.
Unfortunately the reverse is true and individual goals can have a negative impact upon each other.
Climate change, encapsulated in SDG13, for example, impacts negatively upon every goal from food security (SDG2) to water scarcity (SDG6) or the negative effects of ocean acidification on marine life (SDG14).
We cannot hope to achieve SDG1 (no poverty) if we do not take urgent action to limit global warming. The majority of the world’s population, who experience the effects of climate change, are often those living in extreme poverty. They face entrenched deprivation made worse due to their vulnerability to natural disasters, which can exacerbate poverty.
From 1998-2017 the economic cost of disasters (of which climate change accounted for 77%) was estimated at $3 trillion. The social costs were also staggering with more than 90% of deaths reported internationally due to disaster events in low to middle income countries.
There remains vast work to do, but also a range of investable opportunities linked to SDG13, arguably the most critical UN Sustainable Development Goal of all.
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