It’s a formidable undertaking: Globally, as much as $7 trillion a year in investments will be needed to achieve the Sustainable Development Goals by 2030 — including up to $4.5 trillion in developing countries. But along with the massive costs come massive opportunities.
Businesses stand to gain at least $12 trillion a year in market opportunities by adopting sustainable practices and contributing in other ways to achieving the goals, according to the Business & Sustainable Development Commission. Surveys show businesses see many compelling reasons to boost their performance on sustainability — customers and employees expect it, regulators and investors demand it.
Emerging markets have joined the push toward sustainability as well. The first Global Progress Report of the IFC-supported Sustainable Banking Network shows that emerging markets have become a major force in driving development and fighting climate change: Thirty-four emerging-market countries have initiated banking reforms to expand sustainable lending.
Those 34 countries account for $42.6 trillion in bank assets — more than 85 percent of total bank assets in emerging markets — and all have made progress in advancing sustainable finance. Reforms implemented require banks to assess and report on environmental and social risks in their lending operations and put market incentives in place for banks to lend to green projects.
For more than six decades, IFC has led the way in helping businesses become more sustainable. The IFC Performance Standards (see page 102 of the 2108 Annual Report PDF) have become a global benchmark for sustainability practices. With these as a guide, our clients can craft business solutions that are as good for communities and the environment as they are for the bottom line.
Fifteen years ago, IFC’s environmental and social safeguards inspired the Equator Principles — the beginning of rigorous environmental and social standards for investment projects in the international banking industry. Today, 94 financial institutions in 37 countries have adopted the principles. Other leading development institutions — including the European Bank for Reconstruction and Development and the Asian Development Bank — have adopted practices rooted in our standards. In addition, our Corporate Governance Methodology (see page 103 of the 2018 Annual Report PDF) has been adopted by 35 development finance institutions.
Our push for green buildings continues. In Indonesia — a leading emitter of greenhouse gases — we joined with local architects and construction companies to promote green initiatives in new housing projects. This will help cut annual greenhouse emissions by 1.2 million metric tons, avoid 500 megawatt-hours of energy use, and save almost $200 million per year by 2021.
This year, we launched the Disclosure and Transparency Toolkit, an ambitious effort to create environmental, social, and governance principles for capital markets. Global stock exchanges, regulators, investors, and development and donor organizations see the toolkit as important guidance for developing countries to use in advancing transparency in their capital markets.