This is an excerpt from the UBS white paper: Mobilizing private wealth for public good.
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Private wealth alone cannot fulfil all of the SDGs. For one, the estimated annual investment needed to meet these goals (about USD 5-7trn a year or 7-10% of global GDP) is too much to fall on private investors’ shoulders alone.
Quality and efficiency of investment varies significantly across public, not-for-profit, and for-profit investors. And some of the economic problems that the SDGs are looking to solve can’t be remedied through more investment - some SDGs need regulation changes to capture long-term costs better, or to break down inefficiencies.
So taking these factors into account, UBS analyzed all 17 SDGs and asked the question: where would private wealth capital have the most potential impact in helping plug SDG funding gaps?
Private investment is more likely to yield positive results for goals where it’s possible to make a market or attach a market price to capital (whether physical, environmental, or human). Private wealth can be best deployed for SDGs such as good health and well being; quality education; industry, innovation, and infrastructure; and affordable and clean energy. The goals of climate action and zero hunger need a mix of both public/not-for-profit capital (like philanthropic funds) as well as private, for-profit investment.
There are some goals where it would be difficult to engage private, for-profit capital. This applies to SDGs that look to provide a public good where there is no market price. And there are some areas where regulatory change is most needed to help fulfil the SDGs. For instance, it would be difficult to achieve the SDGs of responsible consumption by investment alone. Additionally, achieving the peace, justice, and strong institutions SDG more likely needs law, policy or rule changes rather than (or before) higher levels of investment.
So private wealth, whether philanthropic or for-profit, has a key role to play in funding the SDGs. Certain SDGs are better suited to private investment involvement than others.
Private wealth, whether philanthropic or for-profit, has a key role to play in funding the SDGs.
Breaking down the barriers to private wealth funding for SDGs
Before making recommendations about how to remove the obstacles preventing greater private wealth engagement in funding the SDGs, it’s important to understand in more detail what the barriers really are.