Sustainable Development Goals: Harnessing Business to Achieve the SDGs through Finance, Technology and Law Reform

Achieving the Sustainable Development Goals through Finance, Technology and Law Reform Achieving the SDGs requires a fundamental rethink from businesses and governments across the globe. To make the ambitious goals a reality, trillions of dollars need to be harnessed to mobilise finance and accelerate progress towards the SDGs. Bringing together leaders from the World Bank, the financial and business sectors, the startup community and academia, this important, topically relevant volume explains what the SDGs are, how they came about and how they can be accelerated. Real-world case studies and authoritative insights address how to direct investment of existing financial resources and re-align the global financial system to reflect the SDGs. In depth chapters discuss how financial institutions, such as UBS Wealth Management, Manulife Asset Management and Moody’s Rating Agency are supporting the SDGs. The opportunities arising from Blockchain, Big Data, Digital Identity and cutting-edge FinTech and RegTech applications are explored, whilst the relevance of sustainable and transparent global supply chains is underscored. Significant attention is paid to law reform which can accelerate progress of the SDGs through SME Financing, Crowdfunding, Peer-to-Peer Lending and tax restructuring. To achieve the ‘World We Want’, much needs to be done. The recommendations contained within this book are critical for supporting a fundamental shift in thinking from business and governments around the world, and for building a more just and prosperous future for all.

Table of Contents:
About the Editors xvii Notes on Contributors xix Foreword xxix Foreword: Implementation of the SDGs xxxi Preface xxxv Introduction 1 Part One: Overview and Context 9 Part Two: Where Will the Money Come From? Financing the SDGs 10 Part Three: Technology, Innovation, and Entrepreneurship 12 Part Four: Facilitating the SDGs by Legal Infrastructure Reform 15 Part I Overview and Context 17 1 The UN and Goal Setting: From the MDGs to the SDGs 19 Alma Pekmezovic Introduction 19 What is Development? 20 Is There a Right to Development? 22 Measuring Economic Development 22 Measuring Non-Economic Aspects of Development 23 The Sustainable Development Goals (SDGs) 24 Situating the SDGs in the International Legal Framework 28 Theories of Development: Towards a New Theory of Sustainable Development 29 Economic Theories of Development 30 Cultural Theories of Development 30 Geographic Theories of Development 31 Institutional Theories of Development 32 A New Theory of Sustainable Development 34 Measuring Progress Towards the SDGs 34 Conclusions 35 2 SDGs and the Role of International Financial Institutions 37 Suresh Nanwani Introduction 37 Response and Implementation of the SDGs by IFIs 38 Project Processing and Actions Taken by IFIs to Implement the SDGs, and Responses from Other Development Actors 44 Conclusion and Recommendations for IFIs to Meet SDG Goals and Targets 48 3 Towards a New Global Narrative for the Sustainable Development Goals 53 Iason Gabriel and Varun Gauri Introduction 53 How SMART Are the SDGs? 55 Goals That Stretch 59 Goals That Inspire 62 Sloganising the SDGs 64 Towards a New Global Narrative? 66 Conclusion 69 4 Overcoming Scarcity: The Paradox of Abundance: Harnessing Digitalisation in Financing Sustainable Development 71 Simon Zadek Scarcity: The Paradox of Abundance 71 Financing: A Systemic Challenge 72 Action on System Design 74 Digital Financing of the SDGs 76 Dilemmas: Digitalisation and Dark Financing 80 Sizing the Prize 82 What Next? 84 Concluding Comments 85 Part II Where Will the Money Come From? Financing the SDGs 87 5 The New Framework for Financing the 2030 Agenda for Sustainable Development and the SDGs 89 Alma Pekmezovic Introduction 89 Sources of Development Finance 90 Domestic Public and Private Sources 90 Domestic Resource Mobilisation (DRM) 90 International Public and Private Finance 93 The Role of International Official Development Assistance (ODA) 94 Private Philanthropy 95 Sovereign Wealth Funds, Pension Funds, Insurance Companies, and Investment Funds 96 Barriers to Greater Private Investment 97 The Role of Private and Blended Finance in Development 98 The Development Impact and Risks of Blended Finance 100 An Overview of Blended Finance Mechanisms 101 Innovative Financing Tools: Social Impact Bonds (SIBs) and Development Impact Bonds (DIBs) 102 Best Practices for Engaging the Private Sector 105 Conclusions 105 6 The Contribution of the International Private Sector to a More Sustainable Future 107 Martin Blessing and Tom Naratil Ready and Able to Invest 108 Commercial and Investment Benefits 109 What is Needed to Mobilise Private Sector Money? 110 Partnerships for a More Sustainable Future 112 Partnerships to Rationalise Sustainable Investment Markets 112 Partnerships to Democratise Sustainable Investment Markets 116 7 Re-Orienting the Global Financial System Towards Sustainability 121 Alma Pekmezovic Introduction 121 Background 123 The Legal and Regulatory Framework 125 Company Reporting: Sustainability Disclosure Requirements 128 Institutional Investors: Responsible Investing and Investing for Impact 132 Fiduciary Duties of Institutional Investors and Other Financial Intermediaries 136 Fostering Long-Term Sustainability 140 Conclusion 142 8 How Asset Managers Can Better Align Public Markets Investing with the SDGs 143 Emily Chew and Margaret Childe Why the SDGs Could Transform Sustainability Investing 143 Implementing the SDGs as an Analytical Framework to Align Investing with the SDGs 145 Objectives of Manulife Investment Management’s Approach to SDG-Aligned Investing 145 SDG Assessment Methodology Overview 147 Investable Themes 147 SDG Alignment Assessment 150 Exclusions 152 Applying the SDG Analytical Framework to the S&P 500 Index 152 The Current State of Corporate Goals with Respect to SDG Impact 153 The Current Opportunity Capture of SDG-Related Profit Opportunities 156 Areas in which Corporate Operational Conduct is Most Strongly Aligned with SDG Impact 159 What SDG Developments Can We Expect in the Public Markets Investor Community in 2020 and Beyond? 161 SDG-aligned Investing is Expected to Become Easier 162 Corporate Reporting on the SDGs Will Improve 163 Constructive Dialogue or Engagement with Companies is Necessary to Achieve the SDGs 163 A Call to Action 164 Disclaimer 165 9 The Significance of Sustainable Development Goals for Government Credit Quality 167 Alastair Wilson Environmental Preservation Influences Credit Quality, Including Through the Impact of Climate Change on Growth and Institutions’ Resilience to It 168 Social Risks Such as Poverty and Inequality Feed into Economic and Institutional Strength 170 Strong Institutions Are Closely Related to Ratings and Ratings Factors 174 SDGs Influence Government Credit Quality Through Different Channels, to Varying Degrees 176 Part III Technology, Innovation, and Entrepreneurship 177 10 FinTech for Financial Inclusion: Driving Sustainable Growth 179 Dirk A. Zetzsche, Ross P. Buckley, and Douglas W. Arner Introduction 179 Financial Inclusion and Sustainability: Introducing the Long-Term Perspective 180 Financial Inclusion: Why It Matters 180 Two Sides of the Same Coin 181 FinTech as a Tool for the SDGs 181 FT4FI Initiatives 183 Four Pillars of Digital Financial Transformation 184 Experiences and Lessons 184 Financial Inclusion Initiatives Since 2008: G20 184 Financial Inclusion Initiatives Since 2008: AFI 185 FinTech and Financial Inclusion: The Foundation of Digital Financial Transformation 185 Pillar I: Digital ID and eKYC: Establishing the Foundation 186 Example: The Indian Aadhaar System 186 IrisGuard 187 Regional Approaches: eIDAS in the EU 188 eKYC and KYC Utilities 188 Example 1: South Africa Web-Based KYC Database 188 Example 2: India’s e-KYC System 188 Example 3: eIDAS and eKYC 189 Synthesising the Lessons 189 Pillar II: Open Electronic Payment Systems: Building Connectivity 189 Mobile Money 190 Designing Regulatory Infrastructure for an Open Electronic Payments System 191 Pillar III: Account Opening and Electronic Government Provision of Services: Expanding Usage 192 Electronic Payment: Government Salaries and Transfers 193 Electronic Payment and Provision: Other Core Services 194 Pillar IV: Design of Financial Market Infrastructure and Systems: Enabling New Wider Development 195 Transforming Credit Provision: From Collateral and Microfinance to Cash Flow 195 Adding Insurance and Investments to Savings and Credit 196 M-Akiba 197 Building Better Financial Infrastructure 198 The EU Example: GDPR, PSD2, MiFID2 198 Developing a Comprehensive Strategy 198 Strategic Approach 198 The Challenge of Technology 198 Regulatory Sandboxes, Piloting, and Test-and-Learn Approaches 199 Balancing Inclusion with Other Regulatory Objectives 201 Designing Regulatory Systems: The Example of Mexico 201 Towards Inclusive and Sustainable Growth 202 11 Financing and Self-Financing of SDGs through Financial Technology, Legal, and Fiscal Tools 205 Jon Truby Introduction 205 Self-Sufficient Financing and Achievement of SDGs through Tax Reform 207 Shifting the Tax Burden to Create a Double Dividend 207 Base Erosion and Digital Services Taxation 208 Digitisation of Tax Administration 209 Amendment of the Chicago Convention 210 Self-Sufficient Financing of SDGs through Financial Technology 212 Digitisation of Money 212 Digital Identity 214 Financing SDG 7 and Related Goals through Financial Technology 215 Offsetting Investments in Energy-Intensive Digital Currencies 215 Digital Token Investments 216 Conclusion 217 12 SDG Challenges in G20 Countries 219 Guillaume Lafortune and Guido Schmidt-Traub Introduction 219 The SDGs as Problem-Solving Tools for Transformative Actions and Policies 229 Long-Term Planning and Back-Casting 230 Data and Monitoring 231 Financing 232 Technology Missions 233 Conclusion 234 13 The Future-Fit Business Benchmark: Flourishing Business in a Truly Sustainable Future 235 Geoff Kendall and Martin Rich Introduction 235 The Journey Ahead 236 The World We Want 236 The World We Have (and How We Got Here) 236 The World We Can Create 238 Why a Systems View is Good for Business 240 A Star to Steer By 243 Current Assessment Methods Are Flawed 243 Starting with the End in Mind 244 How Much is Enough? 244 A Holistic View of Future-Fitness 245 A Practical Tool 246 Future-Fit Break-Even Goals 246 Future-Fit Positive Pursuits 248 Engaging Stakeholders More Effectively 250 Conclusion 251 14 Financing for Youth Entrepreneurship in Sustainable Development 253 Inna Amesheva, Alex Clark, and Julian Payne The Role of Young Entrepreneurs in Sustainable Development 253 The Needs of Young Entrepreneurs Working on the SDGs 254 Barriers to Innovation and Scale 254 Supporting Young Entrepreneurs Working on the SDGs 257 The Financing Options Available to Young Entrepreneurs Working on the SDGs 258 Sources and Instruments of Finance for Young Entrepreneurs 259 Bridging the Gap Between Young Entrepreneurs and the SDGs 262 Sectoral Coverage 262 Geographical Coverage 264 Beyond Banks: Alternative Financial Structures for Youth-oriented Sustainable Development Initiatives 266 Prioritising Financial Interventions for Youth Entrepreneurs and the SDGs 267 Non-financial Services 268 Developing a Robust Investment Pipeline 270 Designing Youth-focused Funding Vehicles for the SDGs 271 15 Transparency in the Supply Chain 275 Julia Walker Introduction 275 Supplier prequalification tools 279 Emerging Technology in Supply Chains 281 The diamond industry 282 Summary 284 Part IV Facilitating the SDGs by Legal Infrastructure Reform 285 16 Facilitating Sustainable Development Goal 8 by Legal Reform Measures 287 Gordon Walker Introduction 287 Contextual Issues 288 Legal Traditions 288 Regulators and Policymakers 289 Implementation Problems 290 Capital Formation for Micro-, Small-, and Medium-Sized Enterprises 291 Meta-Strategy: The Promise of e-Government 291 The SDGs and Domestic Policy Formation 292 Facilitating SDG 8 by Law Reform 293 Hong Kong 293 Fundraising Law in Hong Kong: A Brief Overview 294 Safe Harbours in the 17th Schedule of CWUMPO 295 ECF and P2PL in Hong Kong 296 Supporting FinTech and MSME Fundraising Solutions in Papua New Guinea 297 Survey of Papua New Guinea Legislation 297 Offers Excluded from the Prospectus Requirements: CMA, Schedule 6 298 Issues Excluded from the Prospectus Requirements: CMA, Schedule 7 299 Securities Commission Power to Amend Schedules: CMA, Section 470 299 Legal Reform Opportunities for ECF and P2PL in PNG 299 Conclusion 300 17 Facilitating SDGs by Tax System Reform 303 Benjamin Walker Introduction 303 Sustainable Development Goals 304 Goal 3: Good Health and Well-Being 304 Goal 8: Decent Work and Economic Growth 304 Goal 10: Reduce Inequality within and among Countries 305 Goal 12: Ensure Sustainable Consumption and Production Patterns 307 Goal 16: Peace, Justice and Strong Institutions 308 Goal 17: Strengthen the Means of Implementation and Revitalize Global Partnership for Sustainable Development 309 A Wider Picture of Development 310 Taxes and Economic Development 310 Tax Effort 311 Taxes and Spending 312 Taxes and Technology 313 Blockchain 313 Artificial Intelligence 314 Tax Law Reform 314 Recent Developments 316 Conclusion 316 18 Facilitating the SDGs by Competition and Consumer Law and Policy Reform: Aspirations and Challenges in Papua New Guinea 317 Brent Fisse Introduction 317 Proposed PNG Competition and Consumer Reforms and SDGs 318 Tailoring Law and Policy to the Particular Needs and Circumstances of PNG 320 Removing Statutory and Regulatory Barriers to Entry 322 Designing Competition Rules That Are Practical and Avoid Excessive Technicality 324 Harnessing Consumer Protection Laws to Protect and Promote Small Business 327 Using Enforcement Mechanisms That Have Some Chance of Working in PNG 329 Conclusion 331 Resolution Adopted by the General Assembly on 25 September 2015 333 Transforming Our World: The 2030 Agenda for Sustainable Development 333 Preamble 333 People 334 Declaration 335 Introduction 335 Our vision 336 Our shared principles and commitments 336 Our world today 337 The new Agenda 339 Means of implementation 344 Follow-up and review 346 A call for action to change our world 347 Sustainable Development Goals and targets 347 Goal 1. End poverty in all its forms everywhere 349 Goal 2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture 350 Goal 3. Ensure healthy lives and promote well-being for all at all ages 351 Goal 4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all 352 Goal 5. Achieve gender equality and empower all women and girls 353 Goal 6. Ensure availability and sustainable management of water and sanitation for all 354 Goal 7. Ensure access to affordable, reliable, sustainable and modern energy for all 354 Goal 8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all 355 Goal 9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation 356 Goal 10. Reduce inequality within and among countries 357 Goal 11. Make cities and human settlements inclusive, safe, resilient and sustainable 357 Goal 12. Ensure sustainable consumption and production patterns 358 Goal 13. Take urgent action to combat climate change and its impacts 359 Goal 14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development 360 Goal 15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss 361 Goal 16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels 362 Goal 17. Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development 363 Finance 363 Technology 363 Capacity-building 364 Trade 364 Systemic issues 364 Means of implementation and the Global Partnership 365 Follow-up and review 369 National level 371 Regional level 372 Global level 372 Index 375

About the Author :
JULIA WALKER is a senior global business executive with 20 years experience in the private sector principally in finance, technology, and risk management. She currently runs market growth and strategy in Asia for one of the world's largest providers of financial markets data, Infrastructure, and Risk Intelligence and is a member of the United Nations Secretary General's Task Force of Digital Financing of the Sustainable Development Goals. DR ALMA PEKMEZOVIC is a consultant to the Asian Development Bank, Sydney, Australia. Her key areas of expertise include capital markets law, corporate law and governance, and commercial law reform. During 2006 to 2015, Dr. Pekmezovic taught corporate and commercial law at La Trobe University School of Law, Melbourne, Australia. She was formerly a Lecturer in Law at Bucerius Law School in Hamburg (2015–2018) and a Visiting Research Fellow at the Max Planck Institute for Comparative and International Private Law in Hamburg, Germany. DR GORDON WALKER SJD (Duke) is an Emeritus Professor of La Trobe University; Adjunct Professor at Curtin University School of Law; Visiting Professor, University of Padua Law School, Italy; and an advisor to the Asian Development Bank (ADB) designated as International Business Law Expert and International Financial Sector Expert. His research contracts at the ADB principally involve law reform in the areas of securities regulation, company, secured transactions and FinTech within the Private Sector Development Initiative (PSDI-III) in the South Pacific.