On Sept. 24, 2018, UNCDF launched an Exchange-Traded Fund (ETF) (symbol SDGA) with Impact Shares, a non-profit fund manager supported by the Rockefeller Foundation. UNCDF is also pleased to partner with two other industry-leading firms in this product offering. The index is a proprietary product of Sustainalytics – the leading independent global provider of economic, social and governance (ESG) and corporate governance research and ratings to investors – and Morningstar. “Our aim,” says Karl,” is to demonstrate that underserved markets can offer viable investment opportunities for the private sector.”
Achieving the SDGs by 2030 would add an estimated $12 trillion to the global economy, according to the Business and Sustainable Development Commission.
Keeping It Local And Sustainable
A big concern for all investors is knowledge of local markets. UNCDF began using impact measurement systems over 15 years ago, and Karl believes this expertise will support their ETF partners to monitor impact down to the household level in local LDC communities where products and resources are deployed. A few of the metrics they use include stability and resilience, resource profile, impactful education, entrepreneurship, and risk management. “Our experience in these communities helps to understand the points of leverage to effect change in long-held attitudes in the homes and small business communities,” says Karl. “For example, in many cultures providing vehicles to help women exercise financial agency is about empowerment, which enables households and enterprises in financially underserved communities to make choices for themselves.”
UNCDF’s local knowledge and reach in 30 of the 47 LDC countries will also help sustainability-focused companies and investors scale up. UNCDF can assist in opening new markets and investment opportunities for partners, including replication across more institutions, populations, geographic locations and countries.
So, who will Judith Karl and UNCDF partner with next? “The urban agenda is a massive challenge for waste management, clean water, transportation, energy supply and efficiency, among other issues where financial solutions are lagging behind,” she says. “We will launch a municipal financing fund in 2019 with a specific focus on SDGs for investors.”
A few weeks after I spoke with Karl, on Nov. 21, 2018, UNCDF announced the launch of Expressions of Interest (EOI) in fund management for the International Municipal Investment Fund (The Fund). The Fund is sponsored by UNCDF and the United Cities and Local Governments (UCLG). It originated from the Malaga Global Coalition for Municipal Finance. The Fund aims to support local governments in the implementation of the 2030 Agenda for Sustainable Development by specifically focusing on SDG 11 (Sustainable Cities), SDG 13 (climate change, including meeting The Paris Agreement), and SDG 17 (global partnerships, including viewing local governments and municipalities as key players in the means of implementation).
Paul Ellis founded Paul Ellis Consulting to work with financial advisors who want to integrate sustainable and impact investment strategies for their clients.