Locations“Future Trends in Accounting, Finance, and Governance in Climate Change” workshop highlights opportunities and issues with sustainable financing
August 21, 2023
A workshop on “Future Trends in Accounting, Finance, and Governance in Climate Change” was held on 16 August in Istanbul, Türkiye, in collaboration with the Istanbul Chamber of Commerce Centre for Strategic Research (ITOSAM). The UNDP ICPSD contributed to the Academy of Sustainable Finance, Accounting, Accountability, and Governance (ASFAAG) MENA Chapter’s workshop by participating in focused discussions on sustainable finance topics and by presenting its work in the field of impact investing.
During the workshop, UNDP ICPSD highlighted the estimated US$4.2 trillion annual gap in SDG financing in developing countries and noted that aligning just 1 percent of global wealth with the SDGs could bridge this gap. The presentation also highlighted the importance of impact investing as a viable solution to channel much-needed financing for social and environmental benefits, referencing the $1.164 trillion worth of impact assets under management in 2022.
The workshop brought together academics, practitioners, and policymakers from institutions including UNDP, the Organisation of Islamic Cooperation, Türkiye Wealth Fund, and the Istanbul Development Agency for discussions around sustainable finance, accounting, accountability, governance, and possible collaboration areas. The discussions underlined the significant gap in impact investment between developed and emerging markets, particularly in the MENA region. Mr. Charles Selestine, Islamic Finance Impact Investing Portfolio Lead at UNDP ICPSD, said:
“81 percent of organizations deploying an impact investing strategy are headquartered in North America and Europe, while only 2 percent of these organizations base their headquarters in the MENA region. Organizations based in the MENA region account for only 1 percent of the impact assets under management allocated globally, compared to 92 percent by organizations headquartered in developed markets.”
The presentation listed the main challenges to growing impact investment in the least-developed countries and developing countries, which include a lack of awareness and capacity around how to structure impact investments and a lack of appropriate financial instruments and high-quality investment options with track records across the spectrum of risk and return expectations by investors. Additionally, the presentation addressed insufficient legal and regulatory frameworks around impact investment, as well as the need for effective policy incentives to mobilize private sector resources, and investors’ and impact enterprises’ limited capacities in impact measurement and management. Further, UNDP ICPSD drew attention to the issue of ‘impact washing’ and highlighted UNDP’s SDG Impact Standards as a useful tool for enterprises, bond issuers, and private equity funds to develop their strategies, transparency, management approach, and governance.
Under its impact investing workstream, UNDP ICPSD conducts research, capacity-building, and advocacy activities to address these challenges. Among these, SDG Investor Maps guide investors towards opportunities aligned with national strategic priorities in countries including Morocco, Türkiye, and Ukraine, whilst Investor Convenings foster collaboration and partnerships around sustainable finance in Djibouti, Mauritius, and Tanzania.
Additionally, UNDP ICPSD and Islamic Development Bank’s (IsDB) joint initiative, the Global Islamic Finance and Impact Investing Platform (GIFIIP), supports green Sukuk issuances in OIC countries, promotes Islamic fintech solutions for the least-developed countries, and provides technical assistance and capacity-building on Islamic finance and impact investing in Afghanistan, Bangladesh, Djibouti, and Uzbekistan.
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For more information:
Charles Selestine, Islamic Finance Impact Investing Portfolio Lead at UNDP ICPSD. Email: charles.selestine@undp.org
Özge Aksaray, GIFIIP Communications Assistant. Email: ozge.aksaray@undp.org
Gergana Georgieva, UNDP ICPSD Communication Consultant. Email: gergana.georgieva@undp.org