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  • AutorenbildMako Muzenda

Multilateralism and Sustainable Investment


Multilateralism promotes cooperation between countries for mutual benefit. It is the founding principle of global systems and institutions such as the United Nations, mandated to maintain international peace and security and promote international cooperation to solve common problems. The 17 Sustainable Development Goals (SDGs) are an expression of this mandate. The success of the SDGs relies on collaboration and cooperation between member states. But multilateralism can be more than governmental cooperation. How can the private sector get involved in ensuring the success of the SDGs? And how does multilateralism foster responsible, sustainable investment practices?   


Firstly, multilateralism enables governments, financial institutions, and civil society to work together to establish frameworks and standards for responsible investment. Organisations such as the United Nations and its organs can develop and promote internationally recognized principles for responsible investing. Initiatives such as the UN Environment Programme Finance Initiative (UNEP FI) provide a framework for financial institutions to integrate environmental, social, and governance (ESG) factors into their decision-making. Created in 2003, UNEP FI is a global partnership between the United Nations Environment Programme (UNEP) and financial institutions ranging from commercial and investment banks to insurance and asset management companies. UNEP FI works with key places in the global financial sector to integrate environmental, social and governance (ESG) factors into their investment decisions. They have developed a series of tools and resources to help financial institutions implement sustainable investment practices, and they also convene conferences and workshops to share best practices. UNEP FI aims to create a level playing field and encourages a global shift towards sustainability, relying on mutual interests and cooperation to promote sustainable investment practices.  The European Commission’s International Platform on Sustainable Finance works in a similar fashion. It aims to mobilise private funding towards sustainable investments. Since its founding in 2019, the IPSF has grown to include 20 member countries across Africa, Asia and Europe.





The public-private relationship also leads to the creation and dissemination of knowledge about responsible investment practices. Multilateral cooperation can lead to the creation of robust reporting and disclosure frameworks. For instance, the Financial Stability Board's Task Force on Climate-Related Financial Disclosures (TCFD) provides a standardized approach for companies to disclose climate-related risks and opportunities. Established in 2020 by the G20 and the Financial Stability Board, the TCFD’s transparency helps investors make informed decisions and hold companies accountable for their environmental impact. 


Initiatives like UNEP FI and TCFD are gaining traction, with more investors incorporating ESG factors into their investment strategies. Engaging diverse stakeholders, including civil society and local communities, will broaden the scope and effectiveness of responsible investment practices. By harnessing the power of multilateralism, governments, private investors and banks can create a global investment landscape that prioritizes sustainability, creates shared prosperity, and builds a better future for all. 

 




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