Maximizing Impact

Rather than making their own decisions about where investments are needed, companies can use these national plans to prioritize their investments and maximize impact at the local level. SDG country plans can also inspire a collective effort by the private sector, increasing the scale and intensity of impact. For example, if a country has committed to climate mitigation through significant bolstering of solar-energy capacity, impact will be magnified when multiple companies invest in building solar-energy capacity in that country.

Maximizing Returns

Investing in accordance with countries’ SDG plans can also lead to better financial returns as the activities will likely receive direct or indirect support from the government in the form of incentives, subsidies, or favorable policies and regulations. In turn, this can lead to more stable and longer-term private-sector contribution to the SDGs.

Increasing Access to Finance

At a macro level, successful implementation of the SDGs can lead to a lower cost of capital in emerging and frontier markets as the SDGs address some of the same development and institutional gaps behind country risk premium. This not only lowers the cost of capital for local governments and companies, it can also allow the participation of institutional investors limited to investment-grade options.