Unlocking Capital Markets to Finance the SDGs

The report argues that while global bond and equity markets hold $185 trillion in value, their potential to finance the SDGs is hindered by a lack of common definitions for material information and impact measurement. It proposes that digitalization—specifically AI, machine learning, and distributed ledger technology—can bridge these gaps by providing reliable data for financial models. The authors recommend evolving the definition of material information to include SDG-linked disclosures and establishing a common taxonomy for impact measurement to increase capital flows toward sustainable investments.

• Global capital markets possess significant scale to finance the SDGs, with the combined outstanding value of global bond markets (over $100 trillion) and global equity market capitalization ($85 trillion) totaling $185 trillion.
• There is a substantial funding gap for the SDGs, with an estimated annual investment requirement of $5-7 trillion and a need for over $25 trillion in additional capital for developing economies over the next decade.
• A primary impediment to SDG financing is the absence of a common definition of material information that includes SDG-linked disclosures, which can lead to mis-priced risk and return analyses in financial models.
• The investment community lacks a shared taxonomy and consensus on how to define and measure 'impact,' which adds complexity to the investment process and deters targeted SDG-aligned investment.
• Digitalization, including AI, machine learning, and distributed ledger technology (DLT), is identified as a catalyst for improving risk analysis and the structuring of complex finance.
• There is a tension between long-term SDG goals and short-term financial incentives, as many asset managers are evaluated on annual cycles despite having long-term return mandates.
• Sustainable investing is growing, with investments under a sustainability mandate surpassing $30 trillion in 2018, driven in part by generational shifts, as 64% of millennials view ESG issues as important in investing decisions.
• The report recommends that standard-setting bodies (such as SASB, IFRS, and the SEC) and convening bodies (such as the UN and WEF) collaborate to evolve the definition of material information and create a common impact measurement framework.

APA

World Economic Forum (2019). Unlocking Capital Markets to Finance the SDGs. http://www3.weforum.org/docs/WEF_Unlocking_Capital_Markets_to_Finance_the_SDGs_2019.pdf

Chicago

World Economic Forum. Unlocking Capital Markets to Finance the SDGs. 2019. http://www3.weforum.org/docs/WEF_Unlocking_Capital_Markets_to_Finance_the_SDGs_2019.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Unlocking Capital Markets to Finance the SDGs |date=September 2019 |url=http://www3.weforum.org/docs/WEF_Unlocking_Capital_Markets_to_Finance_the_SDGs_2019.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2019unlocking, author = {{World Economic Forum}}, title = {{Unlocking Capital Markets to Finance the SDGs}}, institution = {World Economic Forum}, year = {2019}, month = sep, url = {http://www3.weforum.org/docs/WEF_Unlocking_Capital_Markets_to_Finance_the_SDGs_2019.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }