Integrated National Financing Frameworks (INFFs)
UNDP recognises that financing the achievement of the SDGs will require finance to be mobilised from across public and private sectors, as well as from both international and domestic sources. As countries develop their next generation of Medium Term Development Plans in the final years leading up to 2030, we have a last chance to ensure that they are linked with comprehensive financing frameworks.
Launched in September 2018, SDG Impact is a UNDP flagship initiative that provides investors and businesses the clarity, insights, and tools required to strengthen and authenticate their contribution to achieving the SDGs. SDG Impact’s three interrelated pillars of work focus on overcoming barriers and making it easier for the private sector to invest in achieving the SDGs:
- Impact Management: SDG Impact provides investors with the means drive capital towards financial instruments, enterprises, and investments that help achieve the SDGs. The SDG Impact Standards for Private Equity, Bonds, and Enterprises instill a common framework and language for measuring, reporting on, and authenticating the SDG impact of investments. The Standards will be accompanied by online training in impact measurement and management, currently being developed in partnership with the Center for the Advancement of Social Entrepreneurship (CASE) at Duke University’s Fuqua School of Business. An assurance framework and third-party certification process that will offer certified investors an SDG Impact Seal are forthcoming in 2021. Read more about the Standards here
Impact Intelligence: SDG Investor Maps provide market intelligence to help private investors (funds, financiers, corporations) identify profitable investments that advance the SDGs. The SDG Investor Maps are produced by local teams at UNDP country offices and distill Investment Opportunity Areas and viable business models that respond to SDG needs and policy priorities in a given context, backed by actionable data on ticket size, return on investment, regulatory and policy contexts, risks, and potential SDG-impact. Findings from SDG Investor Maps will be made available as a public good to national and international investors and asset managers through a Global SDG Investment Platform, currently in development. Among the Finance Sector Hub’s Services for financing COVID-19 response and recovery, the SDG Investor Maps provide governments and private sector investors insights and concrete investment solutions with the potential to improve people’s lives and to contribute to the recovery and rebuilding efforts from the pandemic and its economic fallout.
Impact Facilitation: To foster matchmaking and collaboration towards SDG investment, SDG Impact convenes investors and policymakers in virtual Impact Facilitation events. By leveraging its public-sector networks, SDG Impact also works to nurture the success of investments and new businesses through public-private policy dialogues aimed at improving the environment for SDG-enabling investments. The cornerstone of SDG Impact Facilitation is a dynamic web platform: a user-friendly, dynamic online repository of public-source data and evidence on SDG-aligned investment opportunities and the regulatory and policy environments that facilitate investment.
Insurance and Risk Finance Facility
Insurance and Risk Finance Facilitybrings together UNDP’s work across risk finance, risk transfer, and the financing of resilience into a single strategy and set of tools, guidelines, and sources of support for country offices and programme countries.
Its overall vision is to use its engagement with the insurance industry (private, mutual and cooperative) to find, develop and implement innovative, scalable solutions to help countries tackle the intertwined challenges of poverty, vulnerability and risk.
UNDP’s current work in development includes housing insurance in small island developing nations, risk finance in central Asia, reef insurance in south-east Asia, and the world’s first SDG-focused reinsurance vehicle. Its first major investment is a partnership with the German Government and Insurance Development Forum to deliver inclusive insurance and sovereign risk finance solutions to 20 countries by 2025.
Five workstreams guide the work of UNDP’s Insurance and Risk Finance Facility, all of which are underpinned by investments in convening, leadership, governance, equality and empowerment, technology, and research and evidence.
- Inclusive Insurance: Inclusive-insurance is a critical way in which communities and households, especially the most marginalized, can access the protection and related benefits of the insurance sector. And more than that, inclusive-insurance has been proven to broaden financial inclusion, opening up opportunities for banking, pensions and related services.
- Sovereign Risk Financing: Building on decades of work at the country level helping countries manage and reduce all kinds of risk, this focuses on providing technical assistance to deliver risk-finance solutions (across development, recovery and humanitarian settings) working from deploying the risk modelling expertise of the insurance industry through to supporting governments to develop appropriate solutions for the transfer of risk.
- Natural Capital as a Protective Asset: This area of work matches the protective value of the world’s natural capital with the financial potential of investing in risk and resilience, and the decreasing of community vulnerability through investments in and protection of livelihoods.
- Insurance and Investment: This has two inter-related elements: firstly, engaging with the investment potential of industry and the US$33 trillion assets it has under management; and secondly, the mixing and matching of investment and risk transfer in the insurance initiatives developed and implemented.
- Integrating Insurance and Risk Financing into Development: This workstream is focused on integrating this expertise of industry in increasingly influential aspects of government and community life, planning and development. This means going beyond insurance and risk transfer products to integrate industry expertise into development planning and frameworks, from rural development to investment planning, from post-disaster needs assessments to Paris commitments, from community risk assessments to public financial management.
To deliver on this vision, running through all of UNDP’s work at the country level is both the development and deployment of specific insurance/risk transfer tools and products with partners, relevant to our partner countries and communities, with significant investment in long-term market transformation.
UNDP’s Insurance and Risk Finance Facility is implemented within a strong framework of partnership, with both high and technical leadership central to UNDP’s work within the Insurance Development Forum, InsuResilience Global Partnership and Ocean Risk and Resilience Action Alliance.
UNDP co-chairs the UN Secretary-General’s Task Force on Digital Financing of the SDGs that is tasked with developing a concrete, actionable set of recommendations on how to harness the digital revolution to advance the SDGs. UNDP is currently exploring the possibility of scaling up the work in digital finance, a new flagship, by developing a joint UNDP-UNCDF offer. Strengthening the existing expertise in building the digital governance have been identified as potential areas of work, together with nurturing an SDG aligned eco-fintech system and establishing an advisor network. Potential areas of work include:
- Governance for inclusive digital finance: building digital governance capacities, shaping new corporate governance forms, etc.
- Development of country and regional fintech ecosystems to nurture SDG-aligned eco-fintech systems, building local fintech start-ups, mapping SDG-anchored diagnostic of countries’ digital financing landscape.
- Leveraging innovations and opportunities, e.g. using e-strategies to accelerate the channeling of domestic savings into long term, domestic and regional investments.