S. Chebanov (email@example.com),
Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO), 23, Profsoyuznaya Str., Moscow, 117997, Russian Federation
The paper examines the potential role of sovereign wealth funds (SWFs) in implementation of the UN-initiated 2030 Agenda for Sustainable Development, in particular, the Sustainable Development Goals relating to combining long-term growth of global economy with protection of the Earth’s environment, i. e. the creation of low-carbon (colloquially “green”) economy. By definition, such a transition is highly capital-intensive, thus demanding mobilization of all available sources of financing. SWFs as state-run investment vehicles are among the most prospective ones. In recent decade, they noticeably strengthened their role in the world economy. SWFs proved to be the fastest growing group of institutional investors. Their cumulative AUM was estimated at around 7.4 Billion US dollars as of early 2018. By now, the world’s leading SWFs from Norway, China, Singapore, Persian Gulf and some other states evolved into full-fledged market-driven investors with an active portfolio management strategy. In the conditions of current economic and geo-political turbulence SWFs show growing interest to the opportunities of “green” financing while seeking for viable alternatives to the increasingly fading traditional fixed-income instruments. However, the scale of SWFs’ involvement in the creation of global “green” economy is still rather tiny as compared to the needs of respective investments, the activities of private business, as well as to the state funds’ own financial capabilities. While considering the reasons of current situation and the prospects of its improvement the author argues that a massive “greening” of SWFs’ investment strategies can (and should) be triggered by powerful political push from the respective national governments, namely, by major legal re-formatting of their mandates in the light of the Sustainable Development Goals. It can be expected that, with such push in place, in the upcoming years the state investment vehicles may change the rules, as well as the whole landscape, of the global “green” financing system.
sovereign wealth funds (SWFs), UN, Agenda for Sustainable Development, Sustainable Development Goals, low-carbon (“green”) economy, “green” financing, International Forum of Sovereign Investment Funds, One Planet SWF Working Group Framework
1. Khudyakova L. Reforma global’nykh finansov v kontekste ustoichivogo razvitiya [Reform of global finance in the context of sustainable development]. Mirovaya ekonomika i mezhdunarodnyye otnosheniya, 2018, vol. 62, no. 7, pp. 38-47. DOI:10.20542/0131-2227-2018-62-7-38-47
2. Gelb A., Tordo S., Halland H., Arfaa N., Smith G. Sovereign Wealth Funds and Long-Term Development Finance: Risks and Opportunities. World Bank Policy Research Working Paper no. 6776, 2014. 30 p. Available at: http://hdl.handle.net/10986/17313 (accessed 19.12.2018).
3. OECD Progress Report on Approaches to Mobilising Institutional Investment for Green Infrastructure. Paris, OECD, 2016. 57 p. Available at: http://www.oecd.org/environment/cc/11_Progress_Report_on_Approaches_to_Mobilising_Institutional_Investment.pdf (accessed 19.12.2018).
4. Financing Sustainable Development: the Role of Sovereign Wealth Funds for Green Investment. Geneva, UNEP, 2017. 81 p.
5. Global Guide to Responsible Investment Regulation. London, PRI Association, 2016. 34 p. Available at: https://www.unpri.org/download?ac=325 (accessed 19.12.2018).
6. Better Business – Better World. London, Business & Sustainable Development Commission, January 2017. 122 p. Available at: http://report.businesscommission.org/uploads/BetterBiz-BetterWorld_170215_012417.pdf (accessed 28.12.2018).
7. Global Guide to Responsible Investment Regulation. Executive Summary (2016). Available at: https://www.unpri.org/globalguide-to-responsible-investment-regulation/207.article (accessed 19.12.2018).
8. Investing in the SDGs: an Action Plan. World Investment Report 2014. New York, Geneva, UNCTAD, 2014. 228 p.
9. Fixsen R. Norway SWF: Governments Could Help Realise Sustainable Development Goals. 07.09.2018. Available at: https://www.ipe.com/news/esg/norway-swf-governments-could-help-realise-sustainable-development-goals/10026553.article (accessed 15.01.2019).
10. Climate Financial Day: Caisse des Depots Steps its Low-Carbon Strategy up. 30.11.2018. Available at: https://www.caissedesdepots.fr/en/climate-financial-day-caisse-des-depots-steps-its-low-carbon-strategy (accessed 15.01.2019).
11. Caisse des Depots. Responsible Investment. Available at: https://www.caissedesdepots.fr/en/responsible-investment (accessed 15.01.2019).
12. Braunstein J. Sovereign Wealth Funds: the Catalyst for Climate Finance? Washington, World Bank, 2016. 2 p. Available at: http://blogs.worldbank.org/psd/sovereign-wealth-funds-catalyst-climate-finance (accessed 19.12.2018).
13. Masdar Clean Energy Factsheet. Available at: https://www.google.ru/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=2ahUKEwihmPGA9vTfAhUHtYsKHQQYCrwQFjAAegQIARAC&url=https%3A%2F%2Fmasdar.ae%2F-%2Fmedia%2Fcorporate%2Fdownloads%2Fmedia%2Fmasdar-clean-energy-factsheet.pdf&usg=AOvVaw0tbbLHue4fDYeDlm19MkHC (accessed 15.01.2019).
14. Financial Innovation for the SDGs. Action Platform. Available at: https://www.unglobalcompact.org/take-action/actionplatforms/financial-innovation (accessed 19.12.2018).
15. New Challenges, Private Markets. Sovereign Wealth Funds Changing Investment Strategies. Auckland, IFSWF, November 2016. 5 p.
16. Chebanov S. Suverennye investitsionnye fondy: postkrizisnye tendentsii [Sovereign wealth funds: post-crisis trends]. Mirovaya ekonomika i mezhdunarodnyye otnosheniya, 2018, vol. 62, no. 12, pp. 15-25. DOI:10.20542/0131-2227-2018-62-12-15-25
17. Dealing with Disruption: IFSWF Annual Review 2017. London, IFSWF, 2018. 78 p.
18. IFSWF Joint Communique: One Planet Sovereign Wealth Fund Working Group. Auckland, IFSWF, 2017. Available at: http://www.ifswf.org/general-news/joint-communiqu%C3%A9-one-planet-sovereign-wealth-fund-working-group (accessed 19.12.2018).
19. The One Planet Sovereign Wealth Fund Framework. London, IFSWF, 2018. 15 p.
20. Investor Action on Climate Change: A PRI-Novethic Assessment of Global Investor Practices: where We Are and what Needs to Happen Next. Paris, PRI-Novethic, 2017. 13 p.
Registered in system SCIENCE INDEX