What do nearly 200 CEOs of the world’s biggest companies have in common? They have recently committed to run their businesses for the benefit of all stakeholders–customers, employees, suppliers, communities, and shareholders.
This high-profile declaration echoes mounting interest across the corporate and investment worlds in achieving positive social and environmental impact alongside financial returns. Look no further than the world’s largest institutional investor, BlackRock, which has called on its portfolio companies to integrate both profit and purpose into their core strategies.
In addition to increased pressure from customers, employees, and other stakeholders regarding social responsibility, the Sustainable Development Goals (SDGs) are a key driver of this ongoing transformation in the private sector and are also a critical guide for public sector investment. Since 193 members of the United Nations agreed to pursue the SDGs in 2015, governments around the world have integrated SDG targets into national development plans, priorities, and policies.
Sounding the alarm to spur SDG progress
Is this transformation spreading fast enough to translate into the level of action and resources needed to meet these ambitious global goals by 2030? The UN says no in a recent report, warning of the urgent need to revamp the global financial system in order to reach the SDGs.
Against this global backdrop, how is Latin America and the Caribbean faring? Circumstances vary widely by country and SDG, but, in short, despite progress, there is still a lot of work to be done to meet the SDGs in the region.
Take SDG 6 (Clean Water and Sanitation), for instance. According to UNICEF and the WHO, an estimated 60 million people in the region lack access to basic sanitation services and 20 million lack access to basic drinking water. Closing these gaps and ensuring that water is safe for drinking and hygiene goes beyond the capacity of any one actor. Even as the largest provider of development financing in the region (including for water and sanitation), the IDB Group’s support to help nearly 1 million households gain access to water and sanitation from 2016 to 2018 is dwarfed by the need.
That is why national governments, development providers, and the private sector must join forces to meet the ambition of the SDGs and the UN has sounded the alarm about the need to do so quickly.
Getting more bang for your buck with impact management
So, what can be done to accelerate progress on the SDGs in Latin America and the Caribbean? A lot has been said about the importance of scaling up financing and there is no doubt that adequate financing is a necessary, but not sufficient condition to meeting the SDGs. Ensuring that financing is dedicated towards approaches that have been proven to be effective is equally critical. And doing so, in fact, can help attract additional resources.
For its part, the IDB Group measures the results and impact of the projects we finance in line with the SDGs, as highlighted in our recent 2019 Development Effectiveness Overview and SDG website. Each of the IDB Group institutions uses a series of processes and tools to ensure a focus on results during project design and to monitor projects throughout their lifetime.
At the same time, we have a Corporate Results Framework that measures achievements across the portfolio and allows for the identification of indicators that are not on track. This helps to prioritize efforts and understand where the IDB Group may need to make course corrections to deliver the greatest impact.
Beyond continuous results measurement, the IDB Group uses impact evaluations to fill knowledge gaps and build an evidence base around the most effective models, with an eye towards scaling up what works best.
Strong results frameworks, impact evaluations, and other tools help assure governments, donors, and investors that their money is having an impact.
The ambition of the SDGs makes meeting their targets a daunting task. But leadership from the region’s countries, together with public development financing and an acceleration of private capital flows can help channel the investment – and produce the results – that the region needs.
For more about IDB Group-financed projects and impact evaluations linked to the SDGs in Latin America and the Caribbean, download our annual report on results and impact, the Development Effectiveness Overview (DEO 2019).