The COVID-19 pandemic exacerbated the financing gap for the implementation of the 2030 Agenda in developing countries, estimated at USD 3.7 trillion in 2020, corresponding to a 50% increase. Shifting only 3.7% of the institutional assets – over USD 100 trillion in 2019 – towards sustainable activities in those countries would be enough to fill that gap.
Report: “Mobilising institutional investors for financing sustainable development in developing countries: Emerging evidence of opportunities and challenges”
Analysing the volumes and composition of selected institutional investors’ portfolios, this report finds that the share of investments allocated to developing countries is still limited. It also looks at the main investment drivers and considerations of these actors when operating in developing countries.
The report explores solutions to channel more of their institutional assets towards developing economies, especially through blended finance. Whilst evidence shows that risk mitigation instruments such as guarantees can contribute to lowering the perception of risks, more efforts are required to attract institutional investors in significant blended finance operations.