During the SDG Investment Forum at COP28, the UN Global Compact CFO Coalition for the SDGs demonstrated the importance of corporate investments and financing, effectively heeding increasingly louder calls for greater private sector investment in climate action. Corporations are expected to be the largest direct investors in climate change mitigation, accounting for roughly one-third of the total investment needed between now and 2050, which some estimate could amount to USD 275 trillion.

The SDG Investment Forum, organised in partnership with the United Nations Sustainable Stock Exchange (UN SSE), the Dubai Financial Market (DFM) and the Global Investors for Sustainable Development (GISD) Alliance brought together CFOs, sustainability experts and investors to exchange views on how corporate investments and finance can best contribute to tackling the climate crisis.

A new report released by the CFO Coalition for the SDGs, Corporate Investments to Achieve Climate Ambitions, highlights the outsized role of the private sector and corporations in particular in the US$9 trillion a year in capital spending needed until 2050 to achieve the goals of the Paris Agreement. Corporations are the main direct investors in the infrastructure and technology that will underpin low-carbon growth in many sectors of the economy, including power, agriculture, buildings and mobility.

Speaking during the event, Sanda Ojiambo, CEO and Executive Direct of the UN Global Compact said: “Climate change is impacting virtually every industry and region of the world. Private climate financing must play a pivotal role as emerging markets and developing economies seek to curb greenhouse gas emissions and contain climate change while coping with its effects. For this to happen we must ensure companies – in the Global Compact and beyond – make the necessary investments and that investors and governments create necessary and appropriate incentives.”

In response to the growing urgency for collective action to combat climate change, the CFO Coalition for the SDGs aims to create a $10 trillion market for SDG-directed finance by 2030. The 70 CFOs who are part of the CFO Leadership Group have already committed to collectively invest more than $500 billion by 2025 in support of the SDGs.

An Ernst & Young survey found that 69% of companies who undertake climate-smart investment strategies have been positively surprised by the financial value of climate investments with corporate climate leaders 2.4 times more likely to experience significantly higher returns on climate investments than expected.

The CFO Coalition for the SDGs has developed guidance and resources to support governments in building a bridge between climate action and SDG  investment and finance, one of the five areas of the Forward Faster initiative. The Forward Faster initiative aims to mobilize private sector action where it can collectively make the biggest, fastest impact by 2030, focusing on gender equality, climate action, living wage, water resilience and finance and investments.