B20 proposes global sustainability finance fund
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Even as Delhi readies for the Group of Twenty (G20) Summit this weekend, Business 20 (B20), an engagement group of the G20, has proposed the creation of a Global SDG Acceleration Fund (GSAF) that will draw in private capital to augment public resources, and accelerate projects to achieve UN SDG (sustainable development goals) 2030 targets. This is proposed as a pure credit enhancement fund which will help bridge the financing gap across developed and developing economies.
B20 is a forum that facilitates engagement between the international business community, G20 decision-makers, and governments. N Chandrasekaran, chairman of Tata Sons, heads B20 India.
Taking cue from India's corporate social responsibility (CSR) format, B20 suggests member countries ask its large enterprises to contribute 0.2% of their profits GSAF for three years. "Each member country would have the discretion of adopting voluntary or mandatory contribution of 0.2% of profits of larger enterprises for three years," B20's proposal to G20 states.
GSAF is envisaged as a pure credit enhancement fund, housed at an existing Multilateral Development Bank like the World Bank to leverage existing capacities and deliver projects deploying more than $1.25 trillion across developed and developing countries.
According to B20 Communique to G20, "GSAF is recommended as a global multi-donor fund wherein the G20 and the next ten largest countries, by GDP, are proposed to pool in capital in GSAF, following a formula based on their GDP and per capita GDP as a percentage of world per capita GDP. GSAF's objective would be to bring governments, private sector, and philanthropies together to bridge the SDG financing gap by leveraging credit enhancement tools and blended finance."
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In addition to GSAF, B20 India has proposed some other concrete institutional mechanisms, including the establishment of a B20 Global Institute to pursue recommendations coming from the B20 summit, for long-term impact.
G20, the forum for international economic cooperation, comprises 19 countries (Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Türkiye, the United Kingdom and United States) and the European Union. Its members represent around 85% of the global GDP, over 75% of the global trade, and about two-thirds of the world population.
India holds the Presidency of the G20 from December 1, 2022, to November 30, 2023.