A report released by Citi Group has found that $1.6 trillion is needed annually to eradicate global poverty and that extreme poverty could be up to six times worse than implied by traditional monetary measures.
However, sustainable, responsible, and impact investing offer “enormous opportunity” in directing capital towards alleviating global poverty, according to the report, which is a collaboration between Citi and Oxford University’s social enterprise spinout SOPHIA Oxford.
It said investors are “increasingly embracing” the UN’s Sustainable Development Goals, with more than $35 trillion in assets under management (AUM) already screened for environmental, social and governance factors.
Bloomberg Intelligence reported last month that global ESG assets may surpass $41 trillion by 2022 and $50 trillion by 2025, having exceeded $35 trillion in 2020.
Jason Channel, head of sustainable finance at Citi Global Insights, said: “Aggregated investment opportunities running to $1.6 trillion per year can offer economic multiplier effects of 5x plus, and allow the trillions of dollars of ESG-focused capital that wants to invest sustainably to be deployed effectively, all while improving the lives of millions.”
The report comes as inequalities have been worsened by the Covid-19 pandemic, and global trends towards ending poverty have been hindered.
The new study also analysed how to tackle SDG 1 of the UN’s Sustainable Development Goals, the aim of which is to end poverty.
It found that traditional measures of poverty, such as the World Bank’s International Poverty Line, could neglect the “multifaceted nature” of poverty, as they were based solely on monetary deprivation rather than other factors such as education and health.
The report concluded that “multidimensional” poverty measures, such as the Global Multidimensional Poverty Index methodology, which uses 10 indicators to capture deprivations, would be more appropriate in “capturing poverty in all its forms”.
Last year, Citi Bank issued a $1 billion Social Finance bond, the proceeds of which were used to fund access to financial services projects, as well as affordable housing and other development projects in emerging markets.
If you would like to attend a free Banking Exchange webinar on Generation Z Banking, Please click to register on the link below. The event will take place on February 24. Thank you for supporting Banking Exchange.
- Why Linking Opportunity Zones and the Community Reinvestment Act is a Win-Win for Banks, Investors, and Communities
- Cantor Fitzgerald unveils sustainable fund
- BlackRock buys renewables energy provider
- Climate change presents both risk and opportunity
- Harbor Capital Advisors preparing energy transition ETF