Domestic pension funds have an important role in generating long-term financial resources and facilitating the growth of capital markets. Ideas are emerging that domestic pension fund resources may be directed towards SDG financing. There is, however, a lot of complexity to using pension systems to support financing of the SDGs. This breakfast meeting will look at some of the risks, challenges and opportunities of using domestic pension funds to finance sustainable development goals.

The lack for investible projects is a binding constraint to make markets more inclusive and to mobilize at scale. Investible refers to projects, which are compliant with integrity and ESG standards that an investor would reasonably expect. A lot of the blended finance conversation has focused on financial de-risking. Other risks, such as sponsor, project or investment climate risk will remain. The session will focus on how blended finance can increase the universe of investible projects; it will review the experience of technical assistance facilities in project preparation and explore ways on how pipeline building can be improved and scaled.

Financial and investment flows to low-income countries present significant currency risks, which in turn inhibits finance and investments required to meaningfully narrow the SDG investment gap. Most debt investment is denominated in hard currency, exposing local borrowers and beneficiary countries to high currency risk and exposing investors to high credit risk. The majority of equity investment is denominated in local currency, exposing investors, who are interested in hard currency returns, to significant currency risk. The session will focus on experiences and solutions on innovative financing mechanisms reducing foreign currency risk and stimulating investment in developing countries.

This side event aims to build awareness on innovative financing mechanisms for sustainable ocean economies and provide an opportunity to discuss how to increase the scale and impact of investments for healthy and productive oceans. The discussion will build on the findings from the OECD Sustainable Ocean for All initiative, which provides a review of innovative financial instruments for the ocean. The event will also provide an opportunity to learn directly from countries and institutions that are at the forefront of developing and implementing these financial innovations and to hear perspectives on the opportunities and challenges of replicating them and scaling them up.

In this session, we will present a preliminary proposal for a common framework for measuring the impacts of business on well-being and sustainability. Building on the OECD’s Well-being Measurement Framework, originally aimed at policy makers and civil society, the framework is adapted to businesses at the firm level perspective. It uses the same concepts of dimensions of current well-being and resources for future well-being, based on the capital approach. This preliminary proposal also links with SDGs and the Business for Inclusive Growth platform, and identifies six groups of impact.

After four decades of discussions on corporate social responsibility (CSR), new regulations in India have made CSR into a public policy: the Indian Companies Act of 2013 mandates Indian corporations to fund areas that are crucial for the development – beyond their core business. After 6 years of this regulation, the panel will unpack the priorities of domestic philanthropy and CSR in India building upon the recent report by the OECD Centre on Philanthropy and insights from the members of the OECD Network of Foundations Working for Development (netFWD) and the OECD Emerging Markets Network (EMnet).

Private sector insurance products and services allow private finance to flow to underserved sectors and regions. Typically, private sector actors are unable to invest in developing countries because of expected risk-return mismatches. Insurance allows balancing the risk-return relationship. This Expert Discussion will benefit from a Background paper prepared by AON and the OECD which examines the insurance industry’s expertise in risk management and mitigation within the wider network of organisations (humanitarian) operating in this space, and the untapped potential of the industry in bringing scale to current activity.

With over 2 billion people lacking access to safely managed drinking water and 4.5 billion lacking access to safely managed sanitation, the annual economic losses due to inadequate water supply and sanitation are significant -- estimated at USD 260 billion. Despite progress, blended finance has not yet gained sufficient traction for water-related investments. This session will inform participants of the findings on emerging solutions and models of blended finance for water-related investments and foster discussion around the next steps to apply the lessons to scale up practical action.

In 2017, members of the Development Assistance Committee have officially adopted Blended Finance Principles for Unlocking Commercial Finance for the SDGs. The OECD Development Co-operation Directorate is currently preparing further policy guidance to support their implementation. At the PF4SD Conference, DAC members and Blended Finance stakeholders are invited to share their views on the future guidance for Principle 5: Monitor blended finance for transparency and results. The discussion will benefit from interventions by: • The Independent Evaluation Group of the World Bank, that will share findings and reflections from a recently completed evaluation of IFC’s Blended Finance Operations. • The Ministry of Foreign Affairs of the Netherlands, that will relate evidence on the use of Private Sector instruments (PSI) as part of the Evaluation of the Dutch government's policy on international responsible business conduct (2012-2018). • The Swedish Expert Group for Aid Studies (EBA), who will present a recent study on mobilising private development finance, focusing on transparency in PSI spending, the use of PSI for specific demographic groups and providers’ approach to ex ante option appraisal.

Two major themes of the 2018 PF4SD Week was that although blended finance has demonstrated itself to be an effective development tool, it is not yet achieving scale and not flowing to low-income countries sufficiently. Convergence’s database identifies the median blended finance project at $60 million relative to a $2.5 trillion SDG Investment Gap. DIFD, the THK Mobilisation Working Group, the OECD and Convergence have responded to create a Working Group, under DFID leadership, of development-focused organizations prepared to commit capital to blended finance projects at below-market risk-returns to mobilise investment to the SDGS – to achieve development impact and mobilize investment at scale.

Can blended finance be used in disruptive ways to help create or strengthen markets for more and better finance to agri-SMEs? This session will look at a series of recent experiences that suggest that this may be the case. While many blended finance solutions in the agri-SME space are successful in mobilizing specific amounts of finance, they are rarely if ever designed to have positive impact on the markets in which they operate.

The investment needed to achieve the SDGs are massive – and ODA and countries can’t achieve this alone. Innovative financial instruments are ways to attract new forms of capital towards sustainable development. This session aims to innovative financial instruments and how they have been used in development and humanitarian contexts, through cases and examples.

Following the OECD Blockchain Policy Forum 2019, the OECD Development Co-operation Directorate (DCD) drafted a paper titled: “Can Blockchain Technology help reduce the costs of remittances?’’. The paper reflects diverse perspectives on the intersection of blockchain technology and remittances. The session intends to discuss key elements of the paper and to identify missing research gaps that could potentially be explored further for enabling a favourable ecosystem that promotes the secure and responsible deployment of digital financial services, in particular, blockchain technology and effective development co-operation.

This session will explore how to enhance the business and investment impact on the SDGs through the theme of aligning incentives, bringing together representatives from firms with policymakers from the investment and development cooperation communities. The session will look at three interrelated topics: what drives firm behaviour in developing countries, how donors can help support an environment conducive to good business behaviour in developing countries and how policymakers can build a regulatory environment to attract SDG-aligned investment.