Citi GPS report sees $1.6 trillion opportunity to improve lives of millions
A pioneering report was launched this month introducing a new robust social metrics framework for environmental, social, and governance (#ESG) investing and impact assessment using a multidimensional poverty approach.
The report represents an exciting collaboration between Citi GPS and SOPHIA Oxford, which was formed by the University of Oxford as a not-for-profit partner of the Oxford Poverty and Human Development Initiative (OPHI).
Examining poverty around the world, the report draws on the global Multidimensional Poverty Index, jointly produced by OPHI with the United Nations Development Programme, that tracks acute poverty for over 100 countries and explores how the private and financial sectors can join with the public sector to play their part in eradicating poverty, and what the human and economic benefits of doing so might be.
“Poverty is not a niche, isolated, or specific problem. It is all around us, takes many forms, for instance, education, health, employment and assets, and still blights far too many lives,” says Jamie Coats, President & CEO, SOPHIA Oxford. “More granular approaches to analyzing poverty such as the multidimensional poverty index (MPI) are key to understanding not just how many people are in poverty, but crucially in what way they are experiencing deprivation, and the depth of that poverty,” he adds. It can help us (1) formulate more targeted programs to eradicate poverty, (2) allow progress in monitoring it and even help to raise and target the capital needed to tackle these issues, and (3) allow investors to demonstrate impact from their investments.
“We should not see the eradication of poverty as a purely moral duty that comes at vast financial cost. It is also an enormous financial and social opportunity,” says Andrew Pitt, Global Head of Research, Citi Institutional Clients Group. The benefits of eliminating poverty for business are incontrovertible. “Aggregated investment opportunities running to 1.6 trillion dollars 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,” says Jason Channell, Head of Sustainable Finance, Citi Global Insights.
The rise of sustainable, responsible, and impact investing offers an enormous opportunity to direct capital towards the eradication of poverty. With environmental, social, and governance (ESG)-screened assets under management (AUM) now at more than $35 trillion, and with signatories of the UN-backed Principles for Responsible Investment now representing more than $100 trillion of AUM, investors are increasingly embracing the UN Sustainable Development Goals (SDGs), and aligning their investments with them.
At the virtual launch event attended by Jason Channell, Head of Sustainable Finance, Citi Global Insights, Sabina Alkire, Director of OPHI, Jamie Coats, President and CEO of SOPHIA Oxford, and Philip Brown, Head of Public Sector, Green & Sustainable Debt Capital Markets, Citi, the speakers discussed ways in which multidimensional poverty indices (MPIs) have already been applied in the corporate sector in Latin America to address poverty among employees; how to bridge the gaps between development economics and investment markets; the potential of the increased focus on social as well as environment factors in sustainable investing; and the importance of data to assess creditworthiness and measure impact in emerging markets. Director of OPHI, Sabina Alkire, read out the words of the President of Costa Rica “This report has the potential to be a game changer in reducing poverty…” who wrote of his hope that it “transform equity and debt...powerful markets that can put an end to poverty.”