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FEATURE STORY November 29, 2018

Buenos Aires Call to Action: Shaping the Future of Global Private and Public Investments

Leaders from the public and private sectors—including select heads of state, ministers of finance, executives from global investment firms, and heads of international organizations—gathered for an Investor Forum in the lead-up to the G-20 summit in Argentina. The Investor Forum highlighted concrete, practical steps in a Call to Action that can be taken to enable sustainable global economic growth through strengthened collaboration between the public and private sectors on innovation, resilience and stronger global investment markets.

A New Dialogue

We, Forum participants representing investors and the private sector, see a strong need for a regularly occurring high-level dialogue between investors and policy makers – an Investor Forum. This will allow us to jointly explore opportunities to advance long-term sustainable investment, including in the infrastructure that is needed to support economic growth and achieve the Sustainable Development Goals. This Investor Forum can propose concrete actions that will catalyze political leadership and engagement from G20 leaders, investors and development finance institutions, and provide accountability for progress on those actions.

Our Challenge and Vision

We are entering a new era in the global economy, investment markets, and society. Private and public investment strategies, economic policies, and financial regulations must keep up with the rapid pace of global changes—including major shifts in demographics and wealth, the spread of disruptive technologies, and the effects of climate change. Through prompt and joint action, these challenges can be addressed for global good while creating significant business and investment opportunities. At the same time, failure to address these issues will make it increasingly difficult for companies to deliver returns expected by their investors; for investors to deliver the returns expected by their shareholders; and for governments to deliver on their commitments.

In tackling these challenges, we can increase our combined impact to achieve stronger global investment markets and maximize the financing of sustainable projects. We must do so by better aligning private and government-led investment strategies towards greater impact; by balancing the pursuit of short-term returns with seeking longer-term value; by adopting shared principles and standards of transparency and sustainability of private investment and development finance; and by strengthening coordination among investors and global, regional and national policymakers and regulators.

We believe that financial markets should enable innovation and entrepreneurship—so they can promote economic growth, resilience, stability, and financial sustainability. We believe that global public-private dialogue and collaboration should focus on concrete actions that can achieve short-term progress while strengthening the foundation for long-term progress.

Our Call to Action

We call on governments, regulators, development finance institutions, credit-rating agencies, companies, and institutional investors to work collectively in support of sustainable long-term investments through the following actions:

A.    Sustainable Long-Term Investing:

Action 1: Encourage national and international regulators and supervisors of banking, insurance, securities, and pensions to work together with the private sector to clarify that fiduciary duty is not inconsistent with the material environmental, social, and governance (ESG) factors, and promote their integration within investment processes.

Action 2: Address regulatory and reporting constraints that could limit advancement of long-term, sustainable investing, for example by adjusting capital charges to actual asset risk profiles; and rationalizing corporate ESG disclosures, including consolidating existing ESG disclosure standards; and promoting their use and incorporation into accounting norms.

Action 3: Incentivize sustainable long-term investing by requiring asset owners, asset managers, investment consultants, and other intermediaries to disclose their long-term sustainability policies; and by asset owners and asset managers aligning their long-term value-creating goals, including through long-term mandates.

Action 4: For investors seeking positive financial and non-financial outcomes, and with the support of policy makers and other stakeholders, define the impact investing market and adopt harmonized operating principles and practices.

B. Investing in Infrastructure:

Action 5: Scale up resources allocated to defining and preparing sustainable, bankable infrastructure programs and projects—in particular, through multilateral and national facilities that emphasize standard approaches to project preparation and structuring.

Action 6: Address data gaps that impede development of sustainable infrastructure as an asset class; expand efforts by governments, development finance institutions, and international organizations to scale and effectively utilize capital markets and co-investment platforms for private investors; and develop local financial ecosystems conducive to infrastructure finance by international and local investors.

Action 7: Boost collaboration between investors, governments, and development-finance institutions to develop political-risk insurance and expanded use of private insurance and reinsurance markets. Strengthen dialogue between these parties to enhance existing and determine new mechanisms to mitigate political, foreign currency and regulatory risk.