 Thank you very much. It's really a pleasure to be here today so the topic of our panel is financing the SDGs and This is an unsolved challenge even two years after the SDGs have been adopted We know that the SDGs require trillions of dollars of additional public and private investment And we also know that there is ample capital in this world and ample wealth in this world That is waiting to be mobilized But despite this coexistence of capital and needs we still don't have the mechanisms at scale To solve the problem at hand We're very lucky today to have two leaders in this space Who will actually help us get out of this conundrum? To my left we have Mr. Alexander de Kru Deputy Prime Minister and Minister of Development Cooperation digital agenda post and telecom in the Belgian federal cabinet Mr. De Kru previously served as the Deputy Prime Minister and Minister of Pensions for his government and to his left We have Mr. Herve Dutay and he is the regional coordinator for sustainable finance at BNP Paribas And has spent over 20 years in the financial services industry in a variety of roles around the world So we have perspectives from both the public sector and the private sector And I'm just really ecstatic to see what we can come up with to solve these problems Deputy Prime Minister, why don't we start with you five-minute opening remarks and then we'll hand it over to Herve and take it from there Okay, thank you for this very nice introduction when we are talking about Financing for the SDGs One of the main topics that will always come into the discussion is ODA official development aid For who does not not ring a bell. It's the infamous zero seven percent Now is ODA really the key to unlock development? My hypothesis here is that it is not the case And I would just like to start with one one example two countries Ethiopia and the Democratic Republic of Congo both sub-Saharan countries Fairly the similar size coming out of a conflict end of the end of the 90s If their GNI gross national income in the end of the 90s was a hundred Then you see that in the DRC it is today about four hundred and you see that in Ethiopia today It is about seven hundred So if the thinking would be that ODA is the key to development Then we would have to conclude that Ethiopia has received a lot more official development assistance Then the DRC has received That's not the case It's actually quite the opposite the DRC has received a lot more official development aid The main difference obviously was that the governance in Ethiopia was much better than the governments in In the DRC throughout the world today We do not really see a correlation between the success in development and how much ODA we are Pouring in what we see is that development is taking place in stable environments And it's taking place in countries where there is a certain political will This is more about policy than it is about pouring money in and maybe another Another great example of development and it's a completely side of the other side of the world It's in China and it's a policy that Deng Cha Ping Introduced that in the end of the 70s at some point he allowed Farmers to produce more Than the quota they had to sell to the states and to produce more but also sell it on the market the fact that the farmers were allowed to sell on the market created Entrepreneurship created profit profit created investment and so on this is just giving a little bit more freedom and Improving the lives for more than 10 million of people. So in the end what it is about It's about governance about political will and about sound policies These are the real factors that drive sustainable development Financing will only have its role when the political space is there to allow Financing to play its its role Does that mean that financing has no role to play whatsoever? No That's not what I said. What I said is that there is a precondition for financing to help in Development and that is very different on the type of country you're talking about when we are talking about middle-income countries This is mostly about domestic resource mobilization. This is about Foreign foreign direct investment. This is about remittances capital markets and so on If you are talking about the least developed countries These developed countries are today very very dependent on foreign assistance now all the ODA in the world is Never going to be sufficient To achieve the SDG agenda in the least developed countries That means that you have to open it up to other sources of financing private sector for example and Private sector that will invest if there's profit and Profit is actually a good thing also in development if you want Those financial flows to come then there needs to be a perspective of profit and a decent profit I'm not talking about monopolistic Profit. I'm not talking about tax evasion, but a decent profit Means that people can get hired means that there can be investment means that there is an economic Cycle is taking taking place in my perspective ODA is a very outdated concepts if we want to look into financing today I think we need to look at it from another perspective. We need to look at it from the perspective of leverage For any every dollar or euro of ODA how much other types of investments are you pulling in? Basically, I think you should look at ODA The way we look at the hedge fund today in the financial markets ODA should also something that Partners with the private investment and a private investment that is looking for impact and looking for results And this is also about values Pouring money in is not the solution Investing in human rights Investing in empowerment is a real thing If we make sure that a girl can go to school This is a good thing for demographics, but it's also a good thing because she can become an entrepreneur and become an entrepreneur Is the best way of driving development? This is about free enterprise. It is about having governance being accountable so I would say Development is not so much about finance. It is about empowerment if you empower people Then develop then financing can have its role and drive the sustainable development goals. Thank you They thank you very much. Mr. D crew Harvey over to you Good morning First of all prime deputy prime minister Thank you so much for your remark and what you said does resonate very much to me from the private sector My name is Irving Dutay for over 20 years. I've traded derivatives or managed capital market activities and A little over three years ago. I took over the role of heading corporate social responsibility for BNP Paribas and When a trader takes over CSR, believe me, it's not to repay in classrooms in the Bronx or at least not just that My view you see is very much that when it comes to CSR within comes to Corporate responsibility towards society our first and foremost Responsibilities to come up with business solutions, not just philanthropic ones So fast forward to today this has led to the creation of our sustainable Finance practice and I will share it with you a couple of perspectives and especially I think that's what you wanted and you get One example of a product that starts moving the ball when it comes to financing the SDGs So first of all, what is our problem from from the private sector and especially from a bank's perspective? It's how to unlock capital from pension funds from insurance companies from sovereign wealth funds and Especially from what we call mainstream investors or retail investors. That is probably most of you here and To solve that problem one has to understand What what is the key pain point of those private sector? Stakeholders to invest and that has to do with return That has to do with risk That has to do with liquidity when you invest something you may want your money back tomorrow And that has to do with time with time horizon These are the tenants which are embedded Into shareholders expectations and as well within fiduciaries and And they come before any other civil society expectations somehow So this is what we have to deal with We have to either fit these requirements and we the private sector can do something around those constraints Or one has to change those requirements, but this is what policy can do not the private sector So two things we can do the first one is signaling and the second one is create products So just one minute on what signaling is about and things that we've done at BMP paribas The very first thing that we've done like Microsoft and other companies is to map our business along the SDGs I didn't bring you the slides It turns out that we do cover all of them in several times, which is not surprising because banks Fortunately and sadly we don't do anything tangible. We're a pass-through of money So we may finance good or not so good projects, but this is how we map our Business the second thing is we set targets and one of them is that by 2018 at least 15% of our financing Fund directly projects which which are related to the SDGs today. We're at 16 and a half percent Which means we'll raise the target soon Incentives we have 13 public KPIs around these endeavors one of them so is about the percentage of loans to SDGs and 20% of the variable compensation of our top 5,000 officers is linked to the achievement of that target in 2018 all right now products so I Believe banks are Hold the key of this capitalism to the common good for one reason banks We are in the business of bridging money between projects and investors and Investment banks in particular we are in the business of transforming risk and remember I mentioned that the investor wants return a safe risk and liquidity So here is the opportunity. This is the amount of money that's going to change hands over the next 30 years or so About 41 trillion dollars are going to change hands from baby boomers and Gen X to millennials And we know this generation and people who live with this this generation and I associate myself to that Are very conscious and want to bring purpose to their investments So this is what we want to invest in the reality is if I offer you that you won't put your money into it Okay, so here's an example of a product that we've done with the World Bank We've done several actually for the last three years and last March. We launched the very first Sustainable bond with the for the World Bank That is linked to the SDGs so Investing in a solo farm in Tanzania doesn't work for us. We want safety So what we did is we selected a bunch of Sustainable projects around the world with the World Bank and wrap that them into a bond So now we've transformed project risk into a World Bank triple a credit risk The problem is now you're gonna get 2% or so Which you don't want you want more upside Hopefully so we've transformed that yield into an equity return if you believe the equity market will do better over the next 10 or 15 Years, this is the transformation we've done now you don't want the stock return of Any basket of everything and anything so we've filtered this Many ways we've excluded what we don't want we've taken the best in class in the insurers in in the banks Etc. And especially we've kept the 50 companies where at least 20% of their revenues address at least one of the SDGs and On top of it we control for a number of financial parameters So it fits the requirement and finally we and the World Bank have committed to provide daily liquidity on this product So the day you want your money back you can have it and Those fairly engineered products usually are available to the wealthy which have a billion dollars to spare and the face value Is usually a quarter million dollars well, we've put a face value of a thousand dollars So that anyone and it was distributed by a number of banks around the world UBS torture bank and so on So that the retail investor can invest in so to wrap up this is the one example of a product With partners that can bring the private sector much closer to what we call impact investing. Thank you so audience please have Take some time to think about some questions for our panelists and I'll start actually if I may So mr. Decru there was a provocative speech about Oda versus private investment The reality is though that there are some investments in this world that need public financing And that there are some that need private financing and then there's a different set that could require a bit of both So as Minister of Development, how do you think about drawing that distinction? to say Oda or international public finance needs to go into these sectors or these industries or these regions and That the private sector can take care of other parts and then I'll ask you a question right after I think that the First thing that needs to change is that we move from measuring inputs to measuring outputs the whole Development finance today world today is looking at how much money you spend and Myself as a minister I will be seen as a good minister if I spend a lot of money And if I do not spend a lot of money will be seen as a bad minister Whereas there is a whole other question is what's the impact of what you are of what you are doing? I'm not convinced that pouring in more money is always the right the right investment very often. This is about Empowering people and yes, obviously providing education Is one of the key of the key elements and providing health care is one of the other key elements and investing in family planning Is actually one of the best things best investments that you can you can do, but it is much more about Accountability About the effectiveness of the investments that we are doing then it really is about how much more should money should we be Pouring in if you make sure that people are strong enough if you make sure that there is attention Between population and its governments. I mean today what we see is that too often Governments some governments are so dependent on external financing from development aid That it doesn't matter if the population is happy with the policy or not because the financing is coming from another way in an in a classic Democracy classic functioning nation well as a population you give a mandate to political leadership With your tax money, and if you're happy you will continue so if you're not happy There is there is a rupture which is going to to come that level of Accountability towards the population and not towards the international world I think is the key is key elements and if you have a stable environment with political will Then external financing can do a lot of things interesting, but if there's no political will Then I think it's very hard to achieve progress great Perfect question for you. Thank you very much for this presentation about the SDG bonds It's really an innovative product, and you and your colleagues deserve a lot of credit for that What do you see as one or two areas where public policy could help change how the financial system works? So that products that you're developing can be scaled quicker and money can be Invested in at a quicker pace than it currently is so first of all that's going to be my personal opinion And not the firm that employs me because I don't I don't mean to opine on policy, but One example that has worked very well in France as a matter of fact It's the so-called 1910 funds First of all 1910 funds are Funds where which are 90% so-called SRI socially responsible investing So it's typical listed equities which have been filtered to basically not do bad and 10% which is impact investing and so it can be in in the In the domestic developed country it can be social businesses where the social impact comes first and What was interesting in terms of policy in the early? 2000s France enacted a law for that any company that has at least 50 employees must offer at least 1910 fund within its Pension plan and within its employee incentive schemes and as a result because of this ability to obligation to offer that has driven billions of euros into Impact investing in in in France. So that's one example of a mandatory law It doesn't oblige people to invest in but there is an obligation for the employer to offer such fantastic Wonderful. Thank you. Are there any questions from the audience? We have just a few minutes here and here please Are there mics or? Okay, I'll repeat your question administrative expenses as Okay, and and please quickly because we yeah, okay, basically all day you said it's it's not very Progressive and I think that is right true and Because basically in my country Where you look at all day 50% of the audio that actually comes in goes into administrative expenses I'm little of it actually gets to the people that need it. Why don't ODA be invested in mechanization of farming or in industrialization because it's from the Ghanaian president. He said We're farming we're producing cocoa But at the end of the day the moment the moment is coming in from industrialized nations like where you Switzerland where you have Chocolates coming out from so why don't you invest more in? systems like industrialization Mechanization and if you do that people get to farm they get to make more money you build a crop of entrepreneurs that can now Take care of themselves. They don't need your aid to go to the hospital You don't need to buy malaria drugs for anybody You don't need to pay for you know because they have the funds to be able to do those things So what do you think can be done about that? Thank you very much and we'll take the second question Thank you very much the question I was gonna ask you is there you do talk about financing so obviously didn't talk about lack of Expertise and institutional capacity to ask some of this funding in Africa. I I mean I work for United Nations You know United University in in Tokyo and I led one of the biggest study in the issue of climate change And one of the their the outcome of this finance lack of Institutional capacity, how do you how do you address that because there is part of money on that UNF triple C and they do They can't ask it and that's the problem so Quickly, I think first of all when when people are educated and healthy a lot of things are possible and I think that's the basics make sure that a Girl gets the choice to not become pregnant at the age of 12 But it's go to school and take her own life in her own in her own hands Make sure that the basic health care is there and provide enough freedom if there is freedom of enterprise If there is an equalizing taxation system a lot of things will happen And and I'm not sure that governments need to set up whole types of industrialization Processes in general governments are not so good at that what government should do is provide the basis and People are people who are healthy and well educated are entrepreneurial everywhere and just make it Possible for people to construct their own country to build their own country not only to politics But also through to economic and social Things maybe on institutional capacity Look Institutional capacity in the end. What is it in the end? It's human capacity Right, so too often investments in what we call capacity building gets eaten up by per diems being paid to government officials traveling throughout the world and Not in the end being the most sounds investment if you invest in strong people strong people will build strong institutions Investing in strong institutions in the end is money, which is one way or another down down the drain So I think the common element with both questions is investing people Don't invest in institutions Infrastructure and so on if you invest in people who are healthy free and educated great things will happen Maybe I didn't share two points one one is the importance of leverage The there's not enough taxpayers money There's not enough philanthropic funds, and it's the same with multilateral funds. You can Spend billions, but there there is a limit to that the power of the private sector is leveraged Take the example of a bank you put one hundred dollars the bank will lend a thousand So we need to to to get those private sector metrics and of return To leverage the amount of money the second thing is there's a lack of instruments All our instruments in finance are based where we reward capital much more than we reward labor in other words We we've developed zillion of Mechanisms to fund those who take risk to make money but have fallen short in developing mechanisms to Raise funds for those who take risk to help others Some products are being developed, but we're This is the beginning of the journey Fantastic well, I think that's a nice way to end it This is the beginning of a long journey a lot of brainstorming is needed And let's all remember that we're talking about trillions of dollars for the SDGs so it's been a real pleasure to have been on a panel with both of you and Look forward to continuing the day's discussions. Thank you