LONDON–(BUSINESS WIRE)–Citi Global Perspectives & Solutions (GPS) has released a report titled “ELIMINATING POVERTY — The importance of a Multidimensional Approach in Tackling SDG1”.
A new study of global poverty finds that extreme poverty, measured in all its forms and dimensions, is up to six times worse than implied by traditional monetary measures. But it also finds that new metrics can provide precise data on where to invest for change. The report, a collaboration between Citi and Oxford University’s first social enterprise spinout, SOPHIA Oxford, examines poverty around the world, how we can better understand its depth and its nature, how the private and financial sectors can join with the public sector to play their part in eradicating it, 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 provides another tailwind and offers an enormous opportunity to direct capital towards the granular 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. It is not by chance that the first of these is ‘SDG1 – No Poverty’, and this is more important than ever as the world recovers from the COVID-19 crisis. The capital is there and it not only wants to invest sustainably, but it wants to demonstrate how it is doing so, and here again the metrics from an MPI could prove a game changer.
The ground-breaking report provides an overview of measures of poverty in the global economy and then addresses how the MPI methodology allows for more nuanced and effective interventions, which can drive both social inclusion and economic growth. The report includes case studies of where the multidimensional poverty approach has been used successfully at a country level and at the corporate level, and concludes with how to use this approach to harness finance and realize the ambition of SDG 1 — no poverty. In this report, Citi’s researchers and data scientists have partnered with the SOPHIA Oxford team to help bring this world-class methodology more broadly to the business & financial world.
About SOPHIA Oxford
SOPHIA Oxford, which was formed by Oxford University as a not-for-profit partner of the Oxford Poverty and Human Development Initiative (OPHI), a research centre in the University of Oxford. Over the past fifteen years, OPHI has developed the field of multidimensional measurement, focused primarily on poverty and well-being, expanding its research and social policy uses. The OPHI multidimensional poverty approach has been adopted in official measures of poverty by the United Nations Development Programme, the World Bank, and more than 30 countries. SOPHIA Oxford brings this approach to the private sector enabling investors and businesses to incorporate key social indicators that improve the impact of their social investments and the lives of their employees and customers.
About Citi Global Perspectives & Solutions (Citi GPS)
As our premier thought-leadership product, Citi Global Perspectives & Solutions (Citi GPS) is designed to help our clients navigate the global economy’s most demanding challenges, identify future themes and trends, and help our clients profit in a fast-changing and interconnected world. Citi GPS accesses the best elements of our global conversation and harvests the thought leadership of our research analysts and a wide range of senior professionals across our firm.
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
www.sophiaoxford.org | www.ophi.org.uk
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