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Domestic and international private business and finance

Private business activity, investment and innovation are major drivers of productivity, employment and economic growth. The Financing for Development outcomes call on businesses to apply their creativity and innovation to solving sustainable development challenges, and invites them to engage as partners in implementation of the sustainable development agenda. Public policies set the enabling environment and the regulatory framework for private sector investment and activity. In understanding the role of the private sector in financing sustainable development, it is important to recognize that the private sector includes a wide range of diverse actors, from individual households and international migrants to multinational corporations, and from direct investors to financial intermediaries, such as banks and pension funds. While the large preponderance of private business activity remains profit driven, a growing number of institutions have double or triple (social and environmental) bottom lines. There are two alternative strategies for encouraging and incentivizing greater private investment in the SDGs: better aligning profit-oriented investment with the SDGs and reorienting investment and business models to incorporate environmental, social and economic (ESG) impacts. These two strategies above are not mutually exclusive. Indeed, both should be pursued.