The Sustainable Development Goals (SDGs) were initially conceived as a global framework for equitable growth, environmental sustainability, and social progress. However, nearly a decade later, global progress is lagging. Current projections indicate that only 17% of the SDG targets will be met, with advancements on a third of them either stalled or reversed.
The financial shortfall to achieve the SDG commitments is now estimated at $4.2 trillion annually. Within this, the Asia-Pacific region needs an additional $1.5 trillion yearly to fulfill its targets.
Asia, home to nearly 40% of the world’s billionaires, presents a potential source for this funding. There has been a 141% increase in billionaire net worth over the past decade. However, mobilizing this capital for inclusive and sustainable development remains challenging due to declining donor support and a fragmented funding environment, which puts long-term, impactful projects at risk.
Compounding these difficulties, certain sources of funding, like U.S. foreign aid, have diminished as priorities shift. An example is the U.S. withdrawal from the Just Energy Transition Partnership for nations such as Indonesia, Vietnam, and South Africa.
Asia must urgently revise its financing strategies to sustain vital social programs, meet SDG commitments, and achieve net zero targets. A strategic approach blending philanthropic and private capital is essential to protect critical initiatives from potential collapse.
Asia’s wealth, particularly within ultra-high-net-worth and high-net-worth families, is not being effectively channeled towards supporting the SDGs. The next generation of leaders, inheriting vast wealth, appears keen on addressing complex issues and exploring holistic investment strategies, incorporating both grants and investments to preserve wealth while benefiting society.
This shift presents an opportunity for innovative philanthropic strategies, especially as global aid retreats. Asia must explore how wealth can be deployed strategically. Leaders should move beyond traditional grant-making to coordinated, long-term strategies that attract both philanthropic and commercial capital. Philanthropic dollars can serve as catalytic capital in public-private partnerships, assuming early risks and enhancing the appeal of high-impact projects to commercial investors.
A blended finance model, which uses philanthropic capital to attract private investment, is a promising solution to the SDG financing gap. Wealth holders could leverage their capital as guarantees to unlock commercial investments, offer technical assistance grants, or take first-loss positions in investments, thereby reducing risks and making projects viable for commercial investors.
For instance, the Temasek Foundation guarantees and derisks loans to smallholder farmers as part of a project announced in March 2025, focused on sustainable oil palm replanting in Indonesia. However, more effort is required to effectively leverage philanthropic capital. Small transaction sizes may not appeal to institutional investors, and there is a need for more familiarity in structuring deals that combine public, private, and philanthropic capital. Additionally, more policy support and clearer regulations are essential to align these initiatives with government strategies.
Governments, development banks, and commercial investors must adopt innovative financing models like sustainability-linked loans, social impact bonds, and pooled funds to attract investments into critical sectors such as clean energy, education, and healthcare. Sustainability-linked loans, for example, offer lower interest rates to borrowers who achieve social and environmental goals.
Governments and regulators need to simplify approval processes, eliminate cross-border investment barriers, and mitigate investment risks in social and environmental impact to attract private capital. Investors require increased transparency and data to evaluate the effectiveness of sustainable finance models, with reliable information on financial returns and social outcomes boosting confidence in these investments. Digital tools can expand access to impact opportunities, especially for younger wealth holders interested in purpose-driven investing.
Building an ecosystem for social investment, which connects diverse stakeholders and fosters strategic partnerships, is crucial. Initiatives such as those by AVPN aim to gather Singapore-based family offices and private banks to mobilize capital for Asian causes.
Asia stands at a pivotal moment to advocate for sustainable finance at the upcoming International Conference on Financing for Development (FFD4). By seizing this opportunity to implement regulatory reforms and novel finance models, Asia can play a leading role in reshaping global sustainable development finance, ensuring development goals are met through strategic and collaborative funding efforts.
The views expressed in this article reflect those of the original authors and may not represent those of Fortune. This story was originally published on Fortune.com.
