The Importance of a Multidimensional Approach in Tackling SDG 1
The first of the United Nation’s Sustainable Development Goals (UN SDGs) is to end poverty. While one of the benefits of globalization over the past 30 years has been the reduction in absolute rates of poverty worldwide, poverty is often still simply measured in terms of income levels. Yet poverty is multifaceted and reflects more than a deficiency of income and productive resources. It encompasses economic, social, cultural, and political elements and is inherently interwoven with a lack of fundamental human rights. According to the UN, its manifestations include hunger and malnutrition, inequality, social discrimination and exclusion, deprivation, inadequate access to education and basic services, as well as lack of participation in decision-making. To make progress towards poverty reduction, we need to consider ways to mobilize more investors and businesses to adopt this goal.
This report represents an exciting collaboration between Citi and SOPHIA Oxford, which was formed by Oxford University as a not-for-profit partner of the Oxford Poverty and Human Development Initiative (OPHI). Over the past decade, 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.
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 world. Eliminating poverty and reducing inequalities can deliver substantial growth, and the private sector has a key role to play in making this happen. The good news is that investors are increasingly embracing the UN SDGs and aligning their investment strategies to the 17 goals. The challenge is for these funds to be effectively targeted and their impact measured. This is more important than ever as the world starts to recover from the COVID-19 crisis because the pandemic has increased the gap to achieving several SDGs, including SDG 1 — No Poverty.
We provide an overview of measures of poverty in the global economy and then address how the OPHI methodology allows for more nuanced and effective interventions, which can drive both economic growth and social inclusion. We include case studies of where the OPHI approach has been used successfully at a country level and at the corporate level, and in the last chapter we propose using it to harness finance to realize the ambition of SDG 1.
We hope you gain fresh insights from this Citi GPS report and are challenged to consider how you can support the adoption of SDG 1. We look forward to sharing the results of the collaboration between Citi and SOPHIA Oxford in future reports and events.Authors: Jason Channell,Ying Qin,Helen Krause,Nardin Baker,Jamie Coats,Ana Vaz,
Over the past few decades, the world has made remarkable progress in the reduction of extreme poverty. but the recent slowdown in poverty reduction, now compounded by COVID-19 implications, has made a number of regions and individual groups especially vulnerable to falling into extreme poverty, rather than moving out of it.
Recognizing and embracing data and metrics on poverty that are beyond monetary deprivation will help create a sustainable and progressive route out of extreme poverty. the Global Multidimensional Poverty Index (MPI) captures deprivations across three dimensions — education, health, and living standards.
By assessing both the human and financial cost of the elements that make up a multidimensional poverty index, we can estimate the human opportunity and quantify the annual incremental spend for targeted investment to help fix the root causes of poverty. If undertaken correctly, the multiplier effect of the capital deployed toward many of these measures can also provide a useful spur to growth.
Tens of trillions of dollar are looking to invest with positive impact, but capital is not getting to where it is needed the most because of a mismatch in risk appetite of the capital. Sustainability-linked bonds could offer an attractive solution for the providers of capital, as well as those seeking access to it.