As the primary institution in the ecosystem, the government has a critical role in ensuring that different actors’ resources and efforts are aligned towards achieving the SDGs. As part of the work of our Consortium on SDG-driven tech Innovation Ecosystems, which the GSG co-leads together with National Advisory Board (NAB) partners from Israel, Portugal, France, and Italy, we are looking at reliable data and useful resources that compare the best practices of innovative and sustainable governments.

 In this blog, we explore some of the most comprehensive international databases and frameworks that offer valuable information and insights into best practices for innovative and sustainable governments. These resources provide a holistic approach to monitoring and evaluating progress towards achieving the SDGs and promoting accountability in the pursuit of shared goals.

Resources for Innovative Governments

The OECD has a few great resources. Its EC-OECD STIP Compass is a database that collects together in one place qualitative and quantitative data on national trends in science, technology and innovation (STI) policy from OECD member countries, supporting the continuous monitoring and analysis of countries’ STI policies in each country. The database addresses all areas of STI policy, involving initiatives spread across different ministries and national agencies. With STI as the common lens, the STIP Compass database presents data on the following domains:

• Governance
• Public research
• Innovation in firms and innovative entrepreneurship
• Science-industry knowledge transfer and sharing
• Human resources for research and innovation
• Research and innovation for society
• Countering impacts of COVID-19 on STI systems

Moreover, the Observatory of Public Sector Innovation (OPSI), another OECD initiative aims to promote innovation in the public sector, serves as a platform for governments, policymakers, and other stakeholders to exchange knowledge and best practices, and to identify emerging trends and opportunities for innovation. Its Anticipatory Innovation Resources (AIR) helps policy practitioners and experts in public sector innovation get started with anticipatory innovation. Additionally, the Government at a Glance, published every two years by OECD, suggests input indicators on public finance and employment; process indicators on regulatory governance, public procurement, governance of infrastructure, public sector integrity, open government and digital government.

Resources for Sustainable Governments

Sustainable Governance Indicators (SGI) presents a comprehensive framework and dataset to evaluate and compare the performance of countries in the areas of Sustainable Policies, Robust Democracy, and Good Governance. Developed by the Bertelsmann Stiftung Foundation in Germany, the SGI framework covers a range of policy areas, which includes democracy and governance, economic policy, social policy, and environmental policy, providing a set of indicators for each of these areas.

To discover resources for sustainable finance, consider exploring Sustainable Finance Hub, which is a platform developed by the United Nations Development Programme (UNDP) that provides valuable information and tools. Aiming to support countries in aligning their financial systems with the SDGs, the hub explores an overview of sustainable finance activities, which includes 1,055 initiatives across 145 countries, providing guidance and tools for governments, financial institutions, and other stakeholders to mobilise private capital towards sustainable development.

By utilising the resources and frameworks discussed in this blog, governments can benchmark their progress on innovation and sustainability, assess their policies and performance, identify areas of improvement, and take proactive steps towards achieving the SDGs. This will foster an environment where all actors are committed to advancing shared prosperity, social inclusion, and environmental stewardship, thereby laying the foundation for a robust ecosystem, which GSG and its affiliated NABs are dedicated to achieving.

Impact measurement is crucial to track progress and ensure that resources are used effectively, but the process can be complex and time-consuming. Moreover, the lack of literacy and awareness about SDGs among stakeholders exacerbates the issue. Fortunately however, the tide is turning with regard to private sector engagement and accountability to the SDGs. As highlighted in findings from the Consortium on SDG-driven Tech Innovation Ecosystems (expected Q2 2023) which the GSG co-leads together with National Advisory Board (NAB) partners from Israel, Portugal, France, and Italy, there is a growing trend of private sector actors using impact measurement/assessment frameworks. In France for example, 71% of companies have adopted an SDG framework to meet investor expectations and over 50% of institutional investors reported on the SDGs in 2018. Similarly, in Portugal, ~50 major corporations mention the SDGs in their sustainability reports, indicating that these companies incorporate the SDGs when measuring and communicating their impact.

Despite these promising results, the Consortium’s findings also reveal that SDGs are not commonly incorporated into impact measurement and assessment frameworks among most VC investors or startups. While some tools, which GSG profiled in a previous post, are available to help investors and companies align to the SDGs, only a handful reference tech-aligned sectors specifically. This poses a challenge for investors looking to support innovative technologies that can drive SDG progress.

To address this, we have compiled a list of several frameworks and tools that have been developed to clarify which tech applications align with the SDGs.

The following frameworks provide guidance to investors and stakeholders looking specifically to align their tech investments to SDGs:

• SDG Impact: The SDG Impact Standards provide guidance to businesses and investors on embedding sustainability and the SDGs into their management practices. The framework is based on a set of 17 SDG impact statements designed to help investors identify and measure their impact on the SDGs. While the SDG Impact Standards are a comprehensive tool, they do not focus specifically on tech-aligned sectors.

• EU Taxonomy: The EU Taxonomy is a classification system that identifies environmentally sustainable economic activities. It is designed to help investors identify which investments are aligned with the EU’s climate goals. However, the taxonomy does not include agtech, water tech, or social applications of technology such as edtech, fintech, healthtech, and govtech.
• Planetech Challenge Areas: The Planetech Challenge Areas support organisations in discovering how their technologies can address climate change challenges while gaining economic value. While this framework provides valuable guidance on how technologies can contribute to climate change mitigation, it does not link tech applications to the SDGs.
• Toniic SDG Impact Theme Framework: The Toniic SDG Impact Theme Framework is a taxonomy that matches members with others working on the same impact themes. It is tied to the SDGs and guides investors in aligning their investments with specific impact themes. However, this framework does not reference all possible software applications.
• SDI Taxonomy: The SDI Taxonomy focuses on companies’ product and service-related contributions to the SDGs and is based on financial metrics such as revenues. While this framework provides a clear way to measure the impact of investments, it does not provide guidance on specific tech applications that can drive SDG progress.

Even though the above tools and frameworks are not perfect solutions, they provide valuable guidance to investors and stakeholders looking to align their investments with the SDGs. Driving progress towards achieving the SDGs in the private sector, they offer a useful starting point for investors looking to support SDG-driven innovative technologies.

In April, UN Deputy Secretary-General Amina Mohamed warned that the Sustainable Development Goals (SDGs) are “slipping from our grasp.” With only seven years left to achieve the SDGs, municipalities are at the forefront of efforts to keep the SDGs top of mind in the urban agenda. According to research by the OECD, approximately 105 of the 169 SDG targets – over 60% – will only be reached if local and regional governments are actively engaged, as these governments are responsible for 55% of public investment and 37% of public expenditure across OECD countries. They also have significant sway over policies that are central to sustainable development and people’s well-being – from water to housing, transport, infrastructure, land use and climate change, amongst others. With 2.5 billion more people projected to be living in cities by 2050, action by municipalities today is key in determining the conditions in which many of us will live tomorrow.

A recent mapping study (forthcoming in Q3 2023) conducted by the Consortium on SDG-driven Tech Innovation Ecosystems, which the GSG co-leads together with National Advisory Board (NAB) partners from Israel, Portugal, France, and Italy, highlights a few great examples of municipal initiatives that are contributing to SDG-driven innovation in their respective countries.

This blog feature three examples:

• MIND Milano Innovation District: A geographical cluster for SDG-aligned innovation and economic development (Italy);
• The Open Data Policy for Sustainable Innovation, Vilnius (Lithuania);
• SDGLocal: A municipal platform for the SDGs (Portugal).

As these examples illustrate, public and private partnerships are at the heart of creating sustainable and innovative cities (SDGs 11 & 17). Cities are at their best when they serve as a platform for cross-sector collaboration in pursuit of solutions to local challenges, and as a platform for measurement, knowledge sharing, transparency and accountability.

MIND Milano Innovation District: An ‘innovation geographical cluster’ for SDG-aligned innovation and economic development

‘Innovation geographical clusters’ are government-led initiatives aimed at fostering innovation and economic growth. They are delivered as national and municipal/regional strategies that foster cross-sector partnerships and knowledge transfer among different actors – including corporates, VCs, start-ups, social enterprises, universities, and more. Through these comprehensive strategies, governments provide incentives and opportunities for companies, research institutions, and other supporting organisations to do business and hold activities in specific geographic locations, especially in underdeveloped areas.

The MIND Milano Innovation District in Italy is a great example of an innovation geographical cluster that is focused on developing, commercialising, and scaling solutions in the domains of health-tech (SDG 3), environmental sustainability (SDG 13), digitalisation (SDG 9), and being a city of the future (SDG 11). As part of the legacy of EXPO 2015 in Milan, the Italian government launched the MIND project to create a new district dedicated to innovation and sustainability. Through its partnerships with public and private entities, including universities, research institutes, and multinational corporations, MIND brings together expertise, resources, and funding to support research and development projects in life sciences, data science, and genomics.

Currently, MIND is home to various corporates, start-ups, research labs, mixed-use real estate, garden and garden park space, and hospitals. With both private and public sector investments, the estimated value of MIND stands at €4 billion. With the aim of a city for the environment; well-being; and social impact, the MIND ecosystem generates a physical and digital space for dialogue and inclusion and fosters collaborations between stakeholders in multiple industries.

The Open Data Policy for Sustainable Innovation, Vilnius

Vilnius, the capital city of Lithuania, is a city known for technological and digital innovation and a tech-oriented business ecosystem. With a 2022/23 award for the European Cities of the Future, (a ranking by fDi Intelligence, a specialist division of the Financial Times), the city of Vilnius is working on advancing sustainability and addressing SDG-related local challenges through innovation. It is estimated that around 1.5 million EUR of its overall 5 million EUR annual budget – 30% –  tackles SDG-related issues, with specific strategies for digitalisation (SDG 9) and climate-neutral city (SDGs 11 & 13).

But it’s not only Vilnius’ goals and financing that make this city stand out. One of the key facets of the city’s efforts is its commitment to open data that make information about the city more easily accessible. For instance, the city provides an open data portal and a 3D map of the city on a range of topics such as waste management, traffic flows, and property. This has enabled third parties to develop shared mobility solutions and innovative tools for real estate developers, among others, that make life more convenient for the residents of Vilnius while contributing to the establishment of a smart and sustainable city.

SDGLocal: A municipal platform for the SDGs

To foster SDG-driven innovation ecosystems, we need more transparency and accountability around progress toward achieving the SDGs. This is best done through tools and platforms that enable impact measurement management. In this regard, Portugal’s SDGLocal platform serves as a promising model for replication among municipal-level SDG platforms looking to stay accountable to their constituents on one hand, and clear about progress achieved, on the other.

Launched in 2019 as a joint initiative of several institutions, the National Council for Environment and Sustainable Development (CNADS) and the University of Lisbon’s Institute of Social Sciences (OBSERVA), the SDGLocal Platform is an online portal that allows the visualisation and monitoring of the contributions and progress of each municipality in relation to the SDGs. The platform maps over 600 projects and good practices by municipalities, providing information on their progress towards meeting defined targets. The platform has attracted the participation of 28% of Portuguese municipalities. Partners aim to expand the initiative to 120 municipalities, doubling the number of projects and initiatives mapped by the end of 2023.

In addition to platform management, SDGLocal promotes several complementary initiatives, including an annual conference, awards, certification programs, capacity-building and training programs, and support for municipalities in developing local SDG-aligned strategies. The platform provides an opportunity for municipalities to report and communicate effectively on their contribution and progress towards the SDGs and expand partnerships to address local challenges, thus unlocking the potential for local Portuguese communities to contribute to solving global problems.

Though applicable to an array of use-cases, most technologies have not been explicitly designed to tackle social and environmental challenges or contribute directly to the SDGs. To help hone use-cases that may be applied to the SDGs, the Institute for Transformative Technologies, has identified the ‘50 most critical scientific and technological breakthroughs’ required for the sustainable development goals. 

This blog post introduces how researchers have addressed the ecosystem approach to SDG-tech and presents interesting attempts at establishing standards for ethical and responsible tech. 

Research on innovation ecosystems for achieving SDGs 

Granstrand and Holgersson (2020) defines innovation ecosystems as “the evolving set of actors, activities, and artefacts, and the institutions and relations, including complementary and substitute relations, that are important for the innovative performance of an actor or a population of actors.” This concept is applied to the ecosystems where multiple actors aim to co-create a systemic and transformative innovation to challenge global problems.

‘Digital social innovation (DSI) ecosystems’ is used by Nesta (2015). DSI ecosystems refer to a space where tech entrepreneurs and innovators in civil society are developing digital solutions to social challenges. Using network analysis which maps around 1000 organisations with more than 6000 collaborative DSI projects, this research classified DSI into four different technological trends: open hardware, open networks, open data, and open knowledge. 

The term ‘mission-oriented innovation ecosystems’ is introduced by Jütting (2020), which categorises the typology of ecosystems by its distinct target focus among people, prosperity, and planet. Mission-oriented innovation ecosystems bring together all relevant actors for joint value creation and co-evolution, particularly underlying the role of civil society and research organisations for system-level transformations. The role of public sector and policies were more emphasised by the economist Mariana Mazzucato (2018), who defines the mission-oriented policies as “systemic public policies that draw on frontier knowledge to attain specific goals or big science deployed to meet big problems.” 

Elert and Henrekson (2022) points out Mazzucato’s typology on mission-oriented innovation policies mostly rely on an “overly mechanical view of innovation and economic growth.” Instead, he suggests  the term ‘collaborative innovation blocs’  on the actors and competencies crucial for “an innovative idea that eventually becomes an efficiently produced and widely disseminated high-quality good or service.” 

Ethical practices in technology

Developed by university and sector research employees and research foundation delegates from over the world, the Vienna Manifesto on Digital Humanism is a guide written for digital technologies, encouraging actors to adopt responsible and socially beneficial practices. Released in 2019, the manifesto calls for a Digital Humanism that “describes, analyses, and, most importantly, influences the complex interplay of technology and humankind, for a better society and life, fully respecting universal human rights.” 

The Vienna Manifesto concludes with 8 core principles that underscore the social responsibility of tech research: 

1. Digital technologies should be designed to promote democracy and inclusion. 
2. Privacy and freedom of expression are essential values for democracy and should be at the centre of our activities. 
3. Effective regulations, rules and laws, based on a broad public discourse, must be established. 
4. Regulators need to invoke anti-trust to break tech monopolies. 
5. Decisions with consequences that have the potential to affect individual or collective human rights must continue to be made by humans. 
6. Academics and industrial researchers must engage openly with wider society and reflect upon their approaches.
7. Practitioners everywhere ought to acknowledge their shared responsibility for the impact of information technologies.
8. A vision is needed for new educational curricula, combining knowledge from the humanities, the social sciences, and engineering studies. 

Technology is one of the main pillars of SDG 17: Strengthen the means of implementation and revitalize the global partnership for sustainable development. As more research on sustainable technologies and SDG-driven innovation ecosystems is published, ecosystem actors will gain a better idea of the possibilities afforded by SDG-aligned tech, as well as their respective roles in championing practical and effective solutions to today’s most pressing social and environmental challenges.

We look forward to keeping our eye out for more up and coming research on this emerging trend.

Despite the auspicious findings and the suite of examples of how it can be done, investors have been slow to engage. The blog below presents a roundup of practical resources for investors and companies to use to help get up to speed on how to approach this compelling and timely investment opportunity. 

What are SDG-aligned Investments? 

Simply put, SDG aligned investments are investments that align with one or more of the UN Sustainable Development Goals (SDGs), and often, one or more of a goal’s underlying targets. 

Not so simple, though. The SDGs were initially written as framework for policy makers, not investors. Themes addressed in the SDGs often do not align 1-1 with investment activities, asset classes, and business models that investors might be more familiar with. 

A few resources have been developed to bridge this gap and “translate” the goals in to terms that be easier for investors to assimilate. 

Featured in Framework for SDG-Aligned Finance, the OECD’s Global Outlook on Financing Sustainable Development 2021 provides an overview of what SDG-aligned investments might mean  to different types of private sector actors. For example to investors at Public Development Banks, Central Banks, Sovereign Wealth Funds, Asset managers, commercial and investment banks, pension funds, insurers, rating agencies, stock exchanges, and philanthropies. With the help of this framework, each investor type knows which actions to prioritize in accordance with its respective comparative advantage.

Another resources, the SDG Compass provides guidance for companies on how they can align their strategies as well as measure and manage their contribution to the realization of the SDGs.

Asset owners and asset managers may wish to review the PRI’s Investing with SDG Outcomes, a 5-part framework designed to help investors start applying the language of social and environmental “outcomes” to their investment activities. 

Corporates may consider reviewing the GRI’s paper on integrating the SDGs into corporate sustainability reporting. The resource presents sustainable practices as a way for companies to improve transparency and accountability among customers, a must among today’s corporates. 

How can investors integrate the SDGs into their investment strategies? Are there platforms for sourcing SDG-aligned investment opportunities? Tools for carrying out due diligence? 

Deal Sourcing: 

Investors with a global footprint are encouraged to visit the website of the Global Investors for Sustainable Development Alliance (GISD). Their SDG Investment Platform currently lists 468 live SDG deals across the world in a variety of asset classes. The opportunities are backed by robust research produced by the UNDP and released through their investor maps. 

VC investors may check out Dealroom.com. In 2019 the platform started building a comprehensive dataset on startups making a positive impact. Today, dealroom’s list of European start ups generating positive impact numbers more than 620 startups They distinguish between core and side SDGs: Core = directly aligned with Social Development Goals (e.g. cleaning the ocean); Side = indirectly aligned with Social Development Goals (e.g. shared mobility). 

Pensions may reference the SDI Taxonomy which provides a standardized taxonomy for asset owners looking to invest sustainably. 

The Toniic Impact Theme Framework, is a guide for private investors to help them align their investments with the SDGs and thereby find greater alignment and synergy in global investment opportunities. 

How do I measure my alignment? Resources for SDG impact measurement and management 

To measure the impact of their investments, investors can use IRIS+, a data base of metrics designed for investors looking to achieve measurable outcomes through their investments, or the Impact Management Norms, the best attempt yet at a standardized impact assessment and reporting framework. Both map back to the SDGs in ways that are easy to grasp and work with. 

For enterprises may look at BCorp’s SDG Action Manager, which helps businesses set goals, track progress, and stay motivated on specific actions to support the SDGs. 

Enterprises, private equity investors, and bond issues should explore the SDG Impact Standards designed specifically for these stakeholder groups.

With SDG-aligned investing still not mandated by regulators, the market is rife with untapped investment opportunities. To help investors more readily explore and consider these opportunities, the frameworks mentioned above will be of good help.