Financing the Sustainable Development Goals (SDGs) requires significant public and private investment to bring these goals to life for all people, everywhere.
Financing Sustainable Development – The Challenge
The financing for sustainable development is available, given the size, scale and level of sophistication of the global financial system – with gross world product and global gross private sector financial assets estimated at over US$ 80 trillion (World Bank Databank, 2017) and US$ 200 trillion respectively (Allianz Global Wealth Report, 2018). However, available finance is not channeled towards sustainable development at the scale and speed required to achieve the SDGs and goals of the Paris Agreement. The financing gap to achieve the SDGs in developing countries is estimated to be US$ 2.5 – 3 trillion per year (UNCTAD World Investment Report, 2014).
Channeling available finance towards the SDGs is constrained by a range of challenges including:
- Uneven economic growth and unsustainable patterns of production and consumption; rising inequality and debt levels; and the devastating impacts of conflict and climate change, especially for most vulnerable.
- Limited fiscal space and institutional capacity to formulate a pipeline of bankable SDG investment projects, and weak financial systems.
- Misaligned incentives and regulations, limited awareness, and difficulties in identifying, measuring and reporting on sustainable investments.
At the same time, financing sustainable development brings new, exciting opportunities. Evidence shows that investing in the SDGs makes economic sense, with estimates highlighting that achieving the SDGs could open up US$ 12 trillion of market opportunities and create 380 million new jobs, and that action on climate change would result in savings of about US$ 26 trillion by 2030 (Business and Sustainable Development Commission, 2017; Better Business Better World; Report of the Global Commission on the Economy and Climate, 2018).
The Secretary-General’s Strategy and Roadmap for Financing the 2030 Agenda
The UN Secretary-General released a four-year Strategy for financing the 2030 Agenda for Sustainable Development on 24th September 2018 during a High-level Meeting at UN Headquarters in New York. The Strategy underscores the UN’s critical role in supporting and accelerating the mobilization of finance. It focuses on three objectives to transform the financial system from global to local levels in support of the 2030 Agenda by addressing the barriers that constrain channeling finance towards sustainable development, and leverage opportunities to increase investments in the SDGs at scale:
- Aligning global economic policies and financial systems with the 2030 Agenda.
- Enhancing sustainable financing strategies and investments at regional and country levels.
- Seizing the potential of financial innovations, new technologies and digitalization to provide equitable access to finance.
The Secretary-General’s three-year Roadmap for Financing the 2030 Agenda provides a pathway for implementation of the Strategy. The Roadmap, which reflects actions and initiatives to mobilize investment and support for financing the 2030 Agenda, includes three parts.
Part I: Specific actions and ‘key asks’ championed by the Secretary-General, where his leadership can galvanize the required change.
Part II: Priority areas highlighted by the Secretary-General to enhance the work of the UN system to accelerate financing for sustainable development.
Part III: Detailed mapping of activities by the UN system itself, offering for the first time, a comprehensive overview of the UN’s approach and value addition in financing for sustainable development. The mapping of UN activities is not intended to be exhaustive and will remain a living document, evolving with the UN’s support to Member States in this area.
As the world moves into the final decade for achieving the SDGs, the Secretary-General’s Financing Strategy and Roadmap puts accelerating investments in sustainable development at the heart of the UN’s efforts to support countries ramp-up implementation of the Addis Ababa Agenda for Action – the global framework for financing sustainable development.
The release of the Secretary-General’s Financing Roadmap in 2019 is particularly relevant within the context of the 74th session of the UN General Assembly. Key summits and high-level meetings will be held in September 2019, taking stock of progress made on the SDGs since 2015, increasing commitments to scale up SDG implementation and raising ambition on climate action. In particular, a High-Level Dialogue on Financing for Development will be held on 26 September 2019 – the first since 2015 – creating an opportunity to put financing for development challenges front and centre and advance solutions to help unlock the resources needed to achieve the SDGs for all.