On the eve of Climate Week, UNEP published a short report about how policymakers can accelerate the availability of financial flows to fund sustainable development. Entitled: Financing Sustainable Development: Moving from Momentum to Transformation in a Time of Turmoil, UNEP cited an ever-increasing number of attempts being made to meet the trillion dollar funding requirements of the Sustainable Development Goals (SDGs) and the Paris Agreement.
While we see the existing response by institutional investors, central banks and financial regulators accelerating, today’s pace of innovation will fall short of refocusing finance on the needs of the real economy as it transitions to sustainable development.
Incoming President of the UN General Assembly, Ambassador Peter Thomson, who provided a foreword for the Inquiry’s report, said: “We have to be creative in mobilising finance from every possible source and ambitious in exploring how to work together in aligning our global financial system with sustainable development.”
The report says taking current momentum of financial market innovation to the next stage can address major gaps in SDG funding such as how to provide private capital for sustainable agriculture, forests, coastal regions and the oceans.
The 2030 Agenda for Sustainable Development and the Paris Agreement represent the most ambitious multilateral goals ever set. These goals require an unprecedented mobilization of both public and private finance – some US$90 trillion over the next 15 years.
Momentum is also growing to align at a more fundamental level the financial system with sustainable development. Despite this positive momentum, progress remains inadequate, with an accelerating decline in all major ecosystems, and growing economic inequality and social challenges.
Five steps are proposed to embed financing for sustainable development at the heart of tomorrow’s global financial system and deliver the much-needed transformation.
- National financial market reform and development plans to embrace consideration of the Sustainable Development Goals and Paris climate commitments, and vice versa.
- Financial technology mobilized to support the accelerated alignment of the financial system with sustainable development, particularly for developing countries.
- Public finance to undergo a disciplined analysis and, as required, redeployment to align to the Sustainable Development Goals and Paris climate commitments.
- Investing in awareness-raising and building key capabilities, so that the financial community can effectively implement new approaches and plans.
- Development of common methods, tools and standards to enable sustainable development priorities to be measured and incorporated into financial practice.