The UN estimates the gap in financing to achieve the Sustainable Development Goals (SDGs) at $2.5 trillion per year in developing countries alone (UNCTAD, 2014).
Whilst governments and the public sector will continue to play a key financing role, particularly in the delivery of essential public services, there is greater scope for the private sector to engage in financing many areas of the SDGs to help close the gap.
Global financial assets are sufficient to meet the financing needs of the 2030 Development Agenda, but the challenge is how to channel them into SDG sectors, enhance the risk-return profiles of new and sometimes vulnerable investments, and generate sustained impact on the ground.
The United Nations seeks to galvanize action on financing for the SDGs by bringing together governments, the private sector and civil society. Towards this end, H.E. Miroslav Lajčák, President of the 72nd General Assembly of the United Nations, convened a luncheon with the business sector (February 2018) and a high-level event on Financing for SDGs (June 2018). He entrusted UNCTAD to become the repository of good practice from the private sector, governments, and international organizations.
The purpose of this website is to present the steps needed to increase private investment in SDG sectors, such as agriculture and infrastructure, as well as improve the sustainability and inclusivity of private investments, which can make a lasting contribution to the SDGs.
This website provides a toolbox of best practice and other initiatives to boost the private financing of the SDGs, as well as cooperation with public sector entities.
There is both a strong need and will for the private sector to engage in financing the SDGs. However, public entities must still uphold aid commitments, avoid excessive subsidies for private sector activities, and ensure that foreign economic activity does not crowd out domestic players. Regulatory reform at the national and global levels is therefore an important element of the SDG financing equation to encourage investment in SDG sectors and protect the public interest.
Financial actors, including institutional investors like pension and insurance funds, manage assets that are invested directly or indirectly through global financial markets and products. Some of these assets can be mobilized for investment in SDG sectors by improving the incentive structure throughout the investment chain and by introducing policy measures that reorient markets away from short-termism and instead encourage greater sustainability performance. At the same time, it is important to develop domestic capital markets.
More needs to be done to promote investment opportunities in frontier markets that may be perceived as risky, and to facilitate investment in real economic activities. Tax incentives and transfer systems, including the use of special economic zones, can help direct finance to SDG sectors rather than encourage aggressive tax planning and avoidance. Multilateral development banks and other investment funds can leverage innovative forms of financing (such as blended instruments and public-private partnerships) and contribute to de-risking and risk sharing. Developing adequate regulatory frameworks and institutional capacity is essential.
Mobilizing and channeling finance to SDG sectors is a necessary but not a sufficient condition for success. To maximize private sector contributions to the 2030 Development Agenda, policy measures need to be put in place to increase the sustainability dimension of investments, for example, environmental targets and employment legislation, or performance requirements in sensitive sectors.
In June 2018, the President of the General Assembly of the United Nations convened a high-level event on “Financing for SDGs–Breaking the Bottlenecks of Investment, from Policy to Impact”.
The event brought together a wide range of representatives from UN Member States, the private sector, UN entities and other international organizations to explore how the United Nations could better align itself with the rapidly-changing world of international finance in support of the 2030 Development Agenda.
Participants took stock of recommendations, initiatives and best practice for investing in SDG sectors in developing countries. This information has been collected and presented as a toolbox of resources for SDG financing on this website.
The toolbox acts as a repository of existing and future global public and private initiatives and, through future interaction with stakeholders, it provides an accessible platform for Member States and financial actors to explore solutions to the challenge of financing the SDGs.
The Office of the President of the General Assembly would like to express its appreciation to all partners that contributed valuable inputs to the toolbox and welcomes future engagement with all stakeholders committed to achieving the SDGs.