World ‘Off Track’ in Efforts to Meet Development Agenda, urging Joint Efforts to Harness Resources
Following are UN Secretary-General António Guterres’ remarks at the High-level Dialogue on Financing for Development, in New York on 26 September:
Across this high-level week, we have highlighted the need for much greater urgency and ambition in our efforts to achieve the Sustainable Development Goals and address the climate emergency.
Financing is the test of our seriousness. Without resources, we will simply not deliver for people or planet. But with adequate, predictable, sustainable funding, everything is possible. We face a steep climb. We are not on track to achieve the Goals. We are not mobilizing anywhere near the financing we need, public or private. Declining levels of official development assistance (ODA) and rising levels of debt are limiting spending on the Goals.
Almost one third of the world’s least developed countries are currently in — or at high risk of — debt distress. Heavily indebted small island developing States, wrestling with the sky-high costs of climate-related devastation, are a special concern.
At the same time, it is true that we have promising news to build on. Financial markets are increasingly integrating sustainability in the way they carry out their activities. Various investors, insurers and stock exchanges have adopted social responsibility and sustainable principles.
Earlier this week here at the United Nations, the principles for responsible banking were adopted by banking institutions, committing a sector worth $35 trillion to sustainable practices. Investors are paying greater attention to the environmental footprints of the companies in which they invest and demanding more information and disclosure about climate risks and other related threats to bottom lines.
Several financial institutions have already started to implement the recommendations of the Task Force on [Climate-related] Financial Disclosures; we need every single company to do so urgently. This, too, can promote the shift to sustainability.
There is more than $200 trillion in private capital invested in global financial markets, often at negligible rates of return, some even negative rates of return. These funds can be channelled towards more productive sustainable investment projects, including by making use of innovative financing instruments. These are already making their mark but need significant scaling up. The green bond market has grown by 45 per cent. The use of social impact bonds has also grown significantly but there is still a long way to go.
And while transaction costs for remittances are still too high, there have been notable steps to reduce them. This can help this major source of financing to play an even bigger role in national economies, particularly for those who are further behind, including migrants and their families.
Our challenge now is to build on this progress. That is the aim of the Road Map for Financing the 2030 Agenda for Sustainable Development that I have put forward. First, we must align the international financing system behind the Sustainable Development Goals. That means removing the disincentives to long-term financing and encouraging the financial industry to take full account of the true risks of unsustainable practices.
Second, we must support individual countries as they mobilize domestic resources for financing their sustainable development strategies. The United Nations system stands ready to support the development and implementation of integrated national financing frameworks, in line with countries’ commitments.
Third, we need to address the exclusion from financial services that has afflicted so many people. I have set up a task force that is exploring how the digitalization of finance can contribute to accelerating inclusive and sustainable development. Women must be a particular focus for inclusion — especially poor women, women entrepreneurs and female heads of household. Least developed countries, where private financing is lowest, must also be a priority.
Fourth, international cooperation is an imperative. Collaboration is crucial in cracking down on tax avoidance, tax evasion, corruption and illicit financial flows that deprive developing countries of tens of billions of dollars of potential resources for their development every year. Cooperation will also be necessary in addressing the new challenge of taxing the digital economy.
It is also critically important for the donor community to maintain and further increase the level of ODA, which is essential for the sustainable development efforts of so many developing countries in line with the commitments made in the Addis Ababa Action Agenda.
Multilateral development banks can play a key role in bringing public and private finance together, in de-risking private financing for critical projects, and in funding for infrastructure, especially in countries that cannot attract sufficient private investment. We need to find ways for big money to flow to small projects.
Next month, I will convene 30 Chief Executive Officers from every region to launch the Global Investors for Sustainable Development Alliance, which collectively manage nearly $16 trillion. I will count on their support in translating these priorities from aspiration to action and aligning finance with national sustainable development strategies.
Today’s Dialogue on the central question of financing can help get us on track for the “decade of action” ahead. Let us all raise ambition for development finance, climate finance, and finance that will enable markets to grow, businesses to thrive and people to live in dignity.