The UN Economic and Social Council (ECOSOC) organized the 2021 session of the Forum on Financing for Development Follow-up (FfD Forum) as a hybrid event. Governments and other participants heard that it will take at least five years for the least developed countries (LDCs) and small island developing States (SIDS) to return to their projected development paths, and discussed ways to respond. On the side of the formal meetings, UN entities launched a tool for investors and a set of policy briefs on financing for development.
The Forum convened from 12-15 April 2021, with both in-person and virtual participation. Discussions drew on the 2021 edition of the UN’s Financing for Sustainable Development Report (FSDR), which calls for fresh concessional financing for developing countries, fully funding the Access to COVID-19 Tools (ACT) Accelerator, and a range of measures for liquidity and debt response. In addition to short-term risks, the report highlights that climate change and other growing threats post longer-term challenges to progress. The report calls on all governments to use taxes to better align behavior with sustainable development.
Addressing the Forum, UN Secretary-General Antonio Guterres called for six urgent actions to ensure an “equitable, sustainable and resilient response and recovery from COVID-19”:
- making vaccines available to all countries;
- reversing the fall in concessional financing;
- directing funds to where they are needed most, to reduce extreme inequalities;
- extending debt service suspension into 2022 and other measures discussed during a meeting of Heads of State and Government on the International Debt Architecture and Liquidity hosted by the UN with the Prime Ministers of Jamaica and Canada in early April 2021;
- invest in people through a “new social contract”; and
- relaunch economies to be more consistent with the SDGs and the Paris Agreement on climate change.
Guterres said that by not directing more recovery spending towards green projects, the world is missing “a once-in-a-generation opportunity” to strengthen the response and recovery while accelerating progress across the 2030 Agenda and the Paris Agreement.
UNGA President Volkan Bozkir called for a shift towards debt forgiveness and cancellation. He told participants that LDCs and SIDS will take at least five years to return to the development paths that were projected before the pandemic.
The Forum included a Special Segment on Financing the Recovery from COVID-19 and sessions on investing in sustainable infrastructure, debt and liquidity, and ensuring a climate-resilient future, among other topics.
The outcome document is a set of conclusions and recommendations negotiated in the weeks leading to the Forum. By the text, UN Member States recognize that recovery strategies from COVID-19 “need to be designed to accelerate the implementation of the 2030 Agenda in the decade of action.” They describe the world as “facing a multidimensional health and socioeconomic crisis that is compounded by climate change, biodiversity loss and environmental degradation.” They recognize extensive immunization against COVID-19 as “a global public good for health … in order to bring the pandemic to an end” and resolve to “work tirelessly to ensure timely access for all countries to COVID-19 vaccines, therapeutics and diagnostics.” More broadly, governments recognize universal health coverage as fundamental to achieving the SDGs, and stress investing in resilient health infrastructure as “key to advancing prosperity and sustainable development and alleviating poverty.”
On 14 April, the Global Investors for Sustainable Development (GISD) Alliance and the UN Development Programme (UNDP) launched a tool to facilitate private sector investments that contribute to furthering the SDGs. The GISD Alliance is a group of 30 CEOs working to to scale-up long-term finance and investment in sustainable development; it was established by the Secretary-General in 2019.
The ‘SDG Investor Platform’ aims to provide private sector investors with market intelligence on each country and its local investment landscapes, as well as investor connections. UNDP notes that the Platform builds on the SDG Investor Maps created by its SDG Impact initiative. SDG Investor Maps identifies investment opportunities with both financial promise and impact potential to advance the SDGs.
Leading up to the Forum the UN Department of Economic and Social Affairs (DESA) launched four policy briefs on financing for development. A brief on scaling up private investment in the SDGs focuses on incentives for private financers and investors, which can be addressed through both regulatory measures and specific measures for institutions and industries. It also recommends advancing industry-based standards for impact measurement, and developing a clear set of SDG-related metrics for existing reporting frameworks.
A brief on risk-informed finance argues that “development that is not risk-informed is neither inclusive nor sustainable.” It calls for governments to take the lead on ensuring investments have a risk-informed approach by incorporating risk analysis into their planning processes and aligning the private sector risk landscape with SDG risks, for example through carbon pricing.
The brief on corporate sustainability reporting says “confusion still prevails” for companies regarding the frameworks to follow in providing sustainability-related information about their activities and impacts. The authors recommend that standard-setting bodies consolidate their work into a single, coherent global set of reporting standards, and that policymakers require large companies to report on a core set of metrics.
On blended finance for COVID-19 recovery, a policy brief calls for a new approach to improve the impact of blended finance, including the use of non-concessional resources when possible. [DESA story on FfD Forum] [FfD Forum webpage]