June 2019: The UN Department of Economic and Social Affairs (DESA) has published a background note on financing the SDGs, in preparation for the July 2019 session of the UN High-level Forum on Sustainable Development (HLPF). The July session will conduct an in-depth review of SDG 17 (partnership for the Goals). According to the note, the review session will consider recommendations for implementing ideas contained in the outcome document of the UN Economic and Social Council’s (ECOSOC) 2019 Forum on Financing for Development Follow-up (FfD Forum).

The HLPF will conduct in-depth reviews of SDGs 4 (quality education), 8 (decent work and economic growth), 10 (reduced inequalities), 13 (climate action), 16 (peace, justice and strong institutions) and 17 during the July 2019 HLPF. The SDG 17 review is scheduled for 15 July.

The note titled, ‘Financing the SDGs: Moving from words to action: From the ECOSOC Financing for Development Forum to the General Assembly High-Level Dialogue on Financing for Development,’ provides an overview of the context for financing sustainable development. It reports that extreme poverty continues to decline and inequality between countries has fallen, while carbon prices are slowly recovering and interest in sustainable investing is growing. At the same time, debt risks are rising, with a growing number of least developed and other vulnerable countries either in or at high risk of debt distress. The note indicates that some countries have experienced large capital outflows, with aggregate net outflows of over USD 200 billion from developing countries expected in 2018. Furthermore, the authors underscore, official development assistance (ODA) is falling. Net bilateral aid from the OECD Development Assistance Committee (DAC) donors to least developed countries (LDCs) and Africa has declined by 2.7% and 4% respectively.

The note observes that the multilateral system is under stress and, at the national level, while many countries have reinvigorated their sustainable development strategies in line with the 2030 Agenda, many strategies do not have concrete or comprehensive financing plans for their implementation. Furthermore, the publication highlights, policymakers and regulators will need to strike a balance between managing emerging risks and enabling experimentation and innovation when it comes to emerging technologies in finance.

Against this backdrop, the report notes that UN Member States, in the outcome document of the 2019 FfD Forum, agreed on the need to align a wide range of financing sources and instruments with the 2030 Agenda as part of their implementation of the Addis Ababa Action Agenda (AAAA) on FfD. The key messages of the FfD Forum’s outcome will serve as guideposts for the in-depth review, as follows:

• Sustainable investment, including efforts to improve incentives for investments such as more meaningful disclosure on sustainability issues, clarifying fiduciary issues and asset owner preferences, pricing externalities, strengthening policy frameworks to incentivize finance for productive investment, and addressing the challenges to scaling up investments in infrastructure;
• Domestic resource mobilization, including the increasing role that development cooperation will have to play in response to increasing demands of developing countries for capacity support in this area and the need for international tax cooperation to be universal in approach and scope and take fully into account the needs and capacities of all countries; and
• Illicit financial flows (IFFs), including the need for national and collective action by authorities and institutions working across silos (e.g. financial crime, tax policy and enforcement, customs, anti-corruption, and transnational crime) to prevent and counter IFFs and speed up the return of stolen assets.

The note invites reflection on initiatives and tools that could be used to promote sustainable investments where they are most needed, national strategies and policies that have proven effective in facilitating long-term and quality investment, and ways to strengthen tax systems to ensure that countries mobilize domestic resources more effectively.

In September 2019, the UNGA will hold a high-level dialogue on financing for development, which is mandated by the AAAA to take place every four years. [Publication: Background Note: Financing the SDGs]