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Global Outlook on Financing for Sustainable Development 2021

A New Way to Invest for People and Planet

image of Global Outlook on Financing for Sustainable Development 2021

The Global Outlook on Financing for Sustainable Development 2021 calls for collective action to address both the short-term collapse in resources of developing countries as well as long-term strategies to build back better following the outbreak of the COVID-19 pandemic. The financing gap to achieve the Sustainable Development Goals (SDGs) in developing countries was estimated at several trillions of dollars annually before the pandemic. The report demonstrates that progress to leave no one behind has since reversed, and the international community faces unprecedented challenges to implement the holistic financing strategy set out in the Addis Ababa Action Agenda (AAAA). The report finds that trillions of dollars in financial assets held by asset managers, banks and institutional investors are contributing to inequalities and unsustainable practices. It highlights the need to enhance the quality of financing through better incentives, accountability and transparency mechanisms, integrating the long-term risks of climate change, global health, and other non-financial factors into investment decisions. The report concludes with a plan of action for all actors to work jointly to reduce market failures in the global financial system and to seize opportunities to align financing in support of the 2030 Agenda for sustainable development.

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The financing for sustainable development landscape in the coronavirus (COVID-19) crisis

The financing for sustainable development landscape faces new pressures and challenges. The outlook presented in this chapter is worrying. Financing levels were insufficient prior to coronavirus (COVID-19). With the onset of lockdowns and the economic recession, the pre-pandemic financing gaps are widening and the decline in resources is markedly faster and more sizeable than during the global financial crisis 12 years ago. The chapter reviews trends and projections in domestic, international, public and private finance and highlights the negative impacts of the 2020 crisis on collective prospects to mobilise resources for the global goals. Better measures to assess the quantity and quality of scarce resources, i.e. their alignment and impact, are needed to make sure every dollar contributes to achieving sustainable and inclusive development.

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