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Financing the 2030 Agenda: What is it and why is it important?

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António Guterres launches his strategy to finance the 2030 Agenda to put the world on a more sustainable path, this 24 September, ahead of the General Assembly’s annual general debate.

How high on the Secretary-General’s to-do list is the 2030 Agenda for Sustainable Development?

Well, the timing of the meeting to discuss financing the Agenda might be a clue: it takes place on Monday afternoon, just before the General Debate of the General Assembly on Tuesday morning, when the eyes of the world will be on UN Headquarters in New York.

A plan to transform the world

The 2030 Agenda for Sustainable Development, commonly referred to as the 2030 Agenda, is being billed as a plan to “Transform Our World.”

In 2015, UN Member States adopted the Agenda and its 17 Sustainable Development Goals, or SDGs, which break down into three broad areas: people, planet and prosperity.

The adoption of the Agenda was significant, as it was the first time that world leaders pledged common action in support of such a universal and ambitious policy agenda. As the name suggests, the organizing principle of the Agenda and the SDGs, is sustainable development, and this is also the key message to the world community.

The UN defines sustainable development as “development that meets the needs of the present, without compromising the ability of future generations to meet their own needs.” This means taking into account, for example, the effects that unbalanced economic growth can have on the environment and people’s wellbeing.

The SDGs provide a framework for sustainable development that improves the lives of everyone, everywhere. For example, ensuring that economies grow and provide decent work; that everyone has access to nutritious food, no matter where they live; and access to quality education for all.

From 2015 until 2030, Member States, civil society and other partners are mobilizing efforts to change the way the world does business: ending all forms of poverty, fighting inequalities and tackling climate change, while ensuring that no one is left behind.

Since 2015, the UN has been hosting several meetings every year, designed to monitor the progress of Member States and partners, including the private sector, in changing business practices to ensure that the SDGs can be met.

The foundations for the financing of the SDGs were laid in July of that year, at the Third International Conference on Financing for Development, which took place in the Ethiopian Capital Addis Ababa, in a document called the Addis Ababa Action Agenda. It provided a new global framework for financing sustainable development by aligning finance with economic, social and environmental priorities; and set out a list of over 100 concrete measures, touching on finance, technology, innovation, trade, debt and data, in order to reach the SDGs.

Progress and setbacks

Since then, there have been positive signs. Just a week ago, at the Global Climate Action Summit, it was estimated that new UN-backed commitments to take action against the damaging effects of climate change could result in $26 trillion in economic benefits worldwide, and help create 65 million new “low-carbon jobs” by 2030.

Many welcome initiatives by governments and companies were noted. For examples, the Investors Agenda, one of the focus areas of the Global Climate Action Summit, brought together nearly 400 investors, managing $32 trillion of assets, who pledged to scale up the flow of capital into climate action, and a more sustainable, low-carbon economy.

However, whilst this new way of running the world presents a huge investment opportunity, public or private resources, and investments remain stubbornly far below what is needed to meet the 2030 targets.

Too much investment remains short-term and volatile, and the systemic change needed  transform economies and societies is not yet happening. Governments need to make it easier for business to finance and invest in sustainable development projects, the private sector needs to mobilize for long-term investment, and new solutions for financing the SDGs must be created.

The High-Level Meeting on Financing the 2030 Agenda

Which brings us back to Monday’s meeting. It can be expected that the timing, and the senior status of politicians taking part, will ensure that considerable attention will be directed to the proceedings, and the outcome.

The Secretary-General will open the meeting, followed by Christine Lagarde, the Managing Director of the International Monetary Fund (IMF). Heads of State and Government will also participate, as well as senior representatives of leading private sector investors, financial technology innovators, and foundations.

Mr. Guterres has indicated that this meeting will be used to build momentum and political support at all levels; step up engagement with the private sector; and make the most of innovative solutions to finance the SDGs.

It will also be the forum for the launch of his Strategy for Financing the 2030 Agenda for Sustainable Development, which has three objectives:

  1. Aligning global financial and economic policies with the 2030 Agenda
  2. Enhancing sustainable financial strategies at the regional and country levels
  3. Exploiting the potential of financial innovations, new technologies and digitalization to provide equitable access to finance.

After the meeting, the process continues, with several follow-ups scheduled for this year, and into 2019. The road is long, complicated and filled with potential potholes, but the commitment from the UN is clear: transform the world for the better by 2030.

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Fast-tracking a Zero Waste Economy: Business Leaders Commit to Circular Economy Action

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Denmark, Japan, the Netherlands and the United Arab Emirates have committed to joining a major global initiative to redesign the global “take-make-dispose” economy into a more circular one. They join over 50 government and business leaders who are part of the Platform for Accelerating the Circular Economy (PACE), which was launched at the World Economic Forum Annual Meeting 2018 in Davos.

PACE includes the heads of some of the world’s largest companies such as Royal Philips and Unilever; senior representatives from the governments of Indonesia, Nigeria, the People’s Republic of China and Rwanda; and heads of organizations, including the Ellen Macarthur Foundation, World Resources Institute, Global Environment Facility, UN Environment and World Bank.

All are committed to efforts that cut waste and pollution and fast-tracking circular economy solutions in which products and materials are redesigned, recovered and reused to reduce environmental impacts. Extending the life of products creates new business opportunities and revenue streams, while minimizing the environmental impact of mining, resource extraction, refining and manufacture.

Japan’s commitment comes as the second World Circular Economy Forum – hosted by the Ministry of the Environment of Japan and Finnish innovation fund Sitra – gets underway in Yokohama, Japan.

Japan is one of the most resource-efficient economies globally, and has recently launched its 4th Fundamental Plan for Establishing a Sound Material-Cycle Society a new public-private Plastics Smart campaign. The Netherlands government aims to achieve circularity by 2050 and halve the use of primary resources by 2030 and Denmark launched its Circular Economy Strategy and a related National Action Plan on Plastics. The UAE is committed to shaping strategic action to advance the circular economy.

To date, PACE, which is hosted and facilitated by the World Economic Forum, has catalysed major projects and collaborations to advance the circular economy, including the Global Plastics Action Partnership, which was launched in collaboration with the Friends of Ocean Action at the Forum’s Sustainable Development Impact Summit in New York. PACE is also focused on waste from electronics. In 2016, 44.7 million metric tonnes of e-waste was generated, equivalent to the weight of 4,500 Eiffel Towers. E-waste contains a number of toxic substances that can cause great harm to health. At the same time, the UN estimates that some 55 Billion Euro worth of secondary raw materials lays idle in e-waste.

Antonia Gawel, Head of the Circular Economy Initiative, World Economic Forum, said: “We have the knowledge, power and technologies to drive circular economy action. We just need to act more quickly and build partnerships to scale solutions. The Fourth Industrial Revolution offers great opportunities in this area – which is why PACE is excited to explore its potential with an expanding group of partners.”

Frans van Houten, Chief Executive Officer, Royal Philips, and PACE Co-Chair, said: “A circular economy is essential if we are to achieve global economic growth whilst stopping unsustainable resource consumption. Large corporations, SMEs and governments must collaborate to transform supply chains and the modern consumption economy. Philips is pleased to partner with private and public sector organizations through PACE enabling large-scale projects with firm commitments and decisive action.”

Naoko Ishii, Chief Executive Officer and Chairperson, Global Environment Facility (GEF), and PACE Co-Chair, said: “It is a real pleasure for me to welcome a growing network of governments to PACE.  The world urgently needs to move to a more Circular Economy, and PACE is a strong platform that brings together a broad coalition of stakeholders to accelerate action.”

Yoshiaki Harada, Minster of Environment, Japan, said: “We all have a common view on realizing a circular economy on a global scale by networking and accumulating knowledge and experience of public and private entities around the world. The Ministry of the Environment of Japan has decided to participate in PACE, and share our knowledge and experience globally. As part of our contribution to PACE, we would like to provide information on excellent actions, experiences and technologies of Japan’s public and private entities registered in our “Plastics Smart” Campaign.”

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ADB Invests $25 Million in Private Equity Fund to Help Small Businesses in Southeast Asia

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The Asian Development Bank (ADB) signed an agreement to provide a $25 million equity investment to Exacta Asia Investment II, L. P. (Exacta II), a private equity fund, to provide much-needed investments for small and medium-sized enterprises (SMEs) in Southeast Asia.

“ADB’s investment will help well-managed and middle-market SMEs in Southeast Asia to realize their growth plans, thereby driving employment, tax generation, skills transfer, and regional trade,” said ADB Director for Private Sector Investment Funds and Special Initiatives Division Ms. Janette Hall. “Investing in Exacta II allows ADB to participate in Southeast Asia’s continued economic growth while providing development benefits for people in the subregion.”

ADB’s support will allow Exacta II to invest growth equity into smaller firms—particularly those from Indonesia, Malaysia, Philippines, Singapore, Thailand, and Viet Nam—whose growth is driven by domestic consumption and export. This will help address the issue of low private equity penetration in Southeast Asia, which is crucial to create new jobs, drive economic growth, and encourage further investments in related sectors.

Exacta II, a private equity fund with a target capitalization of $250 million, intends to invest about $10 million to $40 million per transaction in some of Southeast Asia’s SMEs and lower middle-market companies, particularly in the manufacturing, technology, and service sectors.

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Suzhou Forum Calls for Faster Energy Transformation for Better Lives and Prosperity

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Senior government officials, business leaders and key players in the global energy sector met today at the Third International Forum on Energy Transitions (IFET) in Suzhou, China. The international gathering, co-organized by the National Energy Administration of China, the International Renewable Energy Agency (IRENA), and the Jiangsu Provincial People’s Government of China, is an important platform for dialogue and collaborative action on how to transform energy systems towards a sustainable, low-carbon and resilient energy future.

Over the last decade, renewables have brought disruptive change to the global energy landscape. Driven by rapid technological advances, enabling policy frameworks and plummeting costs, renewables have created unprecedented opportunities to rethink the way our energy systems operate. IFET aims to identify solutions to scale up the latest renewable energy innovations, particularly in end-use sectors, accelerate power sector transformation, increase renewable energy financing, and transform urban energy systems.

In his keynote remarks, IRENA Director-General Adnan Z. Amin stressed the need to take the global energy transformation to the next level by strengthening innovation, mobilizing investments and modernizing gird infrastructure. Accelerating renewables deployment is essential to tackle challenges such as climate change, sustainable development and meeting growing energy demand. The Director-General underlined that the energy transformation offers us vast socio-economic benefits in terms of powering sustainable growth, creating jobs and creating local value-added.

Leading the way on the energy transformation are those frontrunner countries, like China who, early on, recognised the potential opportunities in and are developing the policies, market mechanisms, and systems necessary to reorient their economies towards the high-tech industry and workforce of the future. As highlighted in IRENA’s Corporate Sourcing Report, it is not only countries that are leading the way: companies in 75 countries actively sourced 465 terawatt hours of renewable energy in 2017, enough to power a country the size of France.

In his speech at the Sub-Forum on International Cooperation on Renewable Energy Industry Development, the Director-General also highlighted that international cooperation is needed to share lessons and experiences to overcoming challenges in transforming existing energy structures to low-carbon sustainable systems based on renewables and energy.

During his remarks at the Energy Future session, the Director-General identified five priority action areas to advance the energy transformation. These include: fostering a power sector that integrates higher shares of variable renewables and decarbonising end-use sectors, strengthening system-wide innovation, scaling up investment, ensuring equitable costs and benefits of the transition, and furthering international cooperation.

The previous conferences in 2015 and 2016 adopted the Suzhou Declaration and Consensus, respectively, which called for higher levels of ambition and decisive action to accelerate the energy transition.

IRENA also participated in the Belt and Road Energy Ministerial Conference taking place in Suzhou at the same time. Renewable energy has been identified as central to one of the initiative’s key pillars as a means to build a sustainable energy future.

IRENA

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