How the EU can help accelerate the implementation of the SDGs internally and worldwide in 2021


Authors: Guillaume Lafortune and Guido Schmidt-Traub*

Earlier this month, the Sustainable Development Solutions Network (SDSN) and the Institute for European Environmental Policy (IEEP) released the second edition of their flagship Europe Sustainable Development Report(ESDR2020), which tracks the performance of the European Union (EU), its member states, and other European countries on the 17 Sustainable Development Goals (SDGs) agreed by all UN member states in 2015. The report shows how the SDGs can be used as a roadmap for a sustainable and inclusive recovery inside the EU, andhighlights how the European Green Deal/SDG Diplomacy can help to achieve sustainable development worldwide and advance EU geopolitical interests.

Finland in the lead, but major SDG challenges remain in all EU countries

Finland tops the 2020 European SDG Index followed by two Nordic countries – Denmark and Sweden. Yet even these countries face major challenges on the SDGs. There are also major gaps in SDG performance across EU countries.

The EU faces its greatest SDG challenges in the areas of sustainable diets and agriculture, climate, and biodiversity – and in strengthening the convergence of living standards across its countries and regions. This year’s report presents pre-COVID-19 data, demonstrating that even before the onset of the pandemic, no EU country was on track to achieve all 17 SDGs by 2030. The EU and partner countries were performing especially poorly on SDG 2 (No Hunger), due to unsustainable diets, high and rising obesity rates, and unsustainable agricultural and farming practices. There are also significant performance gaps for SDG 12 (Responsible Consumption and Production), SDG 13 (Climate Action), SDG 14 (Life Below Water), and SDG 15 (Life on Land).And the 2020 Leave-No-One-Behind Index included in the report underscores the need for further actions to reduce various forms of inequalities within countries. Convergence in living standards across countries must also be strengthened as highlighted by the large spreads in performance across countries on SDG9(Industry, Innovation, and Infrastructure) and limited convergence over the past five years.

The EU needs an integrated and comprehensive approach to implement the SDGs and must clearly communicate about the SDGs. The COVID-19 pandemic, along with unprecedented pressures on multilateralism and a rules-based international order, threatens the visibility and viability of the SDGs as the world’s shared goals for sustainable development. Therefore, as a first priority, the three pillars of EU governance – the European Council, the European Parliament, and the European Commission – should issue a shared political commitment to the 2030 Agenda and to the 17 Goals.

The 2020 SDG Index for European countries

Source: SDSN and IEEP, 2020. The 2020 Europe Sustainable Development Report: Meeting the Sustainable Development Goals in the face of the COVID-19 pandemic. Sustainable Development Solutions Network and Institute for European Environmental Policy: Paris and Brussels

International spillovers generated by the EU undermine other countries ability to achieve the SDGs

The 2020 International Spillover Index, included in the report, also shows that European countries generate large, negative spillovers outside the region – with serious social, environmental, and economic consequences for the rest of the world.

Examples include the social costs of inhumane work conditions in some value chains. For instance, imports of textile products into the EU are related to 375 fatal workplace accidents and 21,000 non-fatal accidents every year. The EU also generates environmental spillovers through deforestation, greenhouse gas emissions, and other pollutants embodied into international trade or the export of waste and toxic substances, as well as financial spillovers through unfair tax competition and security spillovers through the export of arms to conflict zones. Such spillovers undermine other countries’ ability to achieve the SDGs, and they are a stain on the EU’s legitimacy and international reputation.

The EU must urgently address these negative international spillovers. This will require coherent trade and external policies through Green Deal Diplomacy, strengthened tax cooperation and transparency, the application of EU standards to exports, and curbing trade in waste. Moreover, the EU needs to systematically track such spillovers and assess the impact of European policies on other countries and the global commons.

The 2020 International Spillovers Index for European countries

Source: SDSN and IEEP, 2020. The 2020 Europe Sustainable Development Report: Meeting the Sustainable Development Goals in the face of the COVID-19 pandemic. Sustainable Development Solutions Network and Institute for European Environmental Policy: Paris and Brussels

Three priorities to curb negative international spillovers

As part of its SDG strategy, the EU should undertake three broad sets of actions to curb negative spillovers.

Firstly, it must ensure coherent trade and external policies. It is right, for example, for European countries to ask how the MERCOSUR trade agreement will support the objectives of the Paris Agreement, and for the Commission to include binding commitments to implement the Paris Agreement in each trade agreement. The combination of strong EU diplomacy coupled with technical and financial support, where necessary, to protect critical ecosystems and strengthen labour standards and other social outcomes will ensure the EU’s legitimacy and preclude it from being seen as “protectionist.”

Secondly, the EU must strengthen tax cooperation and transparency. One of the most pervasive negative SDG spillovers is the loss of public tax revenues in developed and developing countries due to unfair tax competition, profit shifting, tax secrecy, and the abetting of money laundering. These resources are then no longer available to governments for investment in the SDGs in their own countries. Fortunately, the new EU Commission has begun to address the issues of unfair tax competition among Member States with renewed vigour, and European countries are the forefront of efforts under the OECD to address in 2021 the tax challenges arising from the digitization of economies, tax transparency, and information exchange for tax purposes.

Thirdly, the EU must lead by example by applying EU standards to exports and curbing trade in waste. Data in the ESDR2020 shows, for example, that companies in many EU countries export toxic agrochemicals that are banned inside the EU. The same applies to the export of waste. While such exports may be perfectly legal, they counteract the commitment to achieve the SDGs in every country. Thus, the Green Deal, its subsidiary policy instruments, and future trade agreements should be clarified to ban such exports. Efforts under the Circular Economy Action Plan to make manufacturers responsible for the safe disposal and recycling of their products must also extend to wastes that would otherwise be shipped beyond Europe’s borders.

Using SDG / European Green Deal Diplomacy to advance global SDG action in 2021

At a time when multilateralism is under unprecedented pressure, European partnership, diplomacy, and soft power must play a critical role in advancing the EU’s internal and external priorities, including the SDGs. This should extend to both high-income and low-income countries alike. The European Green Deal has attracted major international attention, and other countries are keen to partner with European initiatives and experiences in mutual learning and transformation processes. The COVID-19 pandemic has only further spotlighted the importance of multilateralism.

The EU is poised to lead on multilateral SDG Diplomacy, but it is no longer alone on the international stage. China has committed to carbon neutrality before 2060 followed by Japan and South Korea’s pledges to carbon neutrality by mid-century. The incoming Biden Administration in the US has also pledged to achieve carbon neutrality by 2050.

EU leadership and diplomacy will be critical to advancing key multilateral processes towards achieving the SDGs, including at the UN General Assembly, the High-Level Political Forum on the SDGs, the G7 Summit (under UK Presidency in 2021 and German Presidency in 2022), the G20 Summit (under Italian Presidency in 2021), and the Annual Meetings of the International Monetary Fund and the World Bank. Of particular importance, will be leadership from the EU – alongside China and the UK – in ensuring successful COPs in 2021 on biodiversity in Kunming and on climate in Glasgow.

One of the most important bilateral relationships for the EU is with China. While there are many areas of profound disagreement between the EU and China, both powers share a commitment towards promoting sustainable development. With China hosting next year’s COP of the Convention on Biological Diversity, and the EU (through Italy) co-hosting the Climate Convention COP, the EU has a huge opportunity to explore common grounds in this geostrategic relationship. In particular, China’s carbon neutrality pledge offers the chance for deeper cooperation under Green Deal Diplomacy, including on the question of border tax adjustment tariffs and other level- playing field requirements. Additionally, the recently launched high-level EU-China dialogue on the environment – bringing together the First Vice-President of the EU Commission, Frans Timmermans, and Vice Premier of the State Council of the People’s Republic of China, Han Zheng – may become an important channel for Green Deal diplomacy and help set the stage for the EU-China heads of state summit.

As European countries work to recover from the COVID-19 pandemic, strategies to ‘build back better’ must be aligned with the SDGs. The needed steps are bold but ultimately feasible, and current proposals by the Commission point the way. China’s carbon neutrality pledge and the election of Joe Biden in the United States hold the promise for greater multilateral cooperation on climate change and other SDGs. We must count on the EU and European countries to lead these efforts.

*Guillaume Lafortune and Guido Schmidt-Traub, Sustainable Development Solutions Network (SDSN)