“Leave No One Behind” (LNOB) is the central, transformative promise of the United Nations 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs).
It represents “the unequivocal commitment of all UN Member States to ... reduce the inequalities and vulnerabilities that leave people behind and undermine the potential of individuals and of humanity as a whole.”
But achieving SDGs — the collection of 17 interlinked global goals designed to be a "blueprint to achieve a better and more sustainable future for all" — as well as net zero, decarbonization and climate commitments, requires vast amounts of capital. This has led to the vital need to scale sustainable finance — but therein lies the problem. In a world where global cooperation is of critical importance, emerging economies are at risk of being left behind in the UN SDGs, and it is imperative this situation is rectified for the prosperity of us all.
According to a September 2021 report by Force for Good in collaboration with the UN, SDGs face a financing gap that has soared to up to $100 trillion in the wake of COVID-19 and other urgent global challenges. The “Capital as a Force for Good” report showed that additional annual funding worth roughly a tenth of global economic output will be needed every year to meet the SDGs by the deadline of 2030.
Along with an increase in funding, alternative mechanisms are required so that financing adaptation — the goal of COP27 in Egypt later this year — gets to the most vulnerable and, crucially, bolsters equitable development. The scale of investment necessary, however, to successfully achieve the multitude of green economy and climate goals means that public sectors will require the bold and innovative assistance of the private sector. As addressed by COP28 host the United Arab Emirates in its Sustainable Finance Framework 2021-2031, this means developing modern, sustainable finance products that cover both climate change mitigation and adaptation.
As a global financial center, the UAE has invested heavily in promoting sustainable finance across all sectors. Examples of this include the Dubai Finance Declaration on Sustainable Finance, the UAE Green Agenda 2015-30, the National Climate Change plan 2017-50 and the Net Zero 2050 Strategic Initiative. The long-term commitment and growth of Abu Dhabi Sustainability Week — now more than 15 years old — is another proof point. Added to that is the Abu Dhabi Sustainable Finance Forum, hosted by Abu Dhabi Global Market, which enters its fourth edition in 2022.
And while the public sector cannot bear the burden of finance adaptation alone, there is hope that the private sector will step up. The “Capital as a Force for Good” report showed that $88 trillion in managed or owned assets are now committed to net zero. In addition, some 20% of total assets —$33 trillion — now actively incorporate ESG into investment decision-making. Within the financial sector, a greater commitment to sustainability has also been associated with greater returns to shareholders, with the most advanced institutions significantly outperforming the sector average return over the past five years.
While most of the capital is focused on advanced economies to address pressing local issues, developing countries still have the biggest financial shortfalls. Now is the time that the world realizes that central, transformative promise — and ensures we leave no one behind.
Abu Dhabi Sustainability Week took place in-person and online between Jan. 15-19, 2022. To learn more about the week, visit www.adsw.ae.