There has been a lack of progress on most of the UN Sustainable Development Goals (SDGs) in the last year, compounding a worrying longer-term picture. A whole host of factors have left governments and public funding constrained, putting the 2030 Sustainable Development Agenda in real peril.
The SDGs provide a critical guide for governments, businesses and investors on how to accelerate efforts to decarbonise our cities and industries, avoid the most harmful effects of climate change, and build a sustainable and resilient economy; all issues that are in the spotlight in the lead-up to COP27.
They call for multiple areas of global action, from assistance in sustainable debt management and investment in the least developed countries, to knowledge sharing in the areas of science, innovation and clean technologies. While many of these fall under the remit of policymakers and civil society, public funding constraints mean private capital can accelerate the transition to a more sustainable society by helping to close the SDG funding gap. Incorporating the SDGs as part of the wider COP27 narrative is therefore crucial if we are to drive real progress ahead of the goals’ 2030 deadline.
Here, we examine some of the key SDGs and some of the areas governments and investors should be focusing their efforts in order to drive real change.
SDG 7 – Affordable and Clean Energy
SDG 7 (Affordable and Clean Energy) will naturally be a key focus of this year’s COP27 conference. At last year’s COP26 conference, significant international unity on climate planning and the energy transition appeared to be within reach.
However, the Russian invasion of Ukraine has disrupted the global energy system and derailed this progress, generating the biggest surge in energy prices since the 1970s. This, along with other factors, has contributed to the cost-of-living crisis with a disproportionate impact on developing economies. The declining cost of renewables is addressing the challenge of affordability, but a huge infrastructure funding gap highlights the need for private capital to finance the low carbon transition.
That governments are reverting to fossil fuel generation to address the current energy crisis highlights the need to invest in low-carbon sources to ensure energy security and resilience, but the resulting increase in near-term emissions will have serious consequences on global efforts to meet climate goals.
Investors need to deploy capital sustainably towards areas such as renewables, energy efficiency, grid resilience and green hydrogen. Private assets investors can also finance the construction of wind and solar capacity. Capital also urgently needs to reach countries with lower GDPs, as international financial flows to developing countries for clean and renewable energy continue to drop.
SDG 13 – Climate Action
Although Climate Action (SDG 13) is primarily dependent on government action, concerted efforts are required across the public and private sectors to build resilience to the effects of climate change, an inevitable focal point at COP27. Global investment in mitigation hugely outweighs capital allocated to adaptation and resilience.
Investors need to play a role in financing areas such as sustainable infrastructure designed to withstand extreme weather conditions or agricultural innovation to tackle water scarcity and develop drought resistance. Investors can also provide financing to local and regional resilience projects, such as sustainable forest management, protection of wetlands and conservation of coastal flood defences such as tropical mangrove forests.
Investors focused on SDG13 naturally target issues addressed by other goals, such as water security, climate resilient infrastructure, sustainable food systems and circular economy solutions. All have a role in building future resilience to the realities of climate change.
In that context, there are several other SDGs that have a direct climate focus.
For example, SDG 12 (Responsible Consumption and Production) seeks to address growing consumption patterns and the waste it creates, aiming to design out waste from industrial processes and to repurpose any unavoidable waste as a valuable input back into the economic system.
SDG 9 (Industry, Innovation and Infrastructure) will also play a crucial role in pioneering new solutions to the climate crisis, where sustainable infrastructure supports the clean technology and innovation necessary to upgrade today’s carbon-intensive industrial activities.