SDGs alignment

The 2030 Agenda remains incomplete in terms of financial arrangements. Public Development Banks (PDBs) have a unique role to play in reorienting economy towards the SDGs. Therefore as a leading group of national and regional development banks, committed to work jointly to reach the SDGs and the Paris Agreement, IDFC has created a working group dedicated to SDGs alignment.

 

The adoption of the SDGs in 2015 set a common agenda to be achieved by 2030, providing a systemic framework for sustainable development strategies. The Addis Ababa Summit highlighted the importance of mobilizing the entire financial system, including domestic and private sector financing for development, but the financial tools to implement it and the frameworks to assess its progress have yet to be defined and the implementation of its action plan scaled-up and accelerated.

 

In 2018, IDFC partnered with the international think tank Center for Global Development and produced a first report on key success factors and challenges in implementing SDGs by IDFC members.

In 2019, IDFC decided to engage more substantially on Sustainable Finance and SDG Alignment, building on its historical anchoring on Climate and Paris Alignment Finance. Two main works were conducted:

  1. a first survey of members’ existing approaches to characterize SDG compatibility of activities and investments;
  2. a first internal position paper, consolidating IDFC contribution to the Alignment of Finance with the SDGs.

 

In 2020, IDFC investigated and studied all fields to unleash the potential of its members and Public Development Banks in achieving the SDGs, focusing more specifically on five key topics:

  • PDBs’ mandate
  • Regulation
  • Business models with a two-track approach on (i) innovative business model and (ii) impact of COVID-19 on business model
  • SDG framework on members’ approaches to characterize the activities vis à vis the SDGs; this substantial work has been captured in a publication by which IDFC stands ready to pursue this work with the finance community towards the elaboration of basic principles characterizing the alignment of finance with the SDGs, to improve global knowledge and accountability; IDFC also explored the OECD SDG tracker using Artificial Intelligence to map the SDGs
  • International development Finance Architecture: the deliverable was an internal position paper focusing on members financing instruments, modalities, grant funding, SDG-related financing, and partnerships and calling for more access to multilateral partnership and multilateral finance.

 

Key messages from these deliverables have been integrated in a position paper published in October 2020.

 

To capitalize on previous works and to go a step further, IDFC launched a dedicated study with Natixis CIB (Green and Sustainable Hub) on SDG alignment to provide IDFC members with a conceptual framework as well as practical ways, tools and processes to implement it. IDFC members had the opportunity to test and further explore the tools and concepts developed in the study during a 2-day seminar in Paris. Based on exchanges with IDFC members and other stakeholders, the final study published in December 2022 is notably presenting a literature review on SDG advancement, a stocktaking of existing practices and concrete tools and recommendations for PDBs to fully play their role on achieving SDGs.

“Development of common language around the definition, tracking and accounting of SDG-aligned finance and investment, is essential to ensure that all types of investors, public and private, local and international, are working in the direction of sustainability. This is why CDG, as an IDFC member, is proud to contribute to our collective efforts in this aim”