2030 Agenda and Sustainable Finance in order to create a sustainable future

Translated by Alessandra Fumagalli 

We are approaching 2030, the fixed year by the United Nations to achieve the sustainable development goals (SDGs) of the 2030 Agenda, but there is a significant distance between the achievement of them. The 2019 UN sustainability report highlighted the need for more vivid actions and more ambitious policies in order to achieve the economic and social transformation needed for the SDGs. Among the most important issues, there are those regarding climate change and inequalities. Climate change, with its devastating visible effects and potentially irreversible, can make big areas of the planet uninhabitable, especially the most vulnerable ones. Meanwhile, inequalities, together with poverty, famine and illnesses, are spreading in other countries, arising several worries for the future generations. As far as this matter is concerned, the United Nations suggest committing to sustainable finance development from now on.

What does this mean?

The sustainable finance, also known as green finance or responsible finance, is a financial approach that integrates ESG criteria (environmental, social and governance) during investment, loan and money management transaction. The most crucial goal of the sustainable finance is to promote the sustainable development, that is a type of development that meets the needs of the present without compromising the ability of future generations to meet their own needs. This type of approach performs in responsible investment that try to support companies that adopt sustainable policies and that respect ESG’s standard. Also microfinance and social obligation and green bond are important, whose aim is to focus on the supply for financial services, like loans, microcredits, to those people and low-income communities in the developing countries, in order to support entrepreneurship and to promote the inclusive economic development. Green bond integrates, meanwhile, also financial tools that let the issuer to collect capital to be used for specific projects with social or environmental benefits, as the construction of sustainable buildings, the supply for basic social services or the preservation of environment. In general, sustainable finance has the objective to generate long-term value not only for the investors, but also for the whole society, contributing to the solution of social and environmental issues and promoting a more equal and more sustainable economy.

More recently, the UN General Secretary Guterres, restated the need to drastically accelerate the actions to achieve the SDGs in the further decade, since some goals are not improving and others are following the wrong path. The impact of the Covid-19 pandemic has worsen the situation, being not only one of the most sever health crisis, but also social and economic since the Second World War.

The UN 2030 Agenda, approved in September 2015, underlines the importance of the green finance as integrating part of the actions to achieve the Sustainable Development Goals (SDGs). Although 2030 Agenda doesn't give a specific definition of what green finance is, it promotes a series of actions and goals in line with the principles of this sustainable economy. 2030 Agenda encourages indeed the Member States to use national and international financial resources to face the challenges of the sustainable development, underlining the fact that actions of one state can positively or negatively influence the effects on climate change and environmental preservation. As a consequence,  the public and private investments in the sustainable infrastructures, in the renewable energies, and the sustainable management of natural resources and other initiatives that promote the inclusive economic development, being respectful towards the environment goes hand in hand. Each goal of the 2030 Agenda aims to promote small actions to achieve big results in terms of environmental preservation.

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