Private capital to help solve global challenges
Public financing alone will not be sufficient to ensure implementation of the measures and expenditure required for meeting global sustainability challenges. Published today, 28 March, Finland’s sustainable financing roadmap presents an agreed objective and set of actions for expanding the role of Finnish participants in financing a sustainable future. The roadmap was drawn up as a collaborative exercise between the public, private and third sectors. It represents the first step towards an internationally effective financing ecosystem.
In autumn 2018 the Ministry of Agriculture and Forestry commissioned a national study on the development of financing models that support the UN’s Sustainable Development Goals (SDGs) and on establishing a shared vision of the future. In a sustainable financing ecosystem, private capital will be directed in a purposeful way towards solving global sustainability challenges, and the effectiveness of actions will be determined. Effective and sustainable financing structures will also encourage exports of Finnish know-how and solutions.
The study, carried out by Gaia Consulting Ltd, concluded that Finland should establish a national network of parties involved in financing SDGs. The network should have the tasks of promoting the emergence and operation of new financing structures, targeting the actual financing, and coordinating the impact report process. For this to succeed it will be necessary for participants in the public and private sectors to work closely together towards the same goals. Public capital of EUR 50–100 million, for example, could be used to seek private capital of EUR 150–500 million for sustainable investments.
“The roadmap was prepared on an inclusive basis, involving collaboration with a range of different stakeholders representing, for instance, investors, ministries, businesses and public financing entities. Sustainable development is about risk management, but it is also a major opportunity. The creation of an internationally effective financing ecosystem will enable Finland to punch above its weight in the efforts to solve global sustainability challenges,” says Jaana Husu-Kallio, Permanent Secretary at the Ministry of Agriculture and Forestry.
Renewable energy solutions, sustainable agriculture and forestry, and responsible water services can all be profitable as business activities and productive investment fields. A number of international studies support the view that only investments which conform with the principles of sustainable development can genuinely represent profitable and sustainable choices, in both the short and long term, from the investor’s viewpoint as well.
The United Nations has defined 17 SDGs that must be achieved by 2030. These goals, set out in the Agenda for Sustainable Development, emphasise the eradication of poverty and the fight against inequalities and climate change. The guiding principle is that no-one should be left behind.
Estimates suggest that achieving the goals will require investment of more than EUR 4,000 billion annually in developing countries alone. Current actions are not sufficient to cover even half of this. With the level of international public development cooperation being approximately EUR 130 billion, it is clear that private capital is needed if the goals are to be achieved. Finland’s sustainable financing roadmap, published today, is a roadmap for mobilising private capital for SDG investments.
Timo Halonen, Ministerial Adviser, Ministry of Agriculture and Forestry, tel. +358 295 162411, timo.halonen(at)mmm.fi
Seppo Rekolainen, Director of International Water Cooperation, Ministry of Agriculture and Forestry, tel. +358 295 162086, seppo.rekolainen(at)mmm.fi
Max von Bonsdorff, Director of Unit for Development Finance and Private Sector Cooperation, Ministry for Foreign Affairs, tel. +358 295 351720, max.vonbonsdorff(at)formin.fi
Mikko Halonen, Leading Consultant, Gaia Consulting Ltd, tel. +358 40 7002190, mikko.halonen(at)gaia.fi