Financing gaps are deepening, according to a new United Nations report published Tuesday.
Amid spiking global food and fuel prices, the U.N. fears conflict in Ukraine is dramatically worsening the economic outlook and the risk of widespread debt crises, especially among developing countries. Already set back by the COVID-19 pandemic — which plunged 77 million people into extreme poverty in 2021 — the gap between investing in sustainability development and climate solutions is only further widened.
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Vaccine inequality and clean energy transitions were also addressed in the report titled: “The 2022 Financing for Sustainable Development Report: Bridging the Finance Divide.”
The report said the war in Ukraine will exacerbate existing challenges and breed new ones, with higher energy and commodity prices, renewed supply chain disruptions and higher inflation pointing to newfound volatility. In it, research showed that one in five developing countries’ gross domestic product per capita would not return to 2019 levels by the end of 2023, and that’s before absorbing the impacts of the war in Ukraine.
The U.N. fears an “either-or” approach to spending, with refugee spending diverting investment in developing economies.
Among the key points, the report stressed the need for regulators to adopt globally consistent corporate sustainability reporting standards for both privately owned and listed companies, as well as disclosure norms (an idea the SEC is toying with).
“As we are coming up to the halfway point of financing the world’s Sustainable Development Goals, the findings are alarming,” U.N. Deputy Secretary-General Amina J. Mohammed said in a press release. “There is no excuse for inaction at this defining moment of collective responsibility, to ensure hundreds of millions of people are lifted out of hunger and poverty. We must invest in access for decent and green jobs, social protection, health care and education leaving no one behind.”
The report championed investments in resilient and clean infrastructure, social protection or public services, some of which is already taken up by the private sector in various ESG and corporate social responsibility efforts. The report also informs the SDG Investment Fair, which brings together government officials and investors to direct financing flows toward sustainable development.
Among the positive notes, the European Union’s recovery plan and the Jobs Act in the U.S. were highlighted as strong performances. The amount of sustainable bonds issued doubled to more than $1 trillion, while sustainability-themed funds grew 62 percent from 2020. Meanwhile, private equity and venture capital investment in developing countries reached a record $230 billion (up from $150 billion in 2020).
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