07 May 2015
By Marcos Athias Neto
Phasing out fossil fuels is one way to reduce investment in areas that can be harmful to the SDGs. Photo: UNDP in Somalia
In this blog series, our experts share their thoughts and lessons learned on key financing for development issues, in the run-up to the UN’s Financing for Development conference in July. Unmet investment needs in the Sustainable Development Goals (SDGs) are estimated in the range of USD 3-7 trillion a year in developing countries alone with an annual gap estimated at about USD 2.5 trillion (PDF). Not everyone agrees on costing the SDGs (see this mea culpa), but these numbers clearly point to the scale of the challenge. A large share of the resources needed to fund the new agenda will come from the private sector - businesses, foundations and investors. Governments will need to implement policies that align larger shares of private flows to the SDGs. The challenge for the private sector is to move towards inclusive and sustainable business models - thus going beyond the concept of philanthropy and voluntary corporate social responsibility - without undermining profitability. How to achieve this? Within businesses themselves, solutions lie in innovation, new business models, and the right leadership. This needs to be combined with better regulatory frameworks, smart public incentives, and changes in consumer demand. What can be done to foster these changes?