The UN has released the 2021 edition of the Financing for Sustainable Development Report, which is published annually ahead of the United Nations Economic and Social Council (ECOSOC) Forum on Monitoring Financing for Development (FfD Forum). The latest report calls for new concessional financing for developing countries, full financing of the COVID-19 Tool Access Accelerator (ACT) and a series of measures for the liquidity and debt response.

The FSDR 2021 identifies the risk that the COVID-19 pandemic will widen the gaps between rich and poor countries. In this “sharply divergent world,” one group of countries are using strong stimulus and numerical acceleration to turn around, while many others find themselves in a more severe cycle of poverty, hunger, debt and austerity . The authors call for immediate action as trends could delay achievement of the SDGs in ten years.

The report calls on all governments to use taxes to better align behavior with sustainable development.

In addition to short-term risks, climate change and other threats are on the rise, which could pose long-term challenges for progress. Among the first measures recommended in the report, it calls on all governments to use taxes to better align behavior with sustainable development, for example through carbon taxes.

Other recommendations follow three themes: investing in people, investing in infrastructure and innovation, and reforming the global architecture for policy and finance. Regarding investment in people, the authors note that household vulnerability is closely linked to the lack of progress on the SDGs, and governments should prioritize spending on social protection and health.

Investing in sustainable and resilient infrastructure, the report notes, is currently “quite feasible” in developed countries with low interest rates. Other countries need additional support in the form of very long-term sustainable funding. The authors suggest using longer-term balance sheet analysis to design instruments that reduce debt vulnerability risks while facilitating long-term investments and taking into account long-term risks such as climate change.

Other recommendations include better leveraging public development banks (PDBs) as a tool for investing in sustainable development and facilitating a new business model for the private sector. Policymakers could take steps to ensure that companies not only focus on short-term financial returns for shareholders, but also consider their environmental and social impacts.

Finally, on the theme of reforming the global financial and political architecture to support recovery from a pandemic and the 2030 Agenda, the report expresses support for:

• an agreement on taxation for a digitalising economy;
• efforts to strengthen sustainability reporting frameworks and impose a minimum level of corporate disclosure; and
• “Reorganizing the multilateral trading system” to make it more efficient and better suited to the priorities of sustainable development.

The report is coordinated and edited by the Financing for Sustainable Development Office of the United Nations Department of Economic and Social Affairs (DESA) and is a joint product of the 60-member Interagency Working Group on Financing for Development. The authors note that the report builds on policy options developed under the initiative on “Financing for Development in the Age of COVID-19 and Beyond” convened by the Secretary-General of the United Nations and the governments of Canada and Jamaica.

The 2021 FfD Forum is scheduled for April 12-15 in a hybrid format combining virtual means and in-person participation at the United Nations Headquarters in New York, USA. Side events will take place virtually. In December 2020, the President of ECOSOC appointed the permanent representatives of Fiji and the Netherlands as co-facilitators of the outcome document of the FfD 2021 Forum. [Publication: Financing for Sustainable Development Report 2021] [UN News]