ETTG Paper, October 2021
During the first ‘Finance in Common Summit’, in November 2020, public development banks (PDBs) from around the world committed to align their activities with the 2030 Agenda and Sustainable Development Goals (SDGs). While there is increasing interest in mainstreaming the SDGs, we still lack an open and deeper discussion of what that means. As a consequence, there is as yet no broad-based ambitious operational approach. The present study is the product of a European Think Tanks Group (ETTG) collaboration aiming both to propose a definition of SDG alignment and to provide concrete principles to further operationalise and promote such alignment in practice. To align with the multidimensional scope of the 2030 Agenda and SDGs, PDBs must incorporate the imperative of the transition to low-carbon, climate-resilient and equitable socio-economic models in all their financing decisions and project cycles. Up to now, many SDG alignment discussions have been limited to mapping exercises. Some actors perceive “SDG investments” as equivalent to infrastructure investments, without questioning whether infrastructures are designed sustainably. The present study applies a much deeper comprehension of the 2030 Agenda, arguing that alignment with the Paris Agreement and SDGs must go hand in hand. Implementing the 2030 Agenda requires PDBs to ensure coherence and spur a profound change on the scale of the entire PDB organisation and across its full range of operations. As such, SDG alignment demands high-level commitment, together with deep governance and, probably, business model restructuring. However, moving from a clear understanding of the 2030 Agenda to a truly operational approach is no easy task. Hence, this study develops four operationalisation principles, along with practical steps to implement them. Together, these provide a guiding checklist for PDBs’ efforts to align their activities with the 2030 Agenda and SDGs.