When the United Nations sustainable development goals (SDGs) for 2030 were launched in 2015, the call was for private capital to step up where public sector budgets could not – five years on, the heads of financial institutions have now turned that call back to governments. To reach these goals, governments are going to need to do a few things too.
This was recently laid out in the Global Investors for Sustainable Development report. The heads of 30 global financial institutions made 64 specific recommendations calling for greater public sector engagement to support the financing of the SDGs. The recommendations include: support of a strong carbon price; the mandating of the Task Force on Climate-related Financial Disclosures; a reconsideration of subsidies that artificially keep brown industries in business; and new blended finance vehicles.
A louder voice calling for greater co-design of solutions is exactly what is needed. A new era of far greater collaboration between private finance and the public sector will have important implications – from the creation of new national green banks to the cross-pollination of the public sector and private finance workforce.
According to the Natural Resources Defense Council, more than 35 countries and jurisdictions now are exploring the use of green banks, compared with 12 just a couple of years ago
The growth of green banks shows that this is already happening.