Future of Our Planet Requires Deeper Cooperation, Long-term Thinking

Credit: Denis Onyodi – IFRC/DRK/Climate Centre

By Liu Zhenmin

For most of the 7 billion people on the planet, global
institutions are remote, far removed from their day to day
existence. Yet, our global institutions matter.

They shape the global systems – such as international trade
rules – that will enable the more than 3 billion poor people
worldwide, who live on less than about 20 yuan a day, to rise out
of poverty.

In 2015, the world’s leaders agreed on the transformative 2030
Agenda for Sustainable Development, which laid out a path to shared
prosperity and sustainability. But implementing the 2030 Agenda
requires a fundamental shift toward sustainability in our financial

The global financial architecture must enable trade and capital
to flow across borders in a way that is stable and sustainable.
This would help fund necessary investments, including in resilient
infrastructure, and help put countries on sound financial footing.
The architecture should also protect against shocks, but allow
rapid responses to shocks when they do occur.

There is some progress to report. A joint assessment of
financing global sustainable development
, just completed by the
United Nations – in collaboration with other international
institutions, including the International Monetary Fund, World
Bank, and World Trade Organization – finds that private sector
interest in sustainable finance is growing.

LIU Zhenmin

Investors gradually realize that the way corporations manage
environmental and social risks can impact financial performance.
Sustainable development is also increasingly incorporated in public
budgets and development cooperation.

But these changes are not happening at nearly the required
scale, nor with the necessary speed. For example, annual spending
on education in the poorest countries alone would need to more than
triple to achieve universal education aspired to under the 2030

The gap on infrastructure financing in developing countries
remains on the order of hundreds of billions of dollars.

In today’s interconnected world, major challenges cannot be
solved by countries acting alone. Rather than retreating from
multilateralism, the international community must strengthen
collective action.

International trade has made a significant contribution to
economic growth and development. When we work together, we can
achieve great things for the good of all people.

The Belt and Road Initiative is an example of how countries are
working together to find new paths to prosperity. The resulting
infrastructure will enhance connectivity between Asia and Europe,
and expand connections with Africa and South America. It provides
important opportunities for countries to deepen cooperation and
deliver sustainable infrastructure.

Achieving sustainable development – particularly eradicating
poverty, reducing inequality, and combatting climate change –
requires a long-term perspective, with governments, the private
sector, and civil society working together.

Yet most private capital markets are short-term oriented and put
pressure on corporate executives to demonstrate profits on a
quarterly basis. A more uncertain world begets even more short-term

Private businesses hesitate to commit funds to long-term
investment projects if economic prospects are unclear. During
periods of financial insecurity, households often focus on their
immediate needs.

If the Belt and Road Initiative could take a long-term
perspective, it will help to build long-term, stable and
sustainable financing into the multilateral system. It can be at
the forefront of efforts to counter short-term behavior.

Aligning both private and public incentives with sustainable
development, and better measuring the impacts of investments and
policies on sustainability, will further our global efforts.
Private financial markets in China, like those in many other
middle-income countries, are growing in size and importance.

If markets are to become a tool that promotes sustainability,
rather than short-term speculation, the policies need to be
carefully designed. For example, governments can price
externalities, such as the cost of environmental pollution,
ensuring that the true costs of investments are recognized and

Requiring more meaningful disclosure by corporations on social
and environmental issues can help. According to a KPMG survey of
about 5,000 companies from 49 countries conducted in 2017, 75 per
cent now publish corporate responsibility reports and 60 per cent
include some sustainability information in their financial

Their efforts should be further encouraged so that some
internationally recognized standards in sustainability reporting
could be agreed in the future. Countries can also promote long-term
investing by supporting efforts to build indices for stock markets
that includes companies with sustainable business practices.

China also blazes the trail in green finance. The green credit
guidelines, issued by the China Banking Regulatory Commission in
2012, is a pioneer example of standards that promote loans to more
climate-friendly projects.

Moreover, China is a leader in green bond issuances. Lessons
learned by China and others can be shared through international
platforms, such as the United Nations, to find synergies and
strengthen policy frameworks.

At this time when greater global cooperation is needed, the
multilateral system is under stress because of a backlash against
globalization in some parts of the world. Initiatives like Belt and
Road can and should demonstrate the positive power of global

It can help reshape both national and international financial
systems in line with sustainable development. If we fail to do so,
we will fail to deliver sustainable development for all. The very
future of our planet is at stake.

The post
Future of Our Planet Requires Deeper Cooperation, Long-term
appeared first on Inter Press Service.


LIU Zhenmin is Under Secretary General for
Economic and Social Affairs, United Nations

The post
Future of Our Planet Requires Deeper Cooperation, Long-term
appeared first on Inter Press Service.

Source: FS – All – Ecology – News
Future of Our Planet Requires Deeper Cooperation, Long-term Thinking