Halfway to 2030

The 2030 Agenda for Sustainable Development and the Paris Agreement collectively form an action plan with the aim of leading to peace, prosperity, lower emissions and sustainable growth. Halfway to the year 2030, we can see that developments are not heading in the right direction. Progress on some goals has stalled, while progress in other areas is regressing – a trend exacerbated by the global crises of recent years. Part of the solution to reverse the trend is sustainable investments in companies that can contribute to inclusive economic growth, job creation, digitalisation and the green transition.

Three children doing a colorful painting on the asphalt

Artikeln i korthet

Lorem ipsum dolor
Portföljbolagens verksamhetsländer och det är där våra investeringar skapar utvecklingsresultat. Vårt arbete tar avstamp i vår förändringsteori (Theory of Change). Det innebär att vi gör en analys av hur en potentiell investering kan bidra till förändring samt vilka direkta och indirekta

THe sustainable development goals (SDGs) were adopted in 2015 by all UN member states. The years following its adoption saw a number of positive trends. Extreme poverty and child mortality continued to decline. Progress was made in the fight against diseases such as HIV and hepatitis. Access to electricity in the poorest countries improved, as did the proportion of renewable energy sources in the energy mix. Globally, unemployment was back at levels not seen since before the 2008 financial crisis.

Today, it is clear that much of this progress was built on fragile foundations, and that too little progress was made in many areas. Several interconnected and global crises, including the coronavirus pandemic, Russia’s invasion of Ukraine and the ongoing climate crisis, have presented significant additional challenges to implementation. 2023 marks seven years left until 2030, the year the goals must be achieved. Despite the negative trend, it is still possible to reverse the development and positively influence individuals, societies and the climate and, in the long run, contribute to more voices being heard and more opportunities for action for developing countries that are particularly vulnerable.

How are the SDGs progressing?

The UN’s assessment of the approximately 140 targets for which data is available shows that around half of the targets are heading in the wrong direction. If current trends persist, an estimated 575 million people will continue to live in extreme poverty by 2030, with only around a third of countries achieving the target of halving national poverty levels. Global hunger is back at levels not seen since 2005, and food prices are still higher than in 2015-2019. In addition, the window for limiting global warming to 1.5^oC is shrinking, which is what will be necessary to prevent the worst effects of the climate crisis.

At the current rate, it will take an estimated 140 years for women to be equally represented in leadership positions in the workplace, and 47 years to achieve equal representation in national parliaments. Approximately 660 million people will continue to lack access to electricity, while nearly two billion individuals will be reliant on fossil fuels in 2030. Given this context, there remains a significant demand for sustainable investments.

Developing countries worst affected

Developing countries and the poor are to a greater extent affected by these developments. Since the pandemic, many countries are grappling with unprecedented increases in debt and an economic situation further exacerbated by high inflation, rising interest rates and geopolitical tensions. The limited fiscal scope restricts governments’ capacity to implement reforms and launch support packages to strengthen the economy, enterprises and societal resilience. The capital available in the global financial system is sufficient, but not enough is being channelled to sustainable development to the extent and speed that is necessary to achieve the SDGs and the Paris Agreement. The funding gap for developing countries to achieve the goals is estimated at USD 2.5–3 trillion per year.

However, there is a silver lining. There are positive developments taking place within digitalisation, with millions of people now having access to mobile networks and an internet connection. The increase is particularly rapid among low and middle income countries. Digitalisation is fundamental for sustainable and inclusive development and plays an important role in innovation, growth and job creation.

Investments promote growth

Trade and investments are mutually reinforcing and promote economic growth in developing countries. Between 1990 and 2017, the share of global exports among developing countries rose from 16 to 30 percent, while over the same period, global poverty levels fell from 36 to nine percent. Though not all countries have benefited equally, trade has overall generated strong economic growth and helped lift around one billion people out of poverty. At the same time, conducting trade between African countries is both expensive and time-consuming due to structural and actual obstacles such as a lack of infrastructure, weak institutions, corruption and the fact that many countries export similar and competing products. According to the United Nations Conference on Trade and Development (UNCTAD), only around two percent of global trade in 2015-2017 occurred between African countries. The corresponding figure for Europe was 67 percent. The African Continental Free Trade Area (AFCFTA) agreement signed in 2021 has the potential to expand intra-African trade, deepen regional integration, and promote investment on the continent.

The situation in developing countries in Asia is different. A rapidly growing middle class and consumption patterns that have shifted due to the coronavirus pandemic has led to a strong recovery and a growing digital economy. Trade is more integrated within the region than in sub-Saharan Africa, but certain trade barriers continue to present challenges.

Sustainable investments can help to improve value chains locally, link a country’s economy with global value chains, and foster economic growth and innovation. At the same time, foreign direct investments in Africa account for only 3.5% of total global flows in 2022. Development finance institutions operate in high-risk environments and can help mobilise additional private capital to developing countries through extensive experience and knowledge of sustainable investments in challenging contexts.

The importance of partnership and collaboration

The 2030 Agenda is underfunded and development finance institutions have a key role in accelerating its implementation. To succeed, we must leverage the efforts of various stakeholders who, with their respective mandates, methods and tools, can collaborate effectively to achieve common objectives.

Investing with other like-minded organisations is important to bring about change. Swedfund is one of 15 members of the European Development Finance Institutions (EDFI). At a strategic level, EDFI’s agenda is harmonised with the Sustainable Development Goals. We often work together, and more than half of all investments are made with one or more development finance institutions. Swedfund also works in partnership with other organisations, including civil society organisations, development banks, other business partners and traditional aid organisations. Together, we can accelerate the pace of investment in developing countries and contribute to the realisation of the SDGs.

Our contribution to the SDGs

Swedfund contributes to all of the sustainable development goals. Poverty reduction (Goal 1) is directly linked to our mission. Our focus on gender equality (Goal 5), decent work (Goal 8), equality (Goal 10) and climate (Goal 13) permeates all of Swedfund’s operations and investment processes.

The role of digitalisation

Shifting the African narrative