1. CONCEPT NOTE FOR SESSION 3
FINANCING FOR SUSTAINABLE DEVELOPMENT – SCALING UP
RESOURCES FOR BETTER RESULTS
Paris, France | 21 February 2019
1) We are not living up to the SDG financing challenge
The 2030 Agenda calls for an ambitious financing strategy for sustainable development: one that can tackle
the dual challenge of mobilising unprecedented volumes of resources and at the same time of leaving no one
behind. Beyond international public resources, other flows - taxes, private investment, philanthropy and
remittances - are increasingly needed to achieve this.
The 2019 Global Outlook on Financing for Sustainable Development presented the new landscape of
development co-operation, and the role of the different actors called upon by the Addis Ababa Action Agenda
(AAAA) to deliver the Sustainable Development Goals (SDGs) and the 2030 Agenda. The Global Outlook
demonstrates that, 4 years after the AAAA was signed, the expected surge in finance available for those
countries to achieve the SDGs has not materialised. Government revenues –- remain on average in low income
countries below the 15% of GDP threshold often considered necessary for effective state functioning.
Worryingly, the overall supply of external resources to developing countries has declined. Private investment
in particular has shown a sharp decrease, with FDI dropping by 30% over 2016-17 to USD 750 billion, and
project finance decreasing by an alarming 30% in the first trimester of 2018 alone.
Other major financial flows are stable, but remain small in comparison: remittances by migrants reached a
record high of USD 466 billion in 2017; official development assistance (ODA) is steady despite fiscal pressures
in provider countries at USD 146.6 billion in 2017; and philanthropy contributes an average of USD 7.9 billion
a year over 2013-2015. Innovative finance still accounts for a minor share of official providers’ efforts, although
it is growing.
2) Innovative financing is urgently needed
Despite efforts by all actors concerned, the financing for sustainable development gap is growing. While needs
continue to increase, resources available to developing countries have been constrained and in some cases
even declining, as illustrated by the recent drop in foreign direct investments. New financial instruments and
interactions have yet to mobilise much-needed new resources in sufficient volumes and deliver SDG
compatible projects while not adding to unsustainable debt levels for both the public and private sectors. In
addition, despite significant advances, we do not yet fully understand the opportunities and risks faced by the
various actors in this complex new global financing system.
The OECD is at the forefront of innovation in the financing for sustainable development landscape, promoting
the mobilization of new actors, such as the private sector through blended finance or sustainable impact

2. investment. It also innovates with new instruments and modalities that are better fit for purpose, i.e. tailored
to countries specific context and development needs.
The Total Official Support for Sustainable Development (TOSSD) statistical framework aims to provide a
comprehensive picture of officially-supported resource flows toward the implementation of the 2030 Agenda
in the developing world, thus providing more transparency specifically about financing beyond ODA and
private finance mobilised through official development finance interventions. TOSSD is a recipient-focused
metric, measuring cross-border resources (financial and in-kind) to developing countries, but can also include
support to countries and territories that have graduated from ODA and still face important development
challenges. There is no target attached to TOSSD. It is designed to complement and not replace ODA, which
remains the measure to assess traditional donors’ performance against the 0.7% ODA/GNI UN target.
In 2017, the OECD DAC has also adopted the Blended Finance Principles for Unlocking Commercial Capital for
the SDGs and the multi-stakeholder Tri Hita Karana Roadmap is currently being promoted for endorsement as
a framework for good practice of blended finance.Blended finance and social impact investment work
complementary in responding to the challenge of financing sustainable development – mobilising the trillions
and shifting them towards sustainable and measurable outcomes. Green finance underlines the need for a
shift towards sustainable investment. Together they form a set of effective approaches and tools to leverage
private finance for sustainable development. All three financing approaches can help address the financing
gap for the SDGs and COP24 Paris Agreement by crowding in additional commercial finance with the help of
blended finance models; linking investments to measurable impact; and transforming investments to align
with green pathways.
The Ocean economy is projected to grow at twice the pace of the world economy. By 2030, the ocean
industries could more than double its contribution to global value added, reaching USD 3 trillion, and are
expected to employ approximately 40 million full time equivalent jobs. At the same time, the oceans are under
severe stress from human activity. There is an increasing recognition of this, including in international co-
operation and policy fora; at the same time, a gap exists in terms of a clear policy framework to harness this
growth potential in a manner that is environmentally and socially sustainable.
3) How can we strengthen our collective efforts?
Financing for sustainable development is a fast-changing ecosystem that includes more actors, instruments
and modalities, and more interactions among those. While diversity brings more opportunities, it also creates
complexity. The multiplication of actors and openness to innovation have led to the use of more diverse
instruments in the Financing for Sustainable Development market. Innovation is taking place at a fast pace,
with a plethora of new instruments, but it has yet to achieve its full potential. Bringing innovation to scale to
harness its potential for sustainable development calls for a learning process with investment in capacities.
Technology, partnerships and competition being key drivers for innovation.
To ensure financing for sustainable development achieves the desired results, the OECD has recently
promoted a call to action which is reflected in the Impact Imperative and rests on four pillars: the financing
imperative (shifting the trillions), the innovation imperative (piloting new approaches), the data imperative
(transparency and standards) and the policy imperative (policy tools and evaluation). Indeed, “going from
billions to trillions” can appear daunting, to the extent that it may discourage further budgetary efforts in
difficult macroeconomic contexts. “Shifting the trillions” acknowledges that most of said resources are already
there, in the global economy, but need to be better targeted to sustainable and inclusive growth.
Questions

3. • What are the opportunities for public and private actors to help “shift the trillions”, including private
finance, tax, remittances, and philanthropic flows in support of long-term financing strategies that
build resilience and help to avoid setbacks when ODA is phased out?
• How can we ensure that private finance mobilised in the framework of development co-operation
lives up to the same standards of transparency and development effectiveness as other aid
modalities?
• What is the role of development co-operation in supporting sustainable ocean economies?