The Role of Policy-Driven Institutions

Performance Framework: Needs

A key starting point for assessing the adequacy of sustainable finance are measures of the ammount of finance need, and the financing gaps to address key social and environmental challenges. This includes
  • Capital investment needed for critical priorities such as clean energy, biodiversity, climate change, food security, water and sanitation.
  • Capital needed to be shifted away from unsustainable activities, such as the most resource intensive, and polluting activities, and extensive and inefficient physical infrastructure that locks in resource-intensive consumption.
  • Capital which needs to be reserved against conditions that could challenge sustainability, including insurance against the consequences of the realization of environmental risks.
Estimates of the amount of finance needed in key areas, and the amount of finance that needs to be directed away in others have been undertaken at the international level. For example UNCTAD estimates that US$5-7 trillion a year is needed to finance the Sustainable Development Goals. The Commission on the Economy and Climate estimates some US$5.7 trillion of investment will need to be reduced in fossil fuel extraction and power generation between 2015 and 2030. Similar calculations are taking place nationally.  
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