DFIs and Global Development Goals
DFIs promote private-sector led growth, which can be expected to contribute to job creation, women’s economic empowerment and climate improvements, as well as poverty alleviation.
The private sector role in reducing poverty
Broadly acknowledged by the international development community to be a key driver of poverty alleviation, the private sector boosts economic growth, job creation and living conditions, the latter through wider access to health and education, as well as essential goods and services. It also stimulates entrepreneurship and contributes to a more diverse economy. It enables governments to bring in more tax revenue, helping them provide more and better public services.
Many of the countries that have produced the most significant reduction in poverty have followed a model where jobs become the major channel through which economic growth uplifts the poor. More than nine in 10 jobs are created in the private sector in low- and lower-middle-income countries. Each new job lifts five people out of poverty (Source: IFC Job Study Report).
2030 Agenda for Sustainable Development and DFIs
During the next six years, the world will continue to work towards the 17 Global Goals for Sustainable Development (SDGs) set in 2015 around the 2030 Agenda for Sustainable Development. Countries will mobilise efforts to end all forms of poverty, fight inequalities and tackle climate change, all while ensuring that no one is left behind.
European DFIs focus and contribute to may SDGs
How European DFIs contribute to SDG 1, SDG 5, SDG 7, SDG 8, SDG 11, SDG 13, and SDG 17
Investing in underserved geographies sectors, and segments by taking a long-run approach that permits higher risks.
Mobilising other investors by sharing risk, being first-movers who demonstrateto other investors how to invest in high risk projects, and by sharing expertise.
Project sustainability to build sustainable sources of jobs and tax income by investing in financially self-sustainable projects, and by applying responsible business standards for environmental social and governance concerns.
Highlighting private business activity, investment and innovation as major drivers of productivity, inclusive economic growth and job creation.
Paris Climate Change Agreement
A global action plan to put the world on track to avoid dangerous climate change, the agreement will also have significant implications for climate finance.
EDFI climate commitments from 2020
- Alignment of all new financing with the objectives of the Paris Agreement by 2022 and net-zero by 2050 at the latest.
- Exclusion of new coal and fuel oil financing, and limiting other fossil fuel financing to Paris-aligned projects until generally excluding them by 2030 at the latest.
- Ambitious individual targets in climate finance and mobilisation of private sector finance, reporting publicly on our progress.
- Strategic investments and provision of assistance to clients to support the development of Paris-aligned projects, and to promote green growth, climate adaptation and resilience, nature-based solutions, access to green energy, and a just transition to a low-carbon economy.
- Climate related financial disclosures in line with high international standards (TCFD).
- Embedding climate action and climate risk management at every level of our institutions.