Introduction

Since the adoption in 2015 of the 17 Sustainable Development Goals (SDGs) and their associated targets, progress has fallen short of the trajectory required. The world is “leaving more than half the world behind,”^[a],[1] with 48 percent of the 138 SDG targets (among a total of 169) being moderately or severely off-track. And over 30 percent have either seen no movement or even regressed below the 2015 baseline.

Compounding the challenges is the changing global order. Growing inequalities between and within countries, exacerbated by the COVID-19 pandemic, are fuelling ethnonationalism and protectionism. Recent geopolitical developments in the United States (US) have led the world’s largest economy to withdraw from the 2030 Agenda for Sustainable Development through an announcement at the UN General Assembly effectively denouncing it.^[2] Additionally, the US has also withdrawn from the UNFCCC (United Nations Framework Convention on Climate Change), the Paris Agreement, the Loss and Damage Fund, and the World Health Organization (WHO), effectively closing any financial and technical contribution from the government to the global SDGs agenda.

While the US’s withdrawal from the Paris Agreement and its broader disengagement from the SDGs agenda by 2030 may influence Multilateral Development Banks (MDBs)—including the World Bank Group and regional banks like the Asian Development Bank, where it is the largest shareholder—these institutions appear to remain committed to financing global development goals, at least at the time of writing. There is a need to catalyse change in global governance and order, particularly among the MDBs. In September 2024, the heads of major MDBs presented their reform plans to the United Nations (UN) leadership, outlining steps to become a better, bigger, and more effective system. The UN Secretary-General emphasised that these MDB reforms are vital to unlocking greater volumes of affordable, long-term financing to bridge the SDGs funding gap, as per the Joint UN and MDB statement in September 2024.^[3]

A key constraint to meeting the SDGs is the lack of development financing. The Third International Conference on Financing for Development (FFD), held in Addis Ababa from 13–16 July 2015, provided a new global framework for financing sustainable development policies and financial flows to economic, social, and environmental priorities under the provisions of the Addis Ababa Action Agenda.^[4] A decade later, the UN Inter-Agency Task Force Report on Financing for Sustainable Development stated that SDG funding is at a crossroads.^[5] This deficit is at the core of the sustainable development crisis, with developing countries requiring additional annual investments of US$4 trillion to meet their targets. The crisis has been compounded by international conflicts, supply chain disruptions, escalating climate-related disasters, fading multilateralism, and increasing trade barriers.