Covid-19 is threatening the progress of the UN’s Sustainable Development Goals (SDGs), but could the global effort to tackle the virus lead to a more collaborative approach towards reaching the SDGs?
There are rising concerns that the Covid-19 pandemic will set back the progress made in sustainable development in recent years as recessions take hold and unemployment levels rise.
Indeed, a recent UN report states that “a prolonged global economic slowdown will adversely impact the implementation of the 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change”.
The 2030 Agenda incorporates economic, social and environmental aspects of sustainable development, and includes the 17 Sustainable Development Goals (SDGs). The goals consist of eradicating poverty and hunger while providing good health and well-being; quality education; gender equality; clean water and sanitation; affordable and clean energy; decent work and economic growth; reduced inequality; sustainable cities and communities; responsible consumption and production; and climate action, among others.
“The SDGs represent the aspirations of countries around the world to develop and achieve sustainable prosperity,” says head of financial sector risk at research firm Verisk Maplecroft James Lockhart Smith. “So I think the circumstances are very negative for policymakers trying to improve development outcomes in their countries: the pandemic is bad news for these longer-term aims, especially progress out of poverty, as well as national accounts and labour markets in the near term.”
The agenda, which was adopted in 2015, has set the target of accomplishing sustainable development on a global level by 2030. However, achieving the same goals worldwide by the same deadline is a tough task as many developed countries have reached some of the goals already. On top of this, the wider social and economic problems caused by the Covid-19 pandemic look set to further dent the progress of developing countries when it comes to meeting these targets.
The list of top ten nations with the most confirmed cases of Covid-19 is a mix of developed and developing countries, according to figures from GlobalData. The US had the highest number of confirmed cases as of 8 June, followed by Brazil, Russia and the UK.
“Lockdowns have been an effective answer if you are a well-governed country with enough economic resources to ride out the storm, where a large proportion of the population can work remotely, and many others can be supported with temporary transfers of funds to individual workers or to businesses to continue to pay those workers,” says Lockhart Smith. “But for many developing countries, maintaining restrictions for long enough and stringently enough to bring infection rates down has not been an option. The outlook is bleak.”
He adds that the economic and development-related ‘gaps’, as well as others linked to the SDGs such as no poverty, zero hunger, and decent work and economic growth, will unfortunately increase in many areas as a result of the pandemic.
“There is a role here for investors and corporates to creatively and sensitively support their remediation when getting involved in projects in those areas – for example, in the way they think about any local hiring or procurement policies, or structure their tax affairs, or shape any corporate social initiatives,” says Lockhart Smith.
SDGs at risk?
With investors shifting their focus from establishing operations in low-cost developing countries and moving towards localising facilities, or relocating operations closer to origin countries, the expected drop in foreign direct investment (FDI) income will present a financial headache for many developing countries. The UN Conference on Trade and Development (Unctad) estimates that FDI flows are set to drop by 30–40% during 2020 and 2021 as a result of the Covid-19 pandemic.
This creates a challenging environment for reaching the SDGs, as many were expecting some of the goals to be missed prior to the outbreak of the pandemic.
Indeed, a 2019 report from non-profit organisation the Social Progress Imperative predicted that the SDGs wouldn’t be achieved until 2073 without substantial worldwide action.
“We need to be thinking about Covid-19’s impact on different aspects of the SDGs, but also the different impacts in the immediate and long term,” says CEO of the Social Progress Imperative Michael Green.
He highlights that the spiralling number of deaths and illnesses caused by Covid-19 are going to be a setback for the SDGs in terms of health in the short term. Another more immediate blow to the SDGs, he adds, has been the manner in which many authoritarian governments around the world have used the pandemic to restrict human rights.
When it comes to longer-term impacts, Green says that economic growth is an important contributor to social progress, so the effects of the lockdown in terms of economics, supply chains and international trade are worrying.
“If we are seeing an economic slump and a slow recovery, and if that is going to mean the breakdown of supply chains and the breakdown of flows of immigration, then that is going to be a further setback to the SDGs,” he explains.
Green adds that another long-term effect is related to public budgets, as governments are having to spend large sums of money in response to Covid-19, which could lead to fiscal retrenchments that would negatively impact public services, including health and education, resulting in a further setback to reaching the SDGs.
An analysis by NS Media Group finds that, as of 10 April, North America and western Europe are the two regions where governments have pledged the largest fiscal support on average as a percentage of gross domestic product (GDP), based on data from the Covid-19 Economic Stimulus Index published by the Centre for Economic Policy Research. The NS Media Group analysis examined economic policy packages from 164 countries.
Despite the seemingly endless slew of negative headlines, there has been a rise in global collaboration and solidarity in response to Covid-19. This, according to Anthony Miller, the focal point for corporate sustainability and responsibility at Unctad, gives reason for optimism regarding the SDGs. Green has also seen some positive developments, including a reduction in gas emissions and lower crime levels in some countries as a result of the lockdown.
Benjamin Fielding, market head of business development at business services provider TMF Group, says that US importers are investigating diversifying production from China to other Asian countries, including India, and this shift of production would be positive in terms of SDGs for a number of countries in the continent.
“It is too soon to predict that the goals will be missed by 2030 as there is a 15-year timeline from 2015 that was adopted, and we are only five years into that, leaving two-thirds to run, so there is still space to bounce back from any challenges that the pandemic has created,” says Miller. “History teaches us that ten years is a lot of time to make significant progress when there is concentrated effort.”
Indeed, Fielding highlights that people are optimistic about an economic rebound, and the faster the rebound, the faster people will refocus on the SDGs.
According to a recent report from TMF, a majority of business leaders believe that it will take less than a year for the global economy to recover from the Covid-19 crisis. However, 22% believe that the global economy will take 18 months to recover, and 22% believe that it will take two years or more.
Problems such as poverty, hunger and climate change are not going to go away without a concerted global effort. The Covid-19 crisis shows just how fragile such targets can be when faced with a worldwide disaster. However, if countries can combine to fight the pandemic, this will hopefully lead to more joined-up thinking to tackle the issues targeted by the SDGs.
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