The Role of Sustainable Finance in Achieving Sustainable Development Goals: Does It Work?

Abstract

The World Bank and International Monetary Fund reported that the achievement of the 17 Sustainable Development Goals (SDGs) requires an escalation of development finance. The report Scaling Finance for the Sustainable Development Goals highlighted the urgency of the efforts to realize SDGs in encouraging financial innovation to move quickly. Even if the role of finance in achieving SDGs is unquestionable, few scientific studies have addressed these issues. We tried to fill the existing research gap. In this study, we examined the link between sustainable finance and SDGs based on European Union countries belonging to the OECD. We present a new and the original research approach. We assumed that the sustainable finance model plays a fundamental role in implementing SDGs (all SDGs were analysed except for SDG 6 and SDG14, due to lack of statistics were not analysed) and ensuring that social and environmental sustainability are reflected in SDGs. The results of this study show that the more sustainable the finance model, the better the achievement of SDGs in the group of analysed countries. We found a strong link between sustainable finance model and social sustainability (SDG1, 3, 4, 5, 10, 16); environmental sustainability (SDG11, 12, 13, 15) and economic sustainability (SDG8, 9, 17).

Environmental Production Efficiency in the European Union Countries as a Tool for the Implementation of Goal 7 of the 2030 Agenda

“…On the other hand, in the current strategy aiming to achieve as many as 17 different goals, it was decided to immediately identify the goals and appropriate indicators that should be related to each other. Moreover, in this case, some of these assumed relationships are not observed in reality, which was confirmed, among others, by the results of the research presented in [4,5], examining in detail the relationship between the various goals of the strategy.…”

Assessing statistical link between FinTech PEST environment and achievement of SDGs

“…In 2017, a framework for Sustainable Finance was introduced, presenting a Sustainable Finance typology based on the value created -ranking of financial value, social impact, and environmental impact factors as well as the horizon (Schoenmaker, 2017). Ziolo et al (2021) confirmed the relationship between achievement of SDGs and sustainable financing, which was the strongest in countries that use Sustainable Finance 3.0, oriented to social-environmental impact first and a common good value in the long run. The paper adapts this data by incorporating FinTech PEST environment assessment results and carrying out comparative data analysis to assess whether any link or trend 9 shows the results of the comparative analysis.…”

“…Meanwhile for SDG achievement assessment, the data generally partially covering the years 2010-2020 were used. Therefore, SDG achievement data from 2016 were used (Ziolo et al, 2021). Some limitations were observed in the comparative analysis as well -Lithuania and Spain as representatives of the Conventional Finance model took average positions in the FinTech PEST environment ranking despite poor performance in the achievement of SDGs and the Sustainable Finance, therefore, stood out as the only countries that did not follow the general trend of the results.…”

“…Correlation analysis is conducted to evaluate a possible statistical link between FinTech PEST environment indicators, determined in the previous step, and the SDG achievement indicators. For this purpose, the data on SDG achievement progress for the same 15 countries was collected (Ziolo et al, 2021) and three different correlation calculation methods were applied -Pearson linear product-moment correlation coefficient, presented as Formula 1, Spearman rank correlation coefficient, presented as Formula 2, and Kendall tau rank correlation coefficient, presented as Formula 3. The Student's statistical formula was used to determine the significance of the correlation coefficient, presented as Formula 4.…”

“…FinTech PEST environment assessment tool adaptation Source: Pauliukevičienė and Stankevičienė (2021).To perform correlation analysis and clarify the strength of the relationship between the FinTech PEST environment and implementation of SDGs, the statistical data of SGDs was used(Ziolo et al, 2021), where the indicators describing the 15 SDGs of the latest strategy for sustainable development were used to calculate the values of SDGs for 2016. However, not all SDGs have an interface with the FinTech sector, since some of them focus on third countries and environmental protection, so the values of eight SDGs were selected for further research, provided in Table4.Correlation analysis is one of the main types of analysis to assess the statistical link between the two variables.…”