ADDIS ABABA ZERO DRAFT WWF REACTION 9 April 2015 Summary WWF welcomes the zero draft of the Addis Ababa Accord (16 March 2015) as a positive initial draft for a global framework for financing sustainable development. The outcome of the International Conference in Addis must build on past accords but also reflect the new reality of the Sustainable Development Goals (SDGs) and targets and the changing financing landscape. This reaction identifies a number of positive elements in the zero draft as well as areas where the zero draft should be strengthened. General comments Positive elements in the zero draft accord include: The reframing of the accord as a global framework for sustainable development and the commitment to policy coherence for sustainable development at all levels ( 5), including through national strategies and integrated national financing frameworks ( 7) and multilateral financial, investment, trade and development policy ( 101). The recognition that investment in ecosystems is a core area for achieving synergies across the SDGs ( 10) and that investments in marine, freshwater and terrestrial ecosystems are part of the solutions to financial crises, food crises, water crises and natural disasters ( 67). The commitment to implement the Extractive Industries Transparency Initiative ( 23) and to tackle cross-border illicit financial flows ( 27). The recognition of the damaging effects, of illegal logging, illegal fishing, poaching and illegal trade in wildlife to local populations and loss of revenue and a clear commitment to provide financial resources and technical assistance( 24). The recognition that business practices need to be more in line with sustainable development objectives and that governments have the responsibility to develop regulatory systems to align business incentives with sustainable development ( 38). Page 1 of 6
The agreement to incorporate sustainable development as a core objective in all tax and revenue policies, including incentives ( 18) and to create strong regulatory frameworks on Environment, Social and Governance (ESG) practices, including mandatory integrated reporting for large companies ( 40). The reaffirmation of the importance of meeting in full existing commitments under international conventions, including climate and biodiversity finance and the Green Climate Fund ( 60) and the commitment to raise additional public resource to achieve the SDGs ( 19). The clear recognition of the need to strengthen the coherence and consistency of multilateral financial, investment, trade, and development policy ( 101). Key principles which should be reinforced The zero draft includes important commitments and recommendations with respect to the various streams of finance, as well as systemic issues and other critical Means of Implementation (MOI) such as technology, innovation and capacity building. However a number of areas merit greater clarification, strengthening or tightening so that clear principles and actions emerge. In particular, the Addis Ababa Accord should clearly communicate: The principle that all development finance should be climate-sensitive, environmentally sound and respect human rights. The principle of accountability of all actors at all levels with clear roles and responsibilities; implemented at national level through national multi-stakeholder forums for strategy design, implementation and monitoring and including civil society, private sector and local authorities. Clear guidelines for Public Private Partnerships (PPPs) to ensure adherence to development effectiveness principles and agreed criteria for greater sustainable development impact. Beyond GDP indicators of progress to account for the multidimensional nature of poverty and well-being and to inform policy development and investments for the benefit of people and planet. Page 2 of 6
Additional specific comments A global framework for financing sustainable development The zero draft includes a number of key principles and commitments, including on policy coherence for sustainable development, reaffirmation of and commitment to build on the Monterrey Consensus and Doha Declaration, cohesive national sustainable development strategies, enabling national and international policy environments and the fundamental responsibility of governments for sustainable development. WWF strongly welcomes the focus on achieving synergies across the SDGs, including through investment in ecosystems, and the clear calls for sustainable and responsible investment for sustainable agriculture, infrastructure and cities. We also strongly welcome the commitment to ESG reporting frameworks for the private sector, and the systemic approach to coherent policy, financing, trade and technology frameworks for protecting ocean and terrestrial ecosystems, preserving biodiversity and fighting climate change. We support the call to Multilateral Development Banks (MDBs) to further develop instruments to channel resources towards sustainable development sectors. The encouraging and constructive ideas contained in the zero draft should be translated into concrete proposals for the MOI for the Post-2015 agenda. Encourage business to embrace our commitment to sustainable development ( 9) and develop in greater detail expectations for business, civil society and academia in terms of data and monitoring functions. The Accord should confirm that global funds should be responsive to country priorities, be transparent, promote country ownership and capacity strengthening as well as include stakeholder engagement ( 11). Addis Ababa Action Agenda A - Domestic Public Finance WWF welcomes the support for national sustainable development strategies ( 17), the focus on public country-by-country reporting by multinational enterprises, on the automatic exchange of tax information ( 25) and on the integration of sustainable development in all tax policies and agreements ( 18). WWF further welcomes the recognition that additional public resources are needed to achieve the SDGs ( 19) and the commitment for transparency and participation in budgeting process ( 30). The Accord should recommend that all countries take immediate action and make use of existing mechanisms internationally, regionally and domestically to tackle environmental crime ( 24). Provide clear targets for strict procurement directives to spur sustainable production ( 30). Increase the level of ambition to eliminate harmful subsidies ( 33). WWF recommends eliminating and transforming fossil fuel subsidies towards a pro-poor Page 3 of 6
equitable energy policy that provides clean, affordable and reliable energy to all. Furthermore, WWF calls for negotiations on agriculture and fisheries subsidies on the Doha Development agenda to be finalized. Adding concrete recommendations to putting a price on carbon and natural capital accounting ( 34) in order to operationalise these ideas. For instance, strong policies, renewable energy targets and energy efficiency standards (at national and, where appropriate, regional levels), incorporation of natural capital accounting into national strategies and assessments of national economic performance. B - Domestic and International private business and finance The clear recognition that business practices should be more in line with sustainable development and the need for a regulatory framework are positive elements ( 38). We support the recognition that we need better management of the risks associated with leverage of private finance through public finance. Other positive notes are included in paragraph 39, 40, 52, especially the weaknesses of pooled finance and Public Private Partnerships (PPPs), and the need to develop and adopt principles and guidelines and mandatory integrated reporting. Clarify the definition of sustainable and resilient infrastructure ( 50, 53) and sustainable industrialisation ( 48). We assume this refers to low-carbon development. Mandatory integrated reporting should be promoted ( 40) and should be coupled with third party verification systems. Request public disclosure of sustainability lending criteria by financial institutions ( 40). Redirect the energy sector traditional investment in fossil fuels by stimulating investments in renewable energy and energy efficiency and cutting investments in fossil fuels ( 50). Commitments to eliminate harmful fisheries subsidies by reforming fisheries subsidies and reallocating funds to promote the transition towards improved fishing practices ( 76). C - International public finance The role of International public finance in mobilising additional resources and addressing sustainable development challenges is presented with a progressive agenda, including the call for no regression with respect to past international agreements on ODA ( 58, 57) and the reaffirmation of past commitments ( 60). WWF welcomes the recognition that more funding will be needed, including for low-carbon and climate-resilient development, conservation of biodiversity and combatting land degradation and desertification and related R&D ( 60) and the importance of aligning all financing flows with the three dimensions of sustainable development ( 61). WWF also welcomes the call for greater progress on innovative sources of additional financing ( 62) and the call to the Multilateral Development Banks to further develop investment channels for sustainable development ( 63, 65). WWF strongly welcomes the acknowledgement of the critical importance of biodiversity for poverty eradication and socioeconomic development, the recognition Page 4 of 6
that investments in marine, freshwater and terrestrial ecosystems as part of the solutions to financial crises, food crises, water crises and natural disasters ( 67) and the commitment to enhance public and private contributions to the Global Environment Facility ( 68). Commitment for all development finance to be climate-sensitive, environmentally sound and respect human rights. Pledge to ambitious ODA commitments of at least 0.7% of GNI and agreed timelines ( 56) and strengthened mutual accountability and transparency ( 59) for all actors with appropriate mechanisms for data and reporting. The Accord should clearly state that MDBs efforts to make safeguards application less burdensome must not involve the weakening of safeguards and standards to achieve sustainable development outcomes ( 63). New and additional public sources of financing are required for the protection and restoration of biodiversity and for tackling climate change ( 62) among other things. Innovative sources and mechanisms of financing need to be put in place such as financial transaction taxes. Given the scale of the impacts, countries should deliver new and additional climate finance to meet the needs over and above their provision of existing aid commitments, including the 0.7% target and should not divert these existing aid commitments to meet their climate finance obligations. As a first step, countries should begin by committing to ensure that climate finance that qualifies as ODA is part of a rising overall aid budget and is rising at least at the same rate. Since the estimated costs of addressing climate change are so high, the existing target of $100bn annually by 2020 should be met primarily through international public finance. This will allow for leveraging the much greater financial flows required in for clean and sustainable technologies and infrastructure. D - International Trade for Sustainable Development WWF welcomes the recognition of the potential of regional economic integration to promote growth and sustainable development ( 79) as well as the commitment to strengthen safeguards in investment treaties and to ensure they do not constrain domestic policies to reduce inequality or protect the environment. F - Systemic issues WWF welcomes the approach to environmental challenges and the recognition that a stronger, more coherent and inclusive international architecture to improve global governance is needed ( 91). WWF also welcomes the commitment to ensure policy coherence and consistency across international agreements, rules and standards and the SDGs ( 98) as well as to strengthen the coherence and consistency of multilateral financial, investment, trade, and development policy ( 101). Further develop the proposal of coherence checks across the three dimensions of sustainable development and with input from multiple stakeholders ( 98). Page 5 of 6
Reaffirm the leadership role of the United Nations in the follow up mechanism for the Financing for Sustainable Development Conference ( 102). G - Technology, innovation and capacity building WWF welcomes the recognition of the role of new technologies and technological diffusion for climate-resilient and resource-efficient development as well as the need to address the digital divide ( 103). WWF further welcomes the commitment to increase support for PPPs on innovation and research focusing on the needs of developing countries, e.g. in the fields of low-carbon climate resilient technologies, climate-resilient agriculture and sustainable urban development ( 108). Enhance international cooperation for access to clean renewable and energyefficient technologies and promote public and private investment in energy infrastructure and clean energy technologies with due consideration of environmental and social safeguards. Upgrading technology for supplying affordable, safe, sustainable and reliable energy services for all, particularly in LDCs. H - Data, monitoring and follow-up WWF welcomes the recognition that greater transparency and improved statistical indicators of financial and technical cooperation by official providers are essential ( 116) and the call for the development of a metric of well-being beyond GDP which recognizes the multidimensional nature of poverty and social, economic, and environmental dimensions ( 119). WWF further welcomes the commitment to transparency and to full multistakeholder participation in monitoring progress in implementation ( 120) as well as to strong and crosssectoral review and follow up mechanisms ( 123). Commit to a strong mechanism for review and accountability at the national level: a national multi-stakeholder forum which includes the private sector, local authorities and civil society and will then feed into international reporting mechanism. Promote better implementation of the International Aid Transparency Initiative (IATI) by all development actors. The international follow-up conference to review and further advance the implementation of the Addis Ababa Accord should be held in 2020 ( 124). *** If you have any questions and/or for further information, please contact: Sally Nicholson at snicholson@wwf.eu, Head of Development Policy and Finance, WWF European Policy Office Tatiana Lambin at tlambin@wwf.eu, Development Policy and Finance Assistant, WWF European Policy Office Page 6 of 6