Financial Framework: With World Participation on Global Challenges

Toronto, Canada, June 17 - Urban + Future (U+F) organized a virtual debate session to discuss the means in which financial resources can be provided to cities and countries to accelerate the realization of SDGs through the guidance of sustainable models.

In the process of realizing Sustainable Development Goals (SDGs), one of the fundamental aspects of it is the challenge that cities and countries around the world face pertaining to the availability, creation and management of resources. Much of the confusion revolves around the means of implementation and how to effectively engage different stakeholders in the process of sustainable and inclusive urban transformation.

The session was moderated by Alex Venuto, Urban Economy Forum (UEF) and had the participation of Urban + Future’s Senior Advisory Board:

Jose Etcheverry, York University Co-Chair, Sustainable Energy Initiative (SEI) Director

Eleanor Mohammed, Principal at Strategic & Resilient Together President, Commonwealth Association of Planners

Camilla Ween, Loeb Fellowship at Harvard University & Director at Goldstein Ween Architects Anantha Krishnan, Secretary General of UEF

Amongst the speakers were:

Reza Pourvaziry, Chair of UEF
Rebecca Alty, Mayor of City of Yellowknife, Canada
Fazileh Dadvar, Professor of Geography, Women Study,Secretariat of Academic Platform, UEF
Massoud Ghandchi, President and Founder of Ghandchi Organization
Kunal Kirpalani, Founder & Principal at Thoth Impact Advisory
Jason Gangaram, Campus Director at CDI College
John Palmer, Professor, the department of Economics, Western University
Delia Reiche, Development Liaison, County of Brant, Past President of Economic Developers of Ontario & Member of UEF

At the debate, the following key questions were posed to the audience:

Cities around the world need financial resources to realize Sustainable Development Goals. What is your broad idea or perspective as to from which areas or sources such resources could come from?

What is your idea as to how people in the world could have a real participation in the realization of Sustainable Development Goals?

Key highlights from the debate

Reza Pourvaziry opened the conversation by stating that “in the process of realizing Sustainable Development Goals (SDGs), we need to be thinking about financial resources and urban economy.” Indeed, the realization of SDGs require innovative and creative solutions but another important factor is financing of the programs and initiatives that we present to the cities and countries around the world. The purpose of this debate is to have in depth discussions about the financial challenges that our cities and towns are facing today in realizing the SDGs and dig deep into the solutions that address the root of the problem.

Jose Etcheverry was the first speaker to continue the conversation after the opening remarks. He approached the subject from the perspective of an educational institution, namely, York University where he works as a professor and co-chairs the Sustainable Energy Initiative (SEI).

Jose stated that at York University, “we had a strategy where we brought the United Nations Sustainable Development Goals at the forefront of university activity and decision making by making it part of our academic plan”. This was meant to bring the SDGs at the core of the university permeating through various fields and disciplines.

There were some financial lessons and budgetary implications that Jose talked about as well. “What we have found is that assuming that people know what the SDGs are, it is an error. Most people do not know at all what you are talking about when you say “SDGs”. He emphasized that the SDGs need to be part of the core of decision making bodies and there needs to be a conscious process that everyone is involved in the decision making, for example in the development of budgets.

The next speaker, Kunal Kirpalani stated that when we look at financial frameworks, one of the potential areas “is looking at innovative financial instruments that are for profit but at the same can provide social and environmental impact, to address the urban issues, particularly, gentrification, affordable housing, eco friendly housing, addressing crime rate and other issues”. One of the instruments that we could be looking at is social impact bonds or green bonds or a hybrid of both. He concluded that there is great potential in harnessing the private sector to invest in these social and environmental causes through such financial mechanisms.

Camilla Ween participated in the discussions by touching upon the matter of the conflict between distribution of national funds and regional communities. She stated that “one of the problems with smaller cities and communities in regional governments is that they know that they have projects but do not really know how to put them together without the help of a central government”. The solution posed by Camilla was to have a program that assists and provides funding to smaller regional entities to develop their project plans; they would be provided with project management help and assistance so that they can come together with a proper business plan and be able to bypass central government funding and work with global financial institutions.

Jason Gangaram recommended leveraging the corporate or private world as they “have free money that they want for PR, so we can leverage that from a capital perspective. From a holistic and social perspective, social media influencers can provide awareness and education [on the SDGs]”.

Massoud Ghandchi agreed with the previous speakers that it is a very good idea to have the private sector be involved to get things moving. He emphasized on the potential benefits of creating “a platform that would allow smaller investors and players to join in and help the cause such as crowdfunding that can help and open the door for everybody to be involved. He concluded that “instead of only focusing on institutional and government money, we can encourage people to help people”.

Mayor Rebecca Alty, from the perspective of City of Yellowknife, gave an excellent comparison on the private sector’s response to COVID-19 in the city, particularly how they have helped the city in terms of the logistics of the vaccines, with how the private sector has been responding to climate change and SDGs in general. The key words she used were “what is in it for me?” response that is being observed from the private sector relating to these issues.

Mayor Rebecca raised an interesting point about the accountability part of the funds provided to the cities, namely how this impacts upon how much can be accomplished versus what the investors demand. There is also the challenge pertaining to what the federal government is trying to achieve with the funds provided and what the needs of the cities are. Projects proposed to the federal government, if they do not meet the directives then they can easily be rejected. She concluded that “there is always a disconnect between the policies happening in Ottawa versus what is happening on the ground and any opportunities to make improvements; how we would be able to meet and realize our SDGs”.

The next speaker, John Palmer, who is an expert in the field of economics, talked about the importance that prices play. He stated that people respond to incentives, “economics says that people respond to incentives. It is how people can change their behavior as a response to those incentives.”

“When we look for programs, people are going to incentives, not just what your goals are. If you have a strategic plan for sustainability, if there is to be a plan, it has to induce people to those incentives. Prices work. If prices work, then there is, contra José and Rebecca, absolutely no need to regulate the type of energy a household chooses. As we begin to run low on some sorts of energy, its price will rise and people will adjust. Not instantly, but eventually. And if the use of some types of energies create negative externalities (econ-speak for costs imposed on others), e.g. non-recyclable wind turbine vanes or lithium battery disposal problems or global warming, then taxes on the use of these things will work because "people respond to incentives." E.g., the carbon tax in Canada is an excellent example.”

Fazileh Davdar provided the following perspective, “city leaders can overcome the global investment gap if they get creative and define their urban challenges. As Camilla and Jose described, I believe that universities can be focused in terms of creativity and innovation to involve researchers, professors and students. As Jason described, the private sector is also an important pillar that we need to look at and they need to be connected to the universities”. She concluded that we need to work together to build a bridge to fill this gap.

In thinking about SDGs and financing, Eleanor Mohammed stressed that it is a very complicated matter as “SDGs are so high level; even if we take the finance piece out of it and talk about indicators of success”. What is even more complicated is to apply the SDGs on the ground.

“When I look at Canada, it is easier to measure them as several level because they are higher level SDGs, so you can set your indicators higher, but once you start from the provincial and down to the municipal level, the context drastically changes and the indicators multiply to a point where it almost feels beyond the capacities of the municipalities”.

Whenever finance is attached to the success of the said programs, they want to see indicators and what has changed or whether their investments have been successful. Eleanor emphasized that this applies to taxpayers as well as the taxpayers want to see the value being applied on the ground. She recommended that “if you are setting up models depending on municipalities, you need to really zero on one SDG or aspect and come up with indicators that can be shared across municipalities that are relevant to each other”.

Anantha Krishnan, in regards to SDGs, said that we need to be clear about what we want to do; “are we talking about financing sustainable development or are we talking about taking stock of how SDGs are being achieved with the existing finance?”. If it is about financial system development, there are a number of mechanisms set in motion by the UN called the Financing for Development process. “They talk about domestic and public resources, domestic and international business finance, international development cooperation, trade, debt and sustainability, systematic issues, capacity building and technology”. So, financing for development is already an existing mechanism for the UN and they have a task force accompanied by a highly technical forum. Krishnan proposed that to support the cities and municipalities around the world, we may think about the creation of a global fund for SDGs that reflect the needs of the people.

Delia Reiche joined in the conversation and supported much of what Camilla, Jose, and Fazileh have touched upon, namely, the matter of education. She stated that “if we start with education at the ground up from the municipal level, this can happen in many ways, with the planning departments, I believe that we need to bring this knowledge and information so that they can incorporate these their official plans” with long term projections. In the economic development world, measurement is everything due to tight funding and pressure by the investors to get results. In regards to strategic planning, she argued that it is important to have all of the municipal plans, not just the planning department, as it crosses so many other departments as well. She concluded that, we need to look at some major organizations and the work that they are doing as a reference and ask the questions “has anyone done these and what were the impacts? How did they improve the lives of the citizens?”

Urban + Future thanks all of the speakers and participants, it is important that we take this conversation forward in our future sessions. We believe that through creative and innovative approaches, we can build sustainable financial frameworks and help generate the resources that our cities and municipalities need to accelerate the realization of SDGs. As it has been discussed, the importance of creating awareness and investing in education are important factors that will help the public to understand why it is necessary for municipalities and private corporations to embrace sustainable practices and SDGs. Furthermore, this debate has demonstrated that a sustainable development plan has to have incentives for both the public and private sectors to make progress on realizing the SDGs. The idea of incorporating SDGs at the core of decision making, whether it is in universities, municipalities or private corporations, can play a factor as to how decision makers will formulate their policies and programs that address some of the major issues that humanity is facing today whether it is climate change or affordable housing.