"We cannot waste a single minute". So said António Guterres, Secretary-General of the United Nations. It was 2015 when the international community committed to delivering an ambitious plan of action for the planet, people and prosperity: the 2030 Agenda. Ten years before the deadline, a pandemic broke out that made the journey even more tortuous and fraught. Dangerous steps backwards were taken on many fronts: millions of people were plunged into hunger and poverty, women were penalised in the world of work, and economic growth ground to a halt. But that is certainly no reason to give up, Guterres emphasises. Achieving the 17 Sustainable Development Goals (SDGs) requires teamwork built on political will, research, technology and also capital, both public and private. But what exactly are the investments needed? We asked Francesco Timpano, professor of Economic Policy at the Piacenza campus of the Università Cattolica and coordinator of the cross-cutting working group "Finance for Sustainable Development" at Asvis, the Italian Alliance for Sustainable Development.

How much do the Sustainable Development Goals cost?
That's a great question, because it needs to be broken down at a global level and across individual territorial areas. Frankly, I'd rather not give a specific figure. Some estimates for the European Union speak of €520 billion in annual investments between now and 2030, almost 4 per cent of European GDP. Eurosif estimates that reaching carbon neutrality will require €38 trillion in total investment between now and 2050. These are figures that deserve careful consideration. What is certain is that enormous resources are needed, and equally certain — as was seen at COP26 in Glasgow — is that public and private resources must coexist.

What, then, is the role of public and private investment?
The European Union is asserting important leadership with regard to investments aligned with environmental, social and governance (ESG) criteria. Despite generating only 8 per cent of greenhouse gases globally, it issues 42 per cent of green bonds, compared with 23 per cent for North America. A market — that of green bonds — that is now worth €900 billion. In short, Europe makes a formidable contribution and sets a standard for the rest of the world too; people talk precisely of a "Brussels effect".

Alongside private resources, public resources are needed, and these are no small matter. As Prime Minister Mario Draghi said in Glasgow, not all risks can be borne by the private sector. It is a fact that 40 per cent of Next Generation EU resources are earmarked for the ecological transition.

From a financial standpoint, there is also the risk that this becomes a bubble. To prevent that, regulation must compel financial operators to be highly transparent about their investments. I have to say that progress has been made and continues to be made. The risk of greenwashing and social washing is always just around the corner, but the substance is there.

How significant will European regulation be?
It plays a very important role, because for markets to function they must be adequately regulated. This push is undoubtedly driven by the action plan on sustainable finance, the new sustainable finance strategy of July 2021, and the taxonomy. The latter has a complicated and rocky path ahead, because it must define which activities are sustainable and which need a transition period — including a technological one — to become so. These activities, predominantly industrial, offer enormous scope for investment.

Alignment with the taxonomy will be a very important step, because it links the financial world to the real economy. We have embarked on a major industrial reconversion, for which private capital will be needed. Regulation matters, and so does transparency. The transition will certainly entail costs and will give rise to crises that will need to be managed; that will be the other great challenge.

Will small and medium-sized enterprises also be involved in this transition?
Within a relatively short timeframe, we are approaching another milestone: the creditworthiness of small and medium-sized enterprises will need to be linked to a sustainability rating. In other words, when a small business goes to its bank to apply for a loan, it will also have to demonstrate its commitment to sustainability. Once this piece is in place, the path will essentially be complete.