Can Money Change the World?

Plaza de España, Seville

The 4th International Conference on Financing for Development (FfD4) is scheduled to take place 30 June - 3 July 2025 in Seville, Spain. The conference will address new and emerging issues, and the urgent need to fully implement the Sustainable Development Goals, and support reform of the international financial architecture. FfD4 will assess the progress made in the implementation of the Monterrey Consensus, the Doha Declaration and the Addis Ababa Action agenda. Shifting finance towards sustainable development is not just an option—it is the path to closing gaps and building a resilient future. Uruguay shows that with vision, public policy, and financial innovation, it can be done.

By Alfonso Fernández de Castro
MONTEVIDEO, Uruguay, May 29 2025 (IPS)

While headlines often focus on crises, inequality, or instability, they rarely highlight one of the most powerful tools for transformation: development finance. Can money change the world? Yes—if mobilized with strategic vision, sustainability, and equity.

According to the United Nations Conference on Trade and Development (UNCTAD), the investment gap to achieve the Sustainable Development Goals (SDGs) by 2030 exceeds USD 4 trillion annually. Yet, global financial assets total USD 486 trillion, according to the Financial Stability Board.

What prevents even a small fraction of these funds from flowing toward sustainability? This gap represents not only a financial challenge but also an opportunity to rethink how the economic system works and reorient it towards more equitable and resilient growth.

Redirecting financial flows toward social and environmental priorities is more urgent than ever. Every dollar invested with an SDG focus can reduce poverty, boost innovation, and protect ecosystems.

The goal is clear: to build an effective, inclusive, and accountable financial system, capable of responding to major global challenges. To achieve this, many countries are implementing financing frameworks that align domestic and international resources with social and environmental goals.

These strategies mobilize investments that generate real impact in people’s lives and in planetary health: enabling energy transitions, reducing poverty, and fostering innovation in key sectors.

At the global level, maximizing the impact of Official Development Assistance (ODA) remains essential. In 2024, for every dollar spent on basic financing, the United Nations Development Programme (UNDP) helped mobilize over USD 500 in public and private investment for the SDGs. Since 2022, this has amounted to over USD 870 billion in climate-resilient financing.

The upcoming Financing for Development Conference (FfD4), in Seville, is a key opportunity to strengthen a global financial architecture that supports SDG-aligned investments, helps alleviate the debt burden on the most vulnerable countries, and promotes domestic resource mobilization through collaborative networks of governments, investors, and philanthropic organizations.

Efforts also focus on building sustainable investment ecosystems through SDG-aligned pipelines, de-risking mechanisms, financial innovation, and systems that steer investments toward sustainable activities with strong disclosure and impact-tracking frameworks.

Uruguay: Financial Innovation with Impact

In Uruguay, the push for a sustainable finance market aims to accelerate SDG progress and position the country as a regional hub. This agenda is coordinated through the Sustainable Finance Roundtable, an inter-institutional platform led by the Ministry of Economy and Finance (MEF) and the Central Bank of Uruguay (BCU), with the strong commitment and support of UNDP, along with banking and financial sector partners, to tackle the challenges of development finance.

A major milestone was the issuance of the Sovereign Sustainability Linked-Bond (SSLB) in 2022. Its Reference Framework was developed by five ministries with technical support from the Inter-American Development Bank (IDB) and UNDP. The bond linked financing costs to environmental targets, with external verification by UNDP.

Its first issuance, which drew USD 1.5 billion in demand, set a regional precedent for sustainable finance and marked a significant contribution to global public goods.

In 2024, Uruguay also launched its first Social Impact Bond (SIB) focused on dual education—an instrument that links financial returns to measurable outcomes in inclusion and employability. Developed with the participation of civil society organizations, public institutions, and investors, it aims to finance educational projects that promote youth workforce integration.

The Risk of Greenwashing: More Transparency, Fewer Empty Promises

The growth of sustainable finance brings certain risks. One of the most prominent is greenwashing—that is, projecting a false environmental or social commitment without verifiable action or outcomes. To prevent it, it is essential to manage impact objectively, with clear transparency standards and independent verification mechanisms.

Uruguay, with its strong financial framework and performance-linked bonds, exemplifies how a transparent, results-based approach can effectively counter greenwashing and ensure every invested dollar yields real impact.

Financing the future means measuring the real impact of every decision. Only then can the 2030 Agenda become reality.

Money has no intrinsic purpose; its impact depends on our choices. We can use it to fuel inequality—or as a driver to build a more just, resilient, and sustainable world.

IPS UN Bureau

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