Financing the future: Closing the SDG gap in emerging markets
- By Manish Pant
- 10 Oct 2025
- 3 min
The UN Sustainable Development Goals (SDGs) is not a race with a few select winners, but a global team sport where every region needs to deliver. Yet many developing countries are struggling to raise funds for sustainable development at scale.
With the 2030 deadline rising, swift and potent solutions are needed for an equitable energy transition — one that delivers both economic growth and social benefit.
- $3.3 – 4.5Tannually needed by developing countries to meet SDG targets
- $6.4Tshortfall warned by OECD
- $1.3Tof growth in climate finance annually
UNCTAD estimates developing countries need $3.3–4.5 trillion annually to meet SDG targets. Current spending falls far short. The OECD warns of a $6.4 trillion shortfall by 2030 — compounded by fragmented ESG metrics, weak infrastructure, and political instability.
Here, the OECD calls for sweeping reforms: to align global finance with SDGs, scale blended and private capital, strengthen domestic revenue systems, and improve monitoring and accountability.
There are early signs of progress. South Korea’s Social Progress Credit raised $52 million for social enterprises. The Common Good Marketplace secured $2.1 million in 2024. And Zlto, a South African digital rewards platform, lets over 500,000 young people earn digital currency for community work, training, and micro-tasks.
The priorities for COP30 are clear. We must accelerate a just and inclusive energy transition; scale climate finance to $1.3 trillion annually by 2035; deliver resilience, education, and skills for vulnerable communities; and translate commitments into local action.
Some countries are steaming ahead. Brazil’s renewed climate leadership — marked by a $4 billion funding initiative with TPG and Brookfield — reflects a sharp turn from previous years. COP30 will test whether others follow.
“COP30 will be crucial in redefining the future of the planet,” said Brazil’s Environment Minister Marina Silva. Ten years after the Paris Agreement, the world needs a new benchmark— one that matches the scale of the crisis.
The event will gather stakeholders across sectors — governments, banks, businesses, and civil society — through forums like the Sustainable Innovation Forum, Agri-Food Systems Summit, and Hydrogen Transition Summit. These are designed to spark collaboration and drive implementation.
But public funds alone won’t close the SDG gap. Private capital must step in, with the right structures, incentives, and safeguards. The private sector and development institutions are already joining hands to close the SDG gap — especially in energy access and the clean energy transition.
Impact investing combines capital, expertise, and innovation to address development challenges. Between 2020 and 2024, private finance for nature grew from $9.4 billion to $102 billion. At this pace, it could reach $1.45 trillion by 2030.
And funds like the European Impact Fund support projects tackling food waste, infrastructure, and mental health through tiered financial products and technical assistance.
Beyond funding, impact investing de-risks capital flows. By absorbing risk — often at growth stages — and providing technical assistance, it creates conditions where commercial investors can enter with greater confidence. This is especially important in emerging markets, where infrastructure gaps and slippery regulations often deter mainstream capital.
It also drives catalytic signaling. When reputable impact investors back a venture, it sends a clear market cue: the project is credible, mission-aligned, and investment-worthy. This validation often unlocks follow-on funding, accelerates scaling, and attracts institutional capital that might otherwise stay on the sidelines.
Schneider Electric has been a pioneer in impact investing since 2009. Our approach combines capital with business support, technical assistance, commercial partnership and capacity building. We only invest with reputable partners and take a minority position, ensuring accountability and long-term viability.
In doing so, we create sustainability in both the ecological sense, and by helping ventures to literally sustain themselves.
Our portfolio companies show how impact investing delivers scalable, locally tailored solutions — tackling energy poverty, cutting emissions, and driving inclusive growth. This is in direct alignment with the OECD’s reform agenda.
Okra Solar
Okra Solar’s mesh-grid tech electrifies off-grid communities.
Oorja
Oorja’s solar mini-grids power irrigation, boosting yields and cutting diesel use.
ATEC
ATEC’s biodigesters turn waste into clean cooking gas, improving health and reducing deforestation.
Goparity
Goparity connects small energy projects to ethical investors, accelerating grassroots climate solutions.
Private capital is essential to scaling solutions in climate, energy, and education. Importantly, this includes passionately supporting early-stage ventures that lay the groundwork for long-term impact.
As 2030 looms, governments, investors, and businesses must align around locally rooted, inclusive solutions. That means channeling capital efficiently, improving transparency, and embedding impact into investment strategies.
The SDG financing gap won’t close on its own. But with disciplined, mission-aligned finance, it can be narrowed — and a just, sustainable future brought one mile closer. Game on.
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