About investment and the SDGs
Investment – foreign or domestic – plays a crucial role in reaching Sustainable Development Goals (SDGs). It can contribute to job creation, the development of human capital and the efficient distribution of wealth, and improve standards of living. It can also enhance productivity in the host economy by supporting technology development and the transfer of knowledge and skills. Foreign direct investment (FDI), beyond the direct contribution to the capital stock, can also serve as a conduit for domestic enterprises to access international markets and linking them with multinational enterprises and global value chains.
Inclusive and sustainable benefits of FDI, however, are not a given. Strengthening positive FDI impacts on environment and social issues and, at the same time, taking into account environmental and social risks of investment may not always receive enough attention from some investors looking to minimise costs in the short term, and by some countries seeking to attract investment. While FDI in principal has the potential to advance sustainable development, rethinking private sector incentives and carefully selecting policies in host and home economies play an important role for enabling this potential.
The 2015 Addis Ababa Action Agenda calls on the private sector to adopt principles for responsible business and investment and engage as partners in the development process. It also calls on the private sector to invest in areas critical to sustainable development and shift to more sustainable consumption and production patterns. At the same time, it commits governments to developing policies and strengthening regulatory frameworks to better align private sector incentives with public goals, and to encourage the private sector to adopt sustainable practices and foster long-term investment.
The notion of ‘qualities of FDI’ has thus come to the spotlight of international policy discussions.
The OECD has long been engaged in helping to shape the policy environment to enhance the impact of private investment on society. This expertise is multi-dimensional, covering a wide spectrum of investment-related policies, legal instruments, advisory services, research, as well as policy dialogues and networks.
Roundtable on Investment and Sustainable Development
23 October 2019 Paris, France
This event will launch the outcome of the first phase of the FDI Qualities Project and participants will discuss the conditions needed to maximise the contribution of private investment to achieving the 2030 Agenda and climate change objectives.
About the FDI Qualities Project
Phase 1 - FDI Qualities Indicators
The FDI Qualities Indicators have been produced through a 18-month inclusive and interactive process, involving a multi-stakeholder policy network. Novel country-level indicators assess how FDI is associated with SDG-aligned development outcomes: job quality, skills, gender inclusion, productivity-innovation and environmental outcomes. The Indicators equip policy makers with actionable guidance grounded in national specificities that can help them to mobilise the FDI that contributes to sustainable growth and progress towards the SDGs. The results of phase 1 will be presented at the 2019 Roundtable.
Phase 2 - FDI Qualities Policy Toolkit
This phase will involve the development of a policy toolkit will allow policy makers to undertake in-depth national or regional assessments that reflect their own development priorities and identify concrete policies. This toolkit will complement policy assessments that are currently based on the Policy Framework for Investment and the Guidelines for Multinational Enterprises and is expected to be integrated in future OECD advisory work, such as the OECD Investment Policy Reviews. Phase 2 is scheduled for completion in 2021.
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Martin Wermelinger (email@example.com)