Bridging the Gaps for Sustainable Development

Executive Summary

Countries are falling short on achieving the Sustainable Development Goals (SDGs) ahead of the 2030 target date. New policy solutions and boosting investment can help, but another lever is crucial for success: reducing governance fragmentation. With SDGs 6, 7, 9, 11 and 17 up for review in 2026, this report provides an analysis of the current state of policy coherence in water, energy, industry and urban development policies, and sets out a framework to improve coherence, co-ordination and resilience.

A call for coherence

This OECD analysis, relying on concrete country experiences around the world, shows that fragmented governance is a central cause of the slow and uneven progress on the SDGs under review. Water security remains threatened by declining freshwater ecosystems and climate driven variability, as well as rising demand from agriculture, industry and cities. While energy access continues to improve globally and renewables’ costs decline, structural financing gaps remain significant barriers to the transition. Industrial emissions keep rising, and cities face persistent environmental, infrastructure and governance challenges, including poor air quality, congestion, inefficient and unsustainable land use and growing exposure to climate risks. These challenges are interconnected, yet policies to address them often evolve in isolation.

Fragmented action creates three fundamental, multiplier effects that amplify pressures across systems. First, it reduces the effectiveness of reforms when gains in one system generate pressures elsewhere. Second, it raises costs when closely linked decisions such as those on infrastructure, spatial planning, regulation and investment sequencing are not aligned. Third, it weakens fairness, since poorly co-ordinated policies tend to amplify burdens on low-income households and small firms.

Aligning policies and governance to accelerate progress

Still, significant opportunities exist to accelerate progress on the SDGs under review when countries adopt integrated approaches. These opportunities include circular economy policies that integrate urban waste and water management with industrial innovation and energy efficiency. They also include nature-based solutions that can reduce flood and drought risk, expand green space, support biodiversity and reduce cooling needs in cities. Integrated water and energy planning can reduce long term costs and help secure water intensive energy systems. Aligning land use, housing and mobility can reduce emissions and improve access to services.

Integrated urban policy is essential to achieving the SDGs, as it enables cities to address complex, interlinked challenges through co-ordinated actions. Cities are making progress on many SDGs, but performance remains uneven across goals. Between 2017 and 2022, cities improved on average in 8 of the 13 goals with available data. By aligning plans and interventions across various key sectors of urban development, such as housing, transport, energy, and digital infrastructure, as well as across levels of government, integrated urban policy can help maximise synergies and reduce policy fragmentation.

Integrated strategies have been identified that reinforce the goals under review when they are scaled beyond pilots, even if they remain limited because enabling frameworks are often missing. These include standards, funding mechanisms, data systems and co-ordination processes that align sectoral decisions. Long term planning frameworks help align action on SDG 6, SDG 7, SDG 9 and SDG 11 with national visions for sustainability. At the same time, trade‑offs are common and need to be made visible and managed. Energy expansion can increase water stress, urban renewal can raise affordability concerns, and industrial transitions can create cost pressures for firms. Addressing these tensions requires coherent approaches that align planning, budgeting, regulation, procurement and evaluation so that policies support the same objectives and reinforce one another. This, in turn, requires sustained investment in data, skills and institutional capacity at all levels of government.

A policy coherence agenda for transformative action

This report also provides a forward-looking agenda that reflects emerging challenges and the growing urgency to accelerate action. It identifies five priority areas where governments can strengthen policy coherence: from integrating it into everyday decision making to empowering Centres of Government to resolve trade-offs to designing investment and innovation strategies to deliver results across multiple SDGs.

The analysis presented in this report confirms that coherence is crucial in determining the effectiveness and resilience of public policy across water, energy, industry and cities. Coherent approaches help governments align investments with long term national objectives, manage trade-offs in ways that are fair and transparent, reduce exposure to environmental and economic risks and ensure that reforms deliver benefits across multiple goals at the same time. Countries that strengthen coherence are better placed to accelerate progress on the SDGs and to navigate the complex transitions that extend beyond 2030.