Aligning public spending to the SDGs: are we getting there?

This post is written by Edward Cruickshank (Researcher, Fondazione Eni Enrico Mattei), Marco Onnis (Policy officer, Autonomous Region of Sardinia), and Sandro Sanna (Policy officer, Autonomous Region of Sardinia).

• The problem: Without data and metrics, local policy-makers struggle to align spending decisions to environmental, economic, and social policy priorities.

• Why it matters: Policy-makers must orient public spending towards programs with a greater impact on sustainability and towards spaces that need resources the most.

• The solution: An innovative measurement tool to assess the type, orientation and magnitude of the alignment of local spending to the SDGs.

In 2019, the European Court of Auditors made a striking observation: “despite the EU’s commitment to sustainability and the UN SDGs, the European Commission does not report on or monitor how the EU budget and policies contribute to sustainable development and achieving the SDGs”. Too often, budgeting decisions depend almost exclusively on their ability to meet economic growth objectives but, in recent years, local leaders put an increasing emphasis on other factors, especially on the social and environmental fall-outs of investment decisions.

Monitoring and evaluating the effectiveness of investment policies in terms of their sustainability has always been a major challenge. Although different approaches have been proposed to measure the sustainability of investments, they usually do so in a purely qualitative way. To overcome this, the Government of the Sardinia Region (Italy), in partnership with the Fondazione Eni Enrico Mattei (FEEM), developed an innovative tool to assess how local investment policies and programmes contribute to progress on the various SDGs targets. Drawing from the Strategic Environmental Assessment, a mandatory procedure under EU legislation, this methodology measures the expected effects of investments on environmental objectives defined at the regional level through a weighting system.

1. Connecting public spending to positive and negative impacts on sustainable development

We looked for a holistic approach that takes into account the three pillars of sustainability – ie. environmental protection, economic growth and social justice – no longer as isolated objectives but as integrated and part of the same solution for resilient and inclusive societies. The natural framework to do this was the 2030 Agenda and its Sustainable Development Goals.

In our SDGs tool, each investment is evaluated in terms of its contribution to the 169 SDG targets. The contribution could be classified as none, indirect or direct. For example, investments in solar energy would contribute directly to Target 7.2 “Increase substantially the share of renewable energy in the global energy mix by 2030”, whereas R&D investments would only give an indirect contribution. On the other hand, investments to protect natural sites would give no contribution on that same target (Figure 1). The contribution to the target could also have either a positive orientation – when it contributes to the attainment of a target – or a negative one – when it hampers progress – and could have a different weight (very low, low, medium and high).

We believe it is exceptionally important to be rigorous and objective about measuring both the positive and negative contributions of the investments as well as their weight, as that is the only way we can truly capture both the trade-offs implicit in the SDGs and the local, context-specific characteristics of the investments made.

This information can be used not only in the planning phase of investments but also, further downstream, in the ex post evaluation phase when the expenditure has already been made for monitoring of the progress made. In other words, we structured the tool in such a way that it would allow us to consider the individual contribution of each investment to individual targets.

Figure 1: Example of the first 169 x n matrix, showing the impact (none, indirect or direct) of each intervention or investment on the 169 SDG targets

2. Challenges and lessons for replicating the tool in other regions

Although it has been developed to specifically measure the investments of the European Cohesion Policy and tailored to the Sardinian context, the universal character of the SDGs means that the founding logic of the tool can be applied in other contexts, at both the national and sub-national levels.

A sustainability tracking tool for investments not only guarantees a representative qualitative assessment of how spending is directed towards the SDGs, but also helps communicate to civil society the sectors in which new investments will bring benefits in terms of sustainable, inclusive and fair growth.

For us, this tool illuminates how aligned the EU investment funds were with the SDGs and which goals were most targeted. It shows that, in Sardinia, around 65 to 70% of the EU investment programmes went towards SDG related outcomes, with the largest contributions to Goal 9 (infrastructure), 13 (climate), 1 (poverty) and 8 (decent work and economic growth).

Replicating it requires gathering the right combination of expertise. This was at the core of our collaboration between FEEM’s researchers – who have a deep knowledge of sustainability issues, of data analysis techniques, and the SDGs – and the technical staff of the Sardinia Region who are trained on environmental assessment and have a more rooted knowledge of the local context. Each side – with their specific expertise – contributed to identifying the type (e.g. null, indirect or direct), orientation (e.g. positive or negative) and magnitude (e.g. null, very low, low, medium or high) of the contribution to be attributed to each pair of investment/target of the 2030 Agenda.

Ultimately, success will depend upon the availability of accurate, efficient, effective and timely collection of data to monitor progress made on the SDGs at the activity level, which can imply the achievement of qualitative and quantitative targets. Given its sophistication, it is desirable that in the future political leaders will make full use of it to better address their priorities and enable their choices.

Nevertheless, the work carried out by the Sardinia Region together with FEEM represents an instance of sui generis best practice with research and local government collaborating to find solutions to the increasingly urgent requests for sustainable development. In 2019, the European Commission invited officials from the Sardinia Region to present this methodology for the Environmental Strategic Assessment at the European Week of Regions and Cities conference in Brussels.

Curated by the Brookings Institution and edited in collaboration with Apolitical, this brief is part of the SDG Leadership Cities project, a Brookings-led community of practice of vanguard cities promoting a global movement of city leadership on sustainable development.

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