Aligning policy frameworks to fund sustainable growth

Gianluca Riccio

Chair of the Finance Committee

Business at OECD

Close

Gianluca Riccio

Chair of the Finance Committee

Gianluca has over 20 years’ experience in the banking industry. His experience combines risk, strategy, business, regulatory and capital needs, and over time has ranged from managing risk in different regions and economic environments, to successfully leading a broad range of strategic transformation programmes, including modelling, pricing, capital and regulatory requirements, as well as business restructures and wider projects across the organization. Gianluca is Chair of the Business at OECD (BIAC) Finance Committee; and since 2015 he has been Member of B20 Finance & Infrastructure Taskforce as part of the G20 process. In addition, Gianluca is member of the Technical Committee for Financial Services to the ISO (International Organization for Standardisation). Gianluca works in the Risk division of Lloyds Banking Group, and is member of the Advisory Board of C2FO. By background he is graduated in Economics and holds a CFA and a MSc in Finance, and has various publications.

The world is at an inflection point: global economic growth is below average and uneven, with growth projected at 3.2% for 2024 and 3.4% in 2025. Public debt is high, and progress towards sustainability and net-zero targets is lagging with only 12% of UN SDGs targets on track. The sustainable investment gap has grown from US$2.5 trillion in 2015 to over US$4 trillion per year.

The existence of multiple, conflicting initiatives highlights the need for cohesive transition plans. G20 nations should adopt a systematic approach, leveraging technology to enhance productivity and competitiveness. Establishing a shared framework with clear milestones and principles will align policies and actions, while boosting resilience and sustainability in Global Value Chains (GVCs). Complementary policies are essential to prioritize inclusive economic growth, productivity, and stability. The private sector can play a crucial to accelerate the SDG agenda; a common framework, creating conducive environments for transformative investments is necessary to ensure equal access to transition finance.

In this context, the B20, Business at OECD (BIAC) and the International Organisation of Employers (IOE) have published a joint paper contributing business perspectives to the G20 Brazilian Presidency. This paper recommends to G20 Leaders to seek synergies, collaboration, and alignment across different areas to support financing for sustainable growth and stability.

"Joining the dots” across policy recommendations has been at the core of the joint work between the B20, Business at OECD and the IOE throughout the G20 Presidencies, culminating in annual publications led by Gianluca Riccio, Chair of the Finance Committee at Business at OECD and Co-Chair of the B20 Finance & Infrastructure taskforce. Each year, these papers aim to help pave the way for action by G20 leaders. Contributions for the publications come from diverse business and employers’ federations, SME associations, large corporations and financial institutions, each part of the respective Business at OECD, B20 and IOE policy networks.

This joint publication, leveraging on the “Sustainable Growth Propeller” framework initiated under the G20 in 2022, aims to show that in order to tackle asymmetries that hamper meeting net-zero targets, it is key to leverage on comprehensive frameworks, rather that act in silos on specific topics. This is important to guide policy-making, business strategies, and individual actions towards achieving a more sustainable and prosperous future. Financing needs have to be based on concrete mechanisms within interoperable implementation frameworks across jurisdictions which are easy to access for all firms.  This paper proposes simple, yet impactful, policy actions to achieve sustainability and inclusive economic growth without straining public finances. Comprehensive frameworks, rather than isolated actions, are essential for guiding policies, business strategies, and individual actions towards a sustainable and prosperous future. Financing, in order to be accessible to firms of all sizes, needs to be based on concrete mechanisms supported by supervisory entities to align their approach across jurisdictions with interoperable implementation frameworks.

The G20 should leverage on GVCs to support the funding needs and investments for the sustainable transition, as recommended in previous B20-Business at OECD-IOE papers. Greater emphasis should be placed on supporting realistic transition plans with concrete mechanisms over rigid legal frameworks, especially for SMEs. Practical solutions that enhance productivity and drive growth are crucial for a sustainable, net-zero economic trajectory. Sole reliance on subsidies is insufficient due to government financial constraints. The goal is to create ecosystems that stimulate private investment for low-emission development.

The B20 Brazil 2024 has embraced the theme of "Inclusive Growth for a Sustainable Future", focusing on creating a holistic and integrated approach to drive economic growth through sustainability. This paper complements the B20 Taskforces and Action Council recommendations on funding sustainability. It connects B20 policy actions, showing that a coordinated approach can accelerate progress towards sustainability and economic growth. It presents five use-cases with concrete actions that, individually or combined, can significantly accelerate the sustainable transition. For example, addressing working capital and liquidity needs is crucial, as financially insecure firms will not be able to invest in sustainable solutions, even with subsidies. Early payment platforms can boost productivity, unlocking over 1% of GDP and employment growth. Combining these efforts with other B20 policy actions and solutions can significantly accelerate the UN Sustainability agenda.