Sustainability in the European priorities: cohesion policy and business

Contemporary global challenges greatly affect all EU-wide development, in particular the European regional and cohesion policies: both are having solid sustainability’s implications and therefore are presently heavily supported from the European financial sources and funds. Progress in reaching SDGs in the EU and OECD countries is reflected below. 

The EU’s multi-annual budget allocates about € 392 billion for the European cohesion policy for the next five years; it represents huge investment and support for national and regional programs, including both sustainability programs and actions aimed at increasing growth, jobs, social integration and better regional cooperation. These EU budget allocations fall under three main categories of programs and funding in both the executive EU functions and the member states investments:
= 1) Investment for jobs and growth (with €381 bn), which includes: the European Regional Development Fund (ERDF), the European Social Fund+ (ESF+); the Cohesion Fund, and the Just Transition Fund (with about €19.2 bn).
= 2) Interreg: assistance to the European-wide territorial cooperation among the member states.
= 3) the EU financial instruments and supporting programs of the European Commission in managing and providing necessary technical assistance to the states. (1)

Contributing to implementing SDGs
The EU’s commitment to the UN’s 2030 Agenda for Sustainable Development and 17 SDGs is reflected presently in the Commission political priorities. The European Cohesion Policy directly supports 11 SDGs, with some categories of funding contributing to more than one: about 94 % of funding contributes to 11 SGDs, with most allocations on SDG 9 and SDG 8 (totaling over half of the EU cohesion funds).
Present EU priorities and facilities in some of the most vital SDGs implementation for the Union’s member states are the following:
= SDG 1: end poverty in all its forms everywhere. About 6 percent of EU cohesion policy allocations support SDG 1 by funding projects that aim to create more inclusive societies and reduce discrimination. With about 55 % of total SDG 1 financing, the most popular area for funding is “active inclusion”, the area which includes projects promoting equal opportunities, active participation, and improving employability.
= SDG 3: ensure healthy lives and promote well-being for all at all ages. Another 6 percent of EU cohesion policy allocations are aimed at contributing to healthier societies through optimal health infrastructure and services. The two largest contributions are directed to Spain and Poland with over € 4.5 billion in allocations.
= SDG 4: quality education. EU cohesion policy supports this goal’s implementation with 9 percent of the budget: Italy, Portugal, Poland and Spain being the largest “destinations”. The EU states have to investing funding, primarily, to reduce and prevent early school-leaving, and promoting equal access to good quality early-childhood, as well as to primary and secondary education.
= SDG 6: clean water and sanitation. About 4 percent of allocations contribute to investing in wastewater treatment and water management: it includes support for district and consumer water supply, leak reduction and modernising infrastructure for water extraction, treatment, storage and distribution of water for human consumption.
= SDG 7: affordable and clean energy. With 7 percent of budget allocations, it adds about € 27 billion, reflecting the importance of this goal for territorial cohesion; investments cover 16 different intervention fields, stretching from renovation of buildings and public infrastructure to renewable energy, clean transport, etc.
= SDG 8: decent work and economic growth. About 27 percent of funding contributes to this goal by investing in SMEs’ competitiveness and networking, entrepreneurship, access to employment and youth integration in the national and European-wide labour markets.
= SDG 9: industry, innovation and infrastructure: cohesion policy addresses diverse developmental needs of Europe’s regions, leading to about another 27 percent of budget allocation in cohesion. Allocations for both SDG8 and SDG9 totals over half of the EU cohesion support for the member states in sustainability.
= SDG 11: sustainable cities and communities. Only one percent of EU funding contributes to SDG 11 by investing, e.g. in improving air quality and building bicycle tracks and footpaths.
= SDG 12: ensure sustainable consumption and production patterns. About 2 percent of funding contributes to SDG 12 by investing predominantly in household waste management and in environmentally friendly production processes in SMEs.
= SDG 13: climate action. Three EU cohesion policy’s funding instruments are linked to this goal: e.g. first, using a specific “metrics”, with which Commission tracks a wide range of climate actions under the EU climate tracking mechanism. To get funding, the EU states have to support climate change objectives (national budget’s input of at least 37%), which are going to be included into “investment actions” under each of the cohesion policy funds. This method consists of assigning a specific “climate coefficient” to the financial support reflecting contribution to climate change mitigation and adaptation goals in all approved projects. There are also some “weighted” components assigned to investments in ERDF’s projects: e.g. 100% support for projects with a significant climate-change contribution (i.e. in sustainable energy, climate-related risk prevention and climate-related regional actions, etc.), and 40% – in cases of a moderate contribution, such as clean urban transport, rail, intermodal and other public transport means. (2)
= SDG 15: life on land. Cohesion policy contributes to this goal’s implementation by investing in the protection of nature and biodiversity, in green infrastructure and in the development of the tourism potential in natural habitat; however, biodiversity’s goal funding was not explicitly fixed in the EU cohesion policy. (3)

Regional and cohesion directions: water policy example
EU’s cohesion policy contributes to the availability and security of drinking water, through water-purification plants and distribution networks, especially in areas where the population has no access to adequate water provision. The Cohesion Fund is a primary EU source of investment in water infrastructure to match the member states’ specific problems: the fund is helping the states to meet the citizens’ basic water needs while supporting compliance with the EU’s environmental legislation in water quality.
Thus, the ERDF invests in developing national infrastructures to provide citizens with basic water services; furthermore, it can support the development of regional water resources’ potential through small-scale infrastructures.
European water policy in general aims at protecting water resources and ensures the safety and availability of drinking water. All aspects of European water policy are specified in the Water Framework Directive, which is contributing to achieving and maintaining good water quality across the EU-27.
Cohesion policy’s water investments focus, in particular, on those countries that have adopted national clean-water strategies: e.g. the greatest support is dedicated to wastewater collection and treatment infrastructure in those member states which still need to comply with the EU objectives. This includes the construction or upgrading of wastewater treatment plans and sewerage networks, as well as sewage-sludge management efforts. (4)
High-quality drinking water and access to sanitation are essential for the Europeans’ daily life and economic activities: due to the EU policy and funding, most citizens in EU enjoy good access to water services. However, there is still room for improvement which is why the cohesion policy continues to invest in this area, allocating about €15 billion to water management during the decade of 2014-23. (5)

International “progress” in achieving SDGs
Recent OECD report underlines that the 37 member states’ organisation, however “advances slowly on SDGs” and is “close to meeting only a quarter of the goals”: e.g. the report finds that while most OECD countries are close to eradicating severe hunger, few of them were able to fully prevent social exclusion or reduce malnutrition by 2030. On average, around one in eight OECD residents are “considering their income poor”, with unhealthy diets and sedentary lifestyles lading to rising obesity rates in all OECD countries, with about 60% of adults being overweight or obese.
The report also confirms that environmental pressures are rising: thus, progress was made only in such SDG-sectors as energy intensity, water use and municipal waste management attributable to policy action and technical progress; however, the displacement of resource- and pollution-intensive production abroad also explains some of this progress. The use of material resources to support economic growth remains high, and many valuable materials continue to be disposed of as waste.
As to climate issues, despite progress in decoupling greenhouse gas emissions from population and GDP growth, total emissions are decreasing slowly: all OECD countries are continuing to support the production and consumption of fossil fuels.
In biodiversity, despite some encouraging developments in protecting ecosystems, threats to terrestrial and marine biodiversity have been rising: hence, without more determined action, biodiversity loss will continue, with problems in sanitation, fresh water and energy to follow. (6)

References
1. More in the EU Regional Policy Panorama in: https://ec.europa.eu/regional_policy/en/newsroom/panorama/2021/12/12-01-2021-cohesion-policy-2021-2027-budget-in-brief
2. More on the mechanism in: https://cohesiondata.ec.europa.eu/stories/s/Tracking-climate-related-investments/a8jn-38y8
3. Reference to “Panorama” in: https://ec.europa.eu/regional_policy/en/newsroom/panorama/2022/04/04-06-2022-cohesion-policy-2014-2020-supports-the-un-s-sustainable-development-goals
4. Reference to: https://ec.europa.eu/regional_policy/en/newsroom/panorama/2021/03/26-03-2021-tapping-into-cohesion-policy-investment-in-water-services
5. More in: https://ec.europa.eu/regional_policy/en/newsroom/panorama/analysis-and-data
6. See: https://www.oecd.org/wise/the-short-and-winding-road-to-2030-af4b630d-en.htm; more in the OECD recent publication “The OECD at 60”, in: https://read.oecd-ilibrary.org/view/?ref=1059_1059103-whi5k2wv7w&title=OECD-at-60.

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