The Role of National Promotional Banks and Institutions (NBPIs) in the Implementation of UN Agenda 2030 in Europe

Salvatore Amico Roxas, Matteo Cuda, Marina Kisvarday, Filippo Munisteri and Francesco Scotti

No 220, European Economy - Discussion Papers from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: National Promotional Banks and Institutions (NPBIs) are state-owned or partially state-owned financial entities mandated to pursue specific socioeconomic objectives. Their role has been widely analysed in the literature, particularly in relation to sustainable development and addressing market failures. NPBIs contribute to long-term investments by financing socially desirable projects, often acting countercyclically and providing financial support where private investment is insufficient. They also operate under an “additionality” logic, ensuring that their funding complements rather than replaces private sector investment. Recent regulatory developments, such as the Non-Financial Reporting Directive (NFRD) and the Corporate Sustainability Reporting Directive (CSRD), have increased transparency regarding NPBIs’ impact on sustainability. However, research has not yet fully assessed their ability to implement proactive strategies aligned with the Sustainable Development Goals (SDGs). While studies have examined their contributions to carbon abatement and clean innovation, other key sustainability dimensions, such as water, sanitation, and biodiversity, remain underexplored. Additionally, existing literature often conflates NPBIs with broader public finance mechanisms, failing to distinguish their specific contributions. This paper addresses these gaps by analysing how NPBIs in Europe align their strategies with SDGs. It examines their impact across different sustainability dimensions and explores the correlation between NPBIs' actions and national progress on SDGs. The study also considers the evolving role of NPBIs in the EU policy landscape, particularly regarding the green transition and financial instruments such as InvestEU. Findings of this research show that NPBIs are highly committed to delivering sustainable goals and SDGs, but while historically counter-cyclical, in this analysis NPBIs prioritize long-term policy goals, such as green and digital transitions, which may reduce their flexibility in responding to short-term economic crises. This trade-off highlights the need for a strategic balance between long-term structural objectives and economic resilience, making these findings particularly relevant for policymakers, academia and strategists.

JEL-codes: G23 M14 O19 Q58 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2025-03
New Economics Papers: this item is included in nep-eec
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Persistent link: https://EconPapers.repec.org/RePEc:euf:dispap:220

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