CEB event calls for more and better social investment to achieve sustainable recovery

Paris  – The COVID-19 crisis has revealed the fragility of our current economic model that has widened inequalities and fallen short of providing access to quality social services, particularly to the most vulnerable. At the Finance in Common Summit the Council of Europe Development Bank (CEB) called for more and better social investment as part of an integrated response to the Covid-19 crisis, the climate emergency, and rising social inequalities.

The Finance in Common Summit gathered for the first time more than 450 public development banks seeking to contribute to the recovery and align with sustainable finance principles. As one of the Summit’s grand partners the CEB organised a high-level event entitled ‘Social investment for people, planet, and prosperity.’

Noting that the chronic underinvestment in social infrastructure has weakened the resilience of our societies and undermined social cohesion, the speakers stressed the need for social investment to be a central tent of sustainable recovery efforts.

"Investing in health is preventing the potential of massive economic consequences. We still lack a coherent framework to address the market failures regarding health systems: we need regulation, communication, coordination and investments," said Dr Agnès  Soucat, Director of Director of Health Systems, Governance and Financing at the World Health Organization.

Lamia Kamal-Chaoui, Director of OECD’s Centre for Entrepreneurship, SMEs, Regions and Cities, highlighted the critical role that subnational governments play in social infrastructure investment, as well as the importance of collaboration to determine what projects should be built at regional and local levels to support an inclusive economic recovery.

“It’s by going local that we can design strategic investments and improving living conditions," she added.

This message was echoed by David Miller, Director of International Diplomacy and former Mayor of Toronto: "If we invest quickly in social infrastructure, there are significant benefits: jobs, saving lives, health cost savings and preventing the climate crisis. "

Rosa María Sánchez-Yebra Alonso, Vice-Governor Social Development Strategy zeroed in on the CEB’s experience in financing high-impact social infrastructure, particularly at the local level.  She pointed out that public development banks can play a key role in supporting integrated planning and investment that address multiple social, economic and environmental objectives and build resilience to a broad spectrum of risks and shocks, including by supporting local authorities. The CEB dedicates 80% of its portfolio to social infrastructure projects and 20% to supporting job creation and small businesses.  

“If properly designed and implemented, social infrastructure investments can simultaneously address social, environmental and economic objectives. In order to build back better after COVID19 and to deliver on Agenda 2030 we must promote social investment for people, planet and prosperity,” Vice-Governor said.

The CEB is the only development bank in Europe with an exclusively social mandate, combined with a reinforced commitment to environmental sustainability and the alignment with Paris Agreement. By signing the Finance in Common Summit’s joint declaration, the CEB signaled its willingness to join forces with other public development banks to address sustainable recovery solutions.