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The European Green Deal, EU Recovery and the SDGs

Part 2

The European Union (EU), its institutions and member states played a key role in the adoption of the 2030 Agenda, the SDGs and the Paris Climate Agreement. From the outset, the EU and member states were leading the call for an integrated, universal agenda that would continue the focus of the eight Millennium Development Goals (MDGs) on extreme poverty in all its forms and add critical issues of environmental sustainability, social inclusion, economic development, and governance challenges (European Commission, 2015). Article 11 of the Treaty on the Functioning of the European Union (European Union, 2007) stipulates that 'Environmental protection requirements must be integrated into the definition and implementation of the Union's policies and activities, in particular with a view to promoting sustainable development' (European Union, 2007). One might therefore consider the SDGs as a 'European Agenda' that the whole world has signed onto. The SDGs represent European values, which might explain the strong performance of the EU and individual member states on the SDG Index.

The President of the European Commission, Ursula von der Leyen, showed remarkable commitment to the SDGs when taking office in 2019. Von der Leyen's Political Guidelines (2019) calls on the Commission to fully integrate the SDGs into the European Semester, the lead mechanism for macroeconomic coordination in the EU. The Commission has since published a Reflection Paper (2019) and Staff Working Document (European Commission, 2020c) on the goals. In 2019, Europe became the first continent to commit to achieving climate neutrality by mid-century, via the European Green Deal.

Eurostat monitors annual progress on the goals, with their achievement being a fundamental driver of the work of other technical agencies and centres of the Commission, including the Joint Research Centre. The Council of the European Union and the Parliament have also demonstrated their commitment to the SDGs. But the EU has not yet published a document highlighting how it plans to achieve the goals - with clear targets, milestones and roadmaps.

And while the Green Deal covers the climate and biodiversity dimensions of the SDGs well, it focuses less on social dimensions. In its annual SDG report, Eurostat has identified targets for only 15 of 102 indicators, primarily focusing on climate change, energy consumption and education - leaving major SDG indicators without agreed EU targets.

The 2021 Annual Sustainable Growth Strategy explicitly states that 'the Recovery and Resilience Facility must guide and build a more sustainable, resilient and fairer Europe for the next generation in line with the United Nations Sustainable Development Goals'. The Recovery and Resilience Facility has many strengths: it combines investments and reforms, and in principle is very much performance-based. Yet the guidelines provided to member states do not make explicit reference to the SDGs. Even so, the Six Pillars have close parallels with them. Combined, the Multiannual Financial Framework and NextGenEU provide around €2 trillion of financial firepower to accelerate the transformation of the EU over the 2021-2027 period.

The 'Fit for 55' package adopted in July 2021 provides more clarity on how the EU plans to achieve its climate objectives by 2030. The June 2021 Council of the European Union's Conclusions, an attempt to re-align policies to the SDGs, reaffirms the Union's commitment to the goals and acknowledges the need 'to focus on concrete operational actions at all levels to accelerate the implementation of the 2030 Agenda and its SDGs through concrete objectives, measures and timelines […]'.

The COVID-19 pandemic is a setback for sustainable development in Europe and globally, yet now is not the time to scale back SDG aspirations. The pandemic pushed the EU and individual member states (and the rest of the global community) to focus on short-term emergency issues, and it modified policy priorities and semantics. The increased focus on issues such as 'resilience', 'strategic foresight' and the European Health Union - which aims to strengthen the EU's ability to respond to, and coordinate responses to, future public health crises - is very much compatible with the SDGs. With the 2030 Agenda coming under increased pressure due to the pandemic and geopolitical tensions, it is more crucial than ever that the EU continues to explicitly state its commitment to achieving the SDGs and connects its policy objectives and mechanisms to them. The SDGs remain the first and only comprehensive international agenda adopted by all UN Member States to cover all aspects of sustainable development: economic, social and environmental. It is increasingly clear that achieving the Paris Climate Agreement and Green Deal requires achievement of the SDGs, including making major breakthroughs on socio-economic goals by 2030. And the EU can only lead credibly on the SDGs bilaterally or on the global stage if European domestic policies are clearly steered towards and linked to achieving them.

We propose four priority actions to accelerate the implementation of the SDGs in the EU and internationally (Box 1).

Box 1. Four priority actions to accelerate implementation of the SDGs in the EU and internationally

As reviewed and discussed in this section, many proposed and existing EU policies aim to achieve the 2030 Agenda, even though they may not be explicitly framed in SDG terms. While there is no need to launch a new EU-wide SDG strategy process, we underline the need to (1) maintain strong political commitment to the SDGs; (2) simplify SDG communication by clarifying how the EU plans to achieve the SDGs, (including targets, timelines, and roadmaps); (3) mobilize stakeholders and science; and (4) monitor and regularly report on SDG progress. These priorities were largely echoed by the Council of the European Union in June 2021.

The following actions would solidify the EU's leadership position on the SDGs internationally and its credibility vis-à-vis partners and international institutions.

Action 1. The three pillars of EU governance - the European Parliament, the European Council and the European Commission - should issue a shared political statement reaffirming their strong commitment to the 2030 Agenda in response to the COVID 19 pandemic and its aftermath, and to renewed momentum towards achieving the SDGs. This renewed commitment should be reflected in Plenary Sessions of the Conference on the Future of Europe, which aims to present its conclusions in the second quarter of 2022.

Action 2. The European Commission should clarify how the EU aims toachieve the SDGs. As emphasized in this report, the EU offers a plethora of policies supporting the SDGs (such as those under the European Green Deal, the Updated Industrial Strategy, or the European Pillar of Social Rights), but it remains difficult to see how timelines, roadmaps and quantified targets will come together to achieve them. This clarification could take the form of a Communication and be updated regularly, covering internal EU priorities as well as international actions to solidify the SDG narrative inside the European Commission and vis-à-vis the public. The 2020 Staff Working Document on the SDGs is an important step in this direction (European Commission, 2020c). Such a Communication could also show where existing policies need to be more ambitious and where additional policies are required.

Action 3. The European Commission should mobilize civil society for the SDGs - by renewing the mandate of the Multi-Stakeholder Platform for the SDGs or establishing a new structure or platform for engagement. Launched in 2017, the Multi-Stakeholder Platform for the SDGs was instrumental in supporting the efforts of the European Commission and EU leadership to implement the 2030 Agenda and monitor SDG progress. The mandate of the Multi-Stakeholder Platform ended in December 2019 and was not renewed. Mobilization of civil society, including NGOs and scientists, is crucial to support the development of sound SDG policies and their effective monitoring and implementation.

Action 4. The European Commission should prepare an EU-wide Voluntary National Review (VNR) to present at the 2023 High-Level Political Forum ahead of the September 2023 SDG Summit. This VNR would complement existing EU initiatives to monitor and report on the SDGs, including Eurostat’s annual report, and help bring international visibility to the EU’s SDG policies and commitments. The VNR should cover internal priorities as well as international actions and diplomacy towards restoring and protecting the global commons, and it must address international spillovers. The process could begin in 2022, with the objective of presenting the VNR in 2023, ahead of the United Nations SDG Summit.

2.1 Clarifying and operationalizing the SDG narrative in the EU

Although the European Commission was astute in not launching a separate SDG strategy process in parallel to the European Green Deal, it needs to further strengthen and simplify the narrative of how the SDGs can and will be achieved inside and outside the Union. The EU has legislative and policy tools in place, or in preparation, to address most SDG challenges, but even seasoned observers can become lost in the plethora of instruments, targets and indicator frameworks.

An integrated approach to the SDGs in Europe must focus on three broad areas: (i) internal priorities; (ii) diplomacy and development cooperation; (iii) international action to restore and protect the global commons and addressing negative spillovers.

2.1.1 Internal priorities

As underlined by the SDSN for some years, the SDG transformations concept can help provide a narrative that is operational and easy to communicate (Sachs et al, 2019). Previous editions of the Europe Sustainable Development Report have proposed six SDG transformations for Europe (Box 2), some of which are covered, partly covered or not covered by the European Green Deal and may be covered through other policy documents. Clear targets and milestones should also be set for social and economic SDGs. The new 2030 target proposed to reduce the number of people at risk of poverty or social exclusion by at least 15 million goes in the right direction. Previous ESDR editions described in detail key priorities and tools that can be leveraged to advance each of the six SDG Transformations.

Box 2. Six SDG Transformations for Europe

The 17 SDGs and their 169 targets describe goals to be achieved by 2030, but they do not identify how the EU and member states might organise themselves to achieve them. Several groups have proposed broadly consistent sets of six transformations that together could achieve the SDGs. These include The World in 2050 (TWI2050, 2018), Sachs et al. (2019b), and the UN Independent Group of Scientists appointed by the Secretary-General (2019). Drawing on all three frameworks, in the 2020 ESDR we proposed six 'SDG Transformations' that align well with the EU's signature policy initiatives, including the Green Deal. These six SDG Transformations can help the EU map out an operational strategy that ensures key synergies and trade-offs are addressed; reduces complexity by focusing on six priority areas; and supports stakeholder engagement around each transformation. They are important tools for strengthening policy coherence across EU instruments and among member states. The six Transformations are presented below, along with their links to the eight 'transformative policies' included in the European Green Deal (EGD).

1. Education, Skills, Decent Work, and Innovation: Ensure top-quality education, including lifelong learning, for all Europeans and strengthen innovation in strategic technologies and industries. EU countries must increase investments in innovation, educational quality, and the development of skills for lifelong learning, including digital skills for all. Critical instruments include the European Education Area, Horizon Europe, and the Green Deal EU missions. [Partly covered in EGD 2.2.3]

2. Sustainable Energy: Promote energy efficiency, achieve zero-carbon power generation, decarbonise industry and create new jobs. A central pillar of the Green Deal, sustainable energy actions focus on mobility, buildings and industry and decarbonizing power generation and transmission. The bulk of the necessary decarbonization will occur through a combination of energy efficiency measures and electrification of point sources with zero-carbon power using smart grids. Success will require clear trajectories and roadmaps, as emphasized under the European Climate Law. [Covered by EGD 2.1.1 and 2.1.2]

3. Sustainable Communities, Mobility and Housing: Strengthen cities and other communities by promoting sustainable and smart mobility, renovating housing, ensuring sustainable building standards and supporting new jobs. The SDGs and the objectives of the Green Deal both have a strong territorial dimension. Communities across Europe - be they large metropolises, cities, small towns, or villages and rural settlements - all need to become more liveable and require sustainable mobility and housing. The role of subnational entities, including cities and regions, is crucial to achieving the SDGs and ensuring a fair transition. Stakeholder engagement and consultation processes at the subnational level can support the development of effective solutions and transformations and greater adherence by populations. [Partly covered by EGD 2.1.4 and 2.1.5]

4. Sustainable Food Production, Healthy Diets, and Biodiversity Protection: Ensure sustainable agriculture and ocean use, promote healthier diets and behaviours, and protect and restore biodiversity and ecosystems with decent incomes for farmers and fishermen. The 'Farm-to-Fork' strategy recognises that sustainable food production, healthy diets and biodiversity protection can only be addressed together. Siloed policies and instruments will not succeed. This transformation covers the EU's common agricultural policy, the goal of assuring healthy food for all, the common fisheries policy, the biodiversity strategy, the new EU forest strategy, and the promotion of reductions in greenhouse-gas emissions. It also includes building resilience through the European Climate Law; the 'long-term vision for rural areas' that comprises the proposed Rural Pact and Rural Action Plan as well as a zero-pollution action plan for water, air and soil; and the assurance of deforestation-free value chains. Part 3 discusses in greater detail priorities and challenges to accelerate the agri-food transformation in Europe. [Covered by EGD 2.1.6 and 2.1.7]

5. Clean and Circular Economy with Zero Pollution: Curb pollution, reduce material consumption, and minimise the environmental impact of European industry and consumers. The 'circular economy action plan' makes it clear that the use of materials such as biomass, fossil fuels, metals and minerals, along with associated water generation, is projected to continue to increase in the EU in the short term. The ecological impact of material extraction depends on the local context of extraction, the type of materials extracted, and the technologies used. The action plan emphasises the need for faster action, with a particular focus on key product value chains (electronics and ICT, batteries and vehicles, packaging, plastics and textiles, buildings and construction, along with food, water and nutrients). These efforts must integrate with the Green Deal's 'zero-pollution vision for a toxic-free environment'. [Covered by EGD 2.1.3 and 2.1.8]

6. The Digital Transformation: Build cutting-edge digital infrastructure, strengthen innovation, and protect citizen's rights to their data and European democracy. EU and European companies must become leaders in the digital revolution if the region is to maintain its high living standards. As emphasized in the Recovery and Resilience Facility, this will require substantial investments in technology innovation and digital infrastructure. The Commission has identified critical needs, but more specificity and more ambitious targets are required to realise the Digital Transformation. [Not covered by EGD]

While public health remains primarily the responsibility of individual member states (which is why 'health' is not included within the proposed six SDG transformations), recent measures adopted to strengthen the European Health Union should increase the EU's ability to complement national health policies. The Multiannual Financial Framework and EU4Health work programme includes a budget of €5.3 billion over 2021-2027, a significant increase from the previous period. The Recovery and Resilience Facility targets an estimated €40 billion to health actions, including towards workforce training and accelerating the digitization of health systems. Europe has also strengthened the mandates of the European Centre for Disease Prevention and Control and the European Medicines Agency and announced the creation by 2023 of a new organization modelled on the US biomedical advanced research and development authority (BARDA), which will notably build up stockpiles of key medicines and equipment to strengthen the EU's ability to launch a coordinate its response to major health crises and threats in the future.

To ensure a 'just transition', the EU's energy transformation will need to leverage competitive advantages across member states and use timebound technology benchmarks. It must be aligned with other SDGs - including those related to education, skills, affordable energy, employment and poverty. The updated EU industrial strategy rightly emphasizes the need to address strategic dependencies and accelerate the twin digital and green transitions. The pandemic recovery phase has highlighted EU member states' vulnerability to variations in global energy prices, including fossil fuels. This underscores even more the need to accelerate the transition to a clean and integrated energy system in the EU. The 'Fit for 55' package proposes phasing out registrations of new light-duty vehicles by 2035 unless they are carbon neutral. Construction of fossil-fuel power plants should stop immediately, while phase-out plans for coal power need to be accelerated. Such time- bound benchmarks help establish clear long-term roadmaps to accelerate the transition to an integrated and clean energy system across the EU and mobilize all stakeholders around shared objectives. The EU Just Transition Fund and proposed Social Climate Fund can help support a fair transition and reverse some of the regressive effects of decarbonisation policies.

2.1.2 External action and development cooperation for the SDGs

The EU must lead multilateral green deal and SDG diplomacy, including with China and Africa. EU leadership and diplomacy will be critical to advancing key multilateral processes towards achieving the SDGs: at the UN General Assembly, the High-Level Political Forum on the SDGs, the G7 (under German Presidency in 2022), the G20 (under Indonesia Presidency in 2022), and the Annual Meetings of the IMF and the World Bank. Open dialogue and cooperation with China (including on vaccine production and distribution, ending COVID-19 globally, infrastructure in Eurasia, and cooperation in Africa) will be particularly critical. The sixth EU-African Union Summit in early 2022 should provide a good opportunity to move towards a new, ambitious partnership with Africa. The EU and member states should also take the lead in mobilizing adequate financial resources from rich countries and rich individuals - who are mostly responsible for the climate and biodiversity crises - to support SDG transformations and climate adaptation in the most vulnerable countries, such as Small Island Developing States.

2.1.3 International action to restore and protect the global commons and address negative spillovers

To ensure international legitimacy, the EU must lead international efforts to restore and protect the global commons and address negative international spillovers. We underline the negative impacts that are generated by European countries and rich countries in general on the rest of the world through trade and financial flows. Besides deforestation and environmental impacts embodied into EU's consumption of foreign goods and services, tolerance for poor labour standards in international supply chains can harm the poor, particularly women, in many developing countries. Examples of financial spillovers include those related to investments, tax havens and banking secrecy, which can inhibit other countries' ability to raise the public revenues needed to finance the SDGs. Addressing such spillovers is a matter of policy coherence and credibility. It will require coherent trade and external policies through Green Deal Diplomacy, strengthened tax cooperation and transparency, the application of EU standards to exports, and curbing trade in waste. A comprehensive due-diligence regulation, reciprocal transformation partnerships, and strengthening of sustainability in EU trade agreements will all help. Moreover, the EU needs to systematically track such spillovers and assess the impact of European policies on other countries and the global commons. Finland's 2020 Voluntary National Review includes an entire section on 'Externalities and Spillovers'.

In our 2019 and 2020 editions, we reviewed in detail the key tools for SDG implementation, including the European Semester, the Multiannual Financial Framework, Horizon Europe, business standards, and SDG monitor- ing and reporting frameworks. This 2021 edition focuses on the alignment of the Recovery and Resilience Facility and National Plans and the SDGs. The next part provides a deep dive into what is covered in SDSN's framework under Transformation 4 (sustainable food production, healthy diets, and biodiversity protection) where, as emphasized in the SDG Index for Europe, major challenges remain.

2.2 The Recovery and Resilience Facility and the SDGs

In the summer of 2020, the EU responded to the challenges posed by the COVID-19 pandemic with a package of policies and funds to boost economic recovery while pursuing Europe's green and digital transitions. Similar packages have been announced by several countries since, however, unlike the EU, few have announced medium-term programs, focusing instead on annual budgetary plans. Nor have they aimed at covering the entire economy, limiting their focus to specific economic sectors. The EU is also unique in its intention of going beyond economic relief spending by designing a comprehensive recovery spending program. Therefore, the EU's approach can serve as a valuable case study to assess the consistency of short-and medium-term policy priorities with the achievement of the SDGs.

To steer the work of the Recovery and Resilience Facility and coordinate this with the European Semester, in August 2020 the European Commission established a dedicated Recovery and Resilience Task Force (RECOVER). To benefit from the Facility's support, member states were requested to prepare National Recovery and Resilience Plans (NRRPs) by the second quarter of 2021, within the framework of the European Semester. Detailed guidelines were issued to guide the drafting of these NRRPs, including a legal stipulation that countries align their plans with Commission policy recommendations made through the European Semester process, and that a minimum volume of funds must be allocated to climate policies and digitalization - at least 37% and 20% of the NRRP budget, respectively.

In the light of this process, we analyse the NRRPs through the lenses of the SDGs. In section 2.3, we build on the process used in the Sustainable Development Report to assess government efforts to achieve the SDGs. SDSN has worked with its European networks of experts to analyze several NRRPs and determine:

• whether the NRRPs make explicit reference to the SDGs and the extent to which the plan addresses the country's main gaps in SDG performance, as identified by the 2020 Europe Sustainable Development Report;

• whether stakeholders have been consulted and if the national parliament was involved in the process;

• whether the NRRPs are connected to other national strategies, such as national SDG strategies or National Climate and Energy Plans.

In section 2.4 we analyse two NRRPs in more detail: those of Italy and Spain (which together will receive 41% of the EU Recovery and Resilience Facility grants). We explore how aligned the plans are with the SDGs, identify gaps in SDG coverage, and try to determine to what extent these two countries are addressing, via their NRRPs, their biggest SDG challenges (according to their national profiles and dashboards presented in this report). This work was guided by two main policy questions:

• How aligned is this NRRP with the SDGs, based on an analysis of each individual measure proposed in the plan?

• Which SDGs are insufficiently addressed?

This type of analysis - in conjunction with the SDG country dashboards, which offer a perspective on national progress towards achieving established targets - can help countries identify areas within the SDGs that still require considerable investment and reforms and are not being addressed by their NRRP. It can also help contextualize the NRRP and identify synergies across goals.

2.3 Reference to the SDGs in National Recovery and Resilience Plans (NRRPs)

The information in this section was collected through an online SDSN survey of experts in each of the nine countries whose plans had been approved by the Council of the European Union by 28 July, 2021: Belgium, Cyprus, France, Germany, Greece, Italy, Latvia, Portugal and Spain. The results are presented in the table below.

According to the survey results, although only three of the nine countries analyzed (Belgium, Greece and Spain) acknowledged the SDGs in their NRRP as a cornerstone of their approach, integrating an SDG focus throughout. Another four (Cyprus, Germany, Italy and Latvia) also referenced the SDGs explicitly, if not as an overarching framework guiding the design of the NRRP. Apart from Cyprus, all of the countries surveyed have national SDG implementation strategies, but only Germany, Latvia and Spain link their NRRP to this. All nine NRRPs mention links with other national policy frameworks, which could hint at efforts to ensure policy coherence across sectors, while a few respondents explicitly mentioned inconsistencies between the NRRP and existing policies. Some countries are working on linking their NRRP to the SDGs: Italy, for example, has conducted ex post analysis to link their NRRP to their National Sustainable Development Strategy1 while Spain is in the process of conducting an alignment of the whole national budget with the SDGs.2

In most cases, the survey found that NRRP funds are only part of wider national recovery planning. For example, only 40% of France's overall recovery programme will be financed through the Recovery and Resilience Facility. However, most countries haven't made public a rigorous budgetary assessment to determine the precise funding required to achieve the long-term transformations required by the SDGs.

Our research shows that although most countries held open consultations with a variety of stakeholders in designing their plans (for example, with advisory bodies, trade unions, business associations, subnational authorities), the final NRRPs do not indicate that their inputs were given enough attention or weight to contribute substantially. For example, the off-track indicators mentioned in Germany's National Sustainable Development Strategy were not taken as the starting point of the country's NRRP, which would have been logical. Neither did the 2030 Agenda play a systematic role, as Germany's sustainable development community was not systematically consulted. In general, the survey results show that civil society, academia and the general public were the least-involved bodies in the drafting of the NRRPs.

To ensure they support long-term transformations, NRRPs need to enjoy broad societal support and withstand political changes. Although the European Commission instructed member states to design these plans in consultation with various stakeholders, to ensure broad ownership of the transformations proposed, several organizations have raised concerns about a lack of transparency, extremely brief consultation periods, or the targeting of consultations to specific sectors.

Over the coming months and years, it is vital that all EU member states systematically and explicitly mainstream the SDGs into their recovery/ resilience plans and annual reform programmes. The European Semester must be further developed following a corresponding design, while the Stability and Growth Pact should be turned into a sustainable development pact that puts the Green Deal into practice to achieve the SDGs and reach climate neutrality. Sustainable development actors from academia, civil society and business will need to be fully involved in the European Semester consultation mechanisms and corresponding national programmes. To implement the Green Deal and achieve the SDGs, the EU will have to mobilize additional public and private funds, including by new EU-wide sources of revenue, which already by their raising usually have a steering effect towards sustainable development. These own resources should not only be used for the early repayment of the NGEU borrowing, but above all also enable additional investments.

Figure 2.1 | ESDR Survey on the National Recovery and Resilience Plans in the EU

Figure 2.1 | ESDR Survey on the National Recovery and Resilience Plans in the EU

Source: Authors

2.4 Detailed analysis of SDG align-ment for two NRRPs (Italy and Spain)

In line with EU legislative requirements, in spring 2021, each EU country prepared an NRRP identifying institutional reforms, public investments and the allocation of public funds to support or facilitate private investments. To address the two questions outlined above, and offer actionable knowledge to decision-makers on how to work beyond the officially adopted NRRPs, we started with a detailed study of these plans, analysing the individual measures proposed. For each measure, we tried to identify whether there were linkages with any of the 169 targets within the SDGs. Only those measures that concretely addressed a target were considered to have a linkage with a specific SDG. For example, in the Spanish NRRP, under Component 4: Ecosystems and Biodiversity, the second investment devotes €551.6 million to the 'conservation of terrestrial and marine biodiversity' - with the ultimate objective of protecting at least 30% of Spanish marine territory by 2030 and with intermediate milestones of 15% by 2023 and 18% by 2025 (Government of Spain, 2021a). This investment can therefore be linked to Goal 14, target 14.5, which reads 'by 2020, conserve at least 10% of coastal and marine areas, consistent with national and international law and based on the best available scientific information'.

A number of measures address more than one target, with interlinkages across multiple SDGs. In Mission 2 of the Italian NRRP, for example, (devoted to the green revolution and ecological transition), Component 2: Energy transition, hydrogen, network and sustainable mobility includes Investment 5.1, which allocates €1 billion to the development of international, industrial and R&D leadership on renewables and batteries. This measure clearly impacts SDG 7, target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix. But it could also contribute to the achievement of SDG 9, target 9.1: Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all, and - less directly - SDG 13, target 13.2: Integrate climate change measures into national policies, strategies and planning.

Following this initial process of linking NRRP measures to specific SDGs, we introduced a second level of analysis. In cases where there appeared to be a link to an SDG, but the target lacked detail, we looked to the ESDR indicators. We considered whether any specific measures in the NRRP could be expected to spur progress on any of these ESDR 2020 indicators.

We then proceeded to assign the value of funds devoted to each measure to the corresponding SDG(s) it addresses. To account for synergetic effects, the total budget dedicated to each measure was not divided among different SDGs because, as explained above, the same action can be considered to contribute to more than one Goal. As a result, the sum of the budget assigned to all SDGs for this analysis will be higher than the total NRRP budget. With these results, we created a matrix of NRRP measures per SDG.

In this analysis we assume no negative impacts on any SDG. This is justified by the rigorous assessment conducted by the European Commission to ensure that every NRRP complied with the 'do no significant harm' principle, in line with Sustainable Finance rules for all six main environmental objective areas (climate-change mitigation and adaptation, pollution reduction, circular economy, protection of nature, and protection of water and marine resources). In addition to avoiding negative impacts, the Do No Significant Harm Technical Guidancealso aims to ensure that the NRRP analyses and addresses any potential trade-off across SDGs. Moreover, each NRRP had to comply with the EU Pillar of Social Rights. Both NRRPs analysed in the present work constitute the final versions submitted to the European Commission on 30 April 2021, whose assessment was approved by Council implementing decision 10160/21 of 13 July 2021 alongside the NRRPs from Austria, Belgium, Denmark, France, Germany, Greece, Latvia, Luxembourg, Portugal and Slovakia.

The Spanish and Italian NRRPs

The Spanish plan integrates four transversal axes - ecological transition, digital transformation, gender equality, and social and territorial cohesion - cutting across ten key 'policy levers'. Identified as having the potential to quickly generate activity and employment, promote short-term economic recovery, and set the basis for long-term transformation processes, these ten levers coordinate concrete activities that are presented in a total of 30 components, articulating coherent investments and defined reform projects with the objective of 'modernizing the country' (Government of Spain, 2021b).

For example, the first policy lever: 'Urban and rural agenda, development of agriculture and the fight against depopulation [of rural areas]' coordinates the first three of these 30 components:

• Component 1: A sustainable, safe and connected mobility shock plan in urban and metropolitan environments;

• Component 2: Implementation of the Spanish Urban Agenda urban rehabilitation and regeneration plan; and

• Component 3: Environmental and digital transformation of the agri-food and fisheries system.

With a total budget of €69.5 billion in the form of non-repayable support, the Spanish NRRP consists of 109 investments and 102 reforms. Both the Italian and Spanish plans include details on funds that will complement Next Generation EU (NGEU) funding, mostly coming from their regular national budgets.

The Italian plan consists of 6 'Missions' divided into 16 components, for a total budget of €191.5 billion, of which almost €69 billion is in the form of non-repayable support, with the remaining €122.5 billion in the form of loans.3 The 6 Missions are: 'Digitalization, innovation, competitiveness, culture and tourism', 'Green revolution and ecological transition', 'Infrastructures for sustainable mobility', 'Education and research', 'Cohesion and inclusion', and 'Health'. The RRP includes 184 sectoral measures: divided into 134 investments (235 including sub-investments) and 50 sectoral reforms, spread across the 6 Missions. Also included are two 'horizontal reforms' ('public administration' and 'justice') and a number of 'enabling reforms' (such as the simplification of specific legislation and the promotion of competition) for a total of 63 reforms, including the sectoral ones. These last two types of reforms (horizontal and enabling) have a wider scope however and are transversal to all Missions. For these reasons, they do not have a specific budget allocated and therefore are not taken into account in the quantitative analysis.4 In addition, the Italian RRP has three transversal axes which are integrated throughout the plan and are similar to those included in the Spanish RRP, namely: Gender equality; Protection and enhancement of young people; and Overcoming territorial disparities.

Links to the SDGs

For both plans, we identified links with the SDGs for over 90% of the measures introduced in the NRRPs. Multiple linkages to each of the 17 SDGs were found for both NRRPs. The matrix of results is found below for each plan.

As the graphs show, there is significant similarity between the two countries across the full range of SDGs, in terms of which goals appear to be the focus of priority funding. In particular, both plans have strong links with SDG 9: Industry, innovation and infrastructure; SDG 8: Decent work and economic growth, and SDG 13: Climate action. In addition, SDG 4: Quality education, SDG 7: Affordable and clean energy and SDG 11: Sustainable Cities and Communities are also well represented, both in terms of the number of measures addressing their targets, as well as budget allocations. This is congruent with the recommendation by the European Commission that member states define investments and reforms to create jobs and growth in the following flagship areas: power up (clean technologies and renewables); renovate (energy efficiency of buildings); recharge and refuel (sustainable transport and charging stations); connect (roll-out of rapid broadband services); modernize (digitalization of public administration); scale-up (data cloud capacities and sustainable processors); reskill and upskill (education and training to support digital skills).

These findings are also consistent with the semantic analysis conducted by the Joint Research Center (JRC) to identify links between SDGs and the European Union policy documents connected to the recovery.5 Their results show a strong predominance of keywords connected to economic growth and employment (SDG 8). The JRC study found many references within the EU Recovery Plan that use language directly linked to SDG targets 8.1, 8.3, 8.5 and 8.6, as well as 4.4, 9.5 and 13.2.

Figure 2.2 | Links of the Spanish Recovery and Resilience Plan

Figure 2.2 | Links of the Spanish Recovery and Resilience Plan

Source: Authors

Figure 2.3 | Links of the Italian Recovery and Resilience Plan

Figure 2.3 | Links of the Italian Recovery and Resilience Plan

Source: Authors

Figure 2.4 | Weight given to each SDG in the Spanish and Italian NRRPs, based on percentage of budget allocated

Figure 2.4 | Weight given to each SDG in the Spanish and Italian NRRPs, based on percentage of budget allocated

Source: Authors

Analysis of results 6

Spain

With these results, we now seek to answer the questions set out at the beginning of this chapter. First, we see that both NRRPs address all 17 SDGs, but to varying degrees.

As described above, the bulk of the Spanish NRRP measures and funds target SDGs 9, 8, 13, 7, 11 and 4 - as well as SDG 10 (Reduced inequalities), although this is less of a priority in the Italian NRRP. However, these SDGs do not correspond with those identified in the Spanish dashboard (featured in this report) as representing major challenges and thus in need of further investment and reform. An analysis of the indicators used in this report for SDG 9, presented in the country profile, reveals that most of the indicators for this goal are in green (considered to be on route to being achieved). It does have two indicators in yellow (challenges remain), including expenditure in R&D. The NRRP significantly addresses this indicator, which can be linked to Target 9.5: Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries (…). This target is addressed in 19 measures in the Spanish NRRP, particularly through Component 17: Science, technology and innovation.

Similarly, SDG 8 is not red (major challenges remain) as a whole in the Spanish dashboard, but does have one red indicator: Youth not in employment, education or training (NEET). This indicator is connected to Target 8.6: By 2020, substantially reduce the proportion of youth not in employment, education or training. We have found at least seven different measures to address this target, including four reforms within Component 23: New public policies for a dynamic, resilient and inclusive labour. This component identifies reductions in youth unemployment and temporary employment (very prevalent in youth populations) as key objectives for the NRRP and proposes an investment of €765 million to address youth unemployment via a series of programs.

Figure 2.4 offers insights on the second question: which SDGs are insufficiently addressed by the recovery plan. The Spanish dashboard indicates that, like most European countries, it is the environmental goals that require further action. Spain's dashboard shows the following goals in red: SDG 2: Zero Hunger; SDG 13: Climate Action; SDG 14: Life under Water and SDG 15: Life on Earth.

Only 6% of measures in the Spanish plan and less than 1% of its budget is allocated to SDG 2. Component 3 addresses sustainable food systems with an estimated budget of €1,051 million. This component is very thorough: it aims to improve the quality of the final products, modernize animal and plant health laboratories, improve capacity building and biosecurity systems in livestock farming, strengthen prevention and protection against pests of plants, develop the circular economy of the sector, promote precision agriculture and further organic production, promote seasonal and local consumption, promote precision agriculture, and reduce food waste. An analysis of the Spanish country report reveals that the principal areas where significant challenges remain are those connected with food habits and nutrition (with the following two indicators in red: prevalence of obesity and human trophic level). The Spanish NRRP does not address this key area, which will be essential to achieve the deep transformation called for by the SDGs on sustainable food, land, water and oceans (Sachs et al., 2019). More information on this transformation including key challenges in Europe is presented in the next part of this report.

Up to 38 measures address SDG 13: Climate Action. These are comprehensive and range from establishing a regulatory framework for the promotion of renewable generation to the development of a plan to integrate renewables into the energy system. Over 35% of the RRP budget can be linked to the targets of this SDG, including funds for the electrification of transport and over €1.5 billion to develop the technological capacity to produce and use renewable hydrogen, creating innovative value chains. While overall this goal is well addressed, with this analysis we cannot evaluate whether these measures have been chosen by rigorously designing a net zero pathway and identifying key interventions to reach net zero by 2050.

Considering Spain's current performance on SDGs 14 and SDG 15, the plan appears to have devoted insufficient attention in terms of individual measures and budget devoted to these two goals. This could be concerning, taking into account the decreasing trend of Spain's performance on SDG 15 and its stagnating trend on SDG 14. However, NRRP Component 4 focuses entirely on ecosystems and biodiversity. This component has an estimated budget of €1,642 million, with ambitious targets on conservation and restoration. When we include these investments, compared to other member states, the Spanish plan has the highest allocation to directly support biodiversity and ecosystem services. In addition to Component 4, Component 3 devotes €95 million to boost sustainability, research, innovation and digitalization in the fisheries sector. This will be important in addressing some of Spain's biggest performance challenges regarding SDG 14 per its country profile, such as unsustainable fishing practices and healthiness of fish stocks. In summary, the plan includes reforms and investments related to the protection, conservation and restauration of marine and terrestrial ecosystems and their biodiversity, to the conservation of protected habitats and species, as well as to the fight against invasive alien species, all of these in line with the new EU Biodiversity Strategy included in the European Green Deal. In addition to this, all objectives related to terrestrial and marine ecosystems will be pursued under an updated framework of action: the Spanish Strategic Plan for Natural Heritage and Biodiversity.

It is important to note that part of the negative performance of Spain on SDG 14 and SDG 15, per its country profile, is attributable to spillover effects on biodiversity through trade. To address this, the Strategic Plan for Natural Heritage and Biodiversity should also focus on reducing these adverse effects. Finally, SDG 14 and SDG 15 should be the focus of rigorous monitoring to ensure that the measures proposed improve current trends.

Finally, while SDGs 5 is amongst the goals less covered by the NRRP, by individual measures, gender equality is one of the four transversal axes of the Spanish NRRP. A sectoral analysis of all components through the perspective of gender equality is offered in Annex 4 of the plan. In that sense, the plan incorporates the objective of offsetting the foreseeable negative impacts of the pandemic on the two groups hardest hit by the previous financial crisis: women and young people (Government of Spain, 2021c). In addition to the transversal perspective, the plan offers a number of individual measures focused at promoting female entrepreneurship, raising female training and employment rates and improving, strengthening and reorganizing the long-term care system, as well as reforms focused on closing the gender gap.

Italy

As with Spain's NRRP, the SDGs that are covered most thoroughly by Italy's NRRP (SDG 9 in particular) do not always coincide with those identified in its dashboard as representing major challenges. An analysis of the Italian country report reveals that almost all indicators for SDG 9 are green, except for one yellow (challenges remain) - expenditure on R&D - and one orange (significant challenges remain) - basic or above-basic digital skills in the middle-aged population. The Italian dashboard shows weaker performance on SDG 13: Climate action, where two of the three related indicators are in red: CO₂ emissions in imports and CO₂ emissions from fossil fuel combustion. In that sense, the Italian NRRP does appear to sufficiently address SDG 13, including through the allocation of important resources.

Like the Spanish plan, the Italian NRRP devotes few measures and limited budget to SDGs 14 and 15. This is concerning, considering that both goals present major challenges in Italy, as illustrated in its dashboard. In particular, the negative trends for SDG 14 indicators related to fishing practices (for example, fish caught by trawling) should have been addressed with specific measures regulating this activity. Likewise, negative trends on SDG 15 indicators related to species survival and biodiversity threats embodied in imports of goods and services seem not to have been adequately tackled. However, as has been noted by Cavalli et al. (2021), Italy's RRP primarily addresses the environmental component of sustainable development through a focus on energy transition and abatement of climate-altering emissions, rather than through the protection of ecosystems and biodiversity. In this regard, the numerous measures contributing, for example, to SDGs 7 and 13, may be considered as covering (at least partially) environmental questions as well.7

SDG 2 is partly addressed through investments in food transport and logistics to reduce environmental and economic costs of the agri-food system, accompanied with investments to promote innovations in production processes, enhanced traceability of agro-food products and greater uptake of precision farming technologies, to an aggregated sum of €1.3 billion. However, the NRRP gives limited attention to measures focusing on healthy diets or education, which is of particular concern given the centrality of the agri-food system in Italy and its importance to achieving sustainability at the global level, as well as Italy's poor results on related SDG 2 indicators, which are yellow (prevalence of obesity), orange (yield gap closure) or red (human trophic level) (ASviS, 2021).

As anticipated, climate action features strongly in Italy's NRRP. While the proposed measures do not all directly contribute to achieving SDG 13 or its specific targets, the focus on climate action and greening will hopefully contribute to overcoming some significant challenges and bolster Italy's performance with regard to this Goal. The resources allocated to clean energy may also contribute to achieving SDG 7, on which Italy is moderately improving but still has some significant challenges, according to its dashboard.

Finally, the Italian NRRP also includes two 'horizontal reforms', namely public administration and justice, as well as a number of 'enabling reforms'. These should be considered integral elements of the plan and catalysts for its implementation. Horizontal reforms comprise structural innovations to the legal system, of transversal interest to all six 'Missions' and aimed at improving equity, efficiency and competitiveness, and with them, the economic climate of the country. 'Enabling reforms' also comprise functional interventions to guarantee the implementation of the RRP and to remove administrative, regulatory and procedural obstacles that affect economic activities and the quality of services provided to citizens and businesses. Despite not being 'quantifiable', both kinds of reforms contribute to the achievement of SDGs, insofar as they pave the way for single measures to be implemented effectively.

To conclude these analyses, although we have not established a system to weigh how much each measure contributes to achieving the SDGs, and we have therefore considered both direct and a number of indirect links to the SDGs, Theodoros Zachariadis did include a weighting system in a similar analysis of Cyprus's RRP (Zachariadis et al., 2021). He concluded that there is significant value in choosing interventions that address several targets, creating synergies across goals. An example would be measures aimed at enabling the zero-carbon transition while promoting the upskilling of workers and tackling inequality. We could also list investments to promote research and innovation that support the green transition, or measures to skill, reskill and upskill the workforce to promote a just transition. Other investments with multiple synergies relate to the circular economy, such as utilizing agricultural and municipal waste to produce biogas for power and heat generation - which reduces waste disposal and methane emissions, improves the quality of life in cities and communities, and decreases the use of fossil fuels to satisfy the need for energy. Moreover, modernizing water distribution and wastewater treatment facilities can address water scarcity, improve water quality and reduce the energy requirements of the water sector.

It is important to note that the analysis presented here does not evaluate how ambitious these NRRPs are, nor whether they propose a truly transformative agenda. In fact, many of the measures could result in merely incremental improvements within particular sectors if they have been designed without a truly systemic perspective. Conversely, the analysis also does not evaluate whether any of the reforms proposed by both Spain and Italy that require only small budgetary allocations might have some impact in addressing the particular challenges these countries face to achieve the SDGs. Moreover, beyond the formulation of appropriate policies and measures, all of the NRRPs will need to be appropriately monitored and evaluated. For this purpose, the European Commission has announced it will establish a Recovery and Resilience Scoreboard by the end of 2021 to monitor the progress of the NRRPs and to promote a 'recovery and resilience dialogue' around their implementation. Ideally, this scoreboard will be aligned with the SDGs and integrated into the Semester process. While this will present some challenges, as documented by the IEEP (Charveriat and Bodin, 2020), it could help simplify the narrative for how the SDGs can and will be achieved inside and outside the Union.

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The Europe Sustainable Development Report 2021 is the third edition of our independent quantitative report on the progress of the European Union and its member states towards Sustainable Development Goals (SDGs). The report was prepared by teams of independent experts at the Sustainable Development Solutions Network (SDSN) and the Institute for European Environmental Policy (IEEP).

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