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As governments increasingly prioritise national interests, security concerns and geopolitical competition over collective global responsibilities, traditional development finance mechanisms are being weakened, repurposed or redirected towards advancing narrow strategic objectives. The Organisation for Economic Co-operation and Development projects a 23 per cent decline in official development assistance (ODA) between 2024 and 2025 (OECD, 2026). This reduction not only has immediate consequences for the lives and livelihood of millions of people in low-income countries (LICs) who depend
on external assistance, but also creates uncertainty for partner countries, disrupts long-term development planning, and undermines the legitimacy and effectiveness of development cooperation. At the same time, development finance needs have risen sharply and continue to rise due to the climate cri-
sis, the impacts of the COVID-19 pandemic, supply chain disruptions and rising food and energy prices. Together, these pressures have contributed to a projected USD 6.4 trillion financing gap for achieving the Sustainable Development Goals (SDGs) by 2030 (OECD, 2025a). Against this backdrop, mobilising greater volumes of private capital aligned with the SDGs has become increasingly important (on the need for the European Union to become
more adept at facilitating private investment, see the contribution by Keijzer & Furness in this volume). In particular, blended finance has frequently been promoted as one key instrument to achieve this objective (on domestic revenue mobilisation as another key approach, see the contribution by Sen & von Haldenwang in this volume). However, despite growing attention from policy-makers and development institutions, the scale of blended finance has remained well below expectations and so far made only a limited contribution to closing the SDG financing gap. Although transaction volumes increased from USD 11.5 billion in 2020 to USD 18.3 billion in 2024, they remain small relative to the estimated USD 4 trillion annual SDG financing gap (Convergence, 2025; OECD, 2025a). As such, the Sevilla Commitment (UNCTAD, 2025) calls for scaling up private capital mobilisation through blended finance and a broader use of risk-sharing instruments. This chapter discusses the benefits and limits of blended finance as well as reforms that are needed at different levels to scale up blended finance and enhance its development impact.

Current disruptions to the rules-based international order, widely perceived as a resurgence of geopolitics, have placed multilateral governance under pressure. Environmental multilateralism is no exception, even as an interconnected ecological crisis comprising climate change, biodiversity and
ecosystem loss, and the degradation and pollution of vital land and water resources calls for far-reaching governance responses and structural transformations to safeguard the possibility of sustainable futures. If the yardstick for delivering the necessary transformations is the ability to avert and minimise global heating, mass extinction and plastic pollution (among other ecological risks), the record of multilateral environmental governance is mixed at best, even during less geopolitically charged times. While it has enabled a large and highly heterogeneous group of sovereign states to converge normatively around common environmental objectives, which is no mean feat, it has fallen significantly short of solving the world’s ecological problems. This implementation gap is widely recognised and supported by scientific evidence from intergovernmental scientific bodies such as the Intergovernmental Panel on Climate Change (IPCC) and the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES). It is therefore evident that multilateral environmental institutions warrant reform if they are to address global ecological challenges effectively. This was the case before the recent geopolitical disruption. However, that disruption – combined with environmentally harmful geoeconomic competition,  territorial conflicts over strategic land, water and mineral resources, and nationalist pushback against scientific evidence and environmental “restrictions” – makes progressive reform even more pressing (Bauer, 2026). We argue that the disruptive dynamics of current geopol-
itics constitute not only an imperative for reform, but also an opportunity to pursue it. This chance should be seized to enhance international cooperation through multilateral environmental institutions and to narrow evident implementation gaps by making those institutions more efficient
and effective. Aligning agendas and policy priorities across levels of governance and across the full range of pertinent multilateral environmental institutions will be an essential first step. Enhancing coordination between the three “Rio Conventions” – the United Nations Framework Convention
on Climate Change (UNFCCC), the Convention on Biological Diversity (CBD) and the United Nations Convention to Combat Desertification (UNCCD) – would provide an obvious starting point.

Why talk about a global sustainability agenda when the world seems to be moving in the opposite direction? As geopolitical tensions rise, multilateral cooperation fragments and economic interdependence becomes a tool of strategic competition, the idea of a shared global framework for sustainable development beyond 2030 may appear increasingly detached from political reality. Yet this chapter argues that such a framework is more necessary than ever, not despite the polycrisis, but because of it. An overarching global sustainability framework beyond 2030 fulfils key functions of enhancing coherence that issue-specific cooperation alone cannot deliver, a statement supported by a large body of literature but contested in current politics. We argue that a global sustainability framework enhances resilience amid the polycrisis, helps to revive a new shared normative language to support sustainability, serves as a reference point for plurilateral partnerships and guides the transformation of economic systems to promote prosperity. These functions explain why the (re)negotiation of a beyond-2030 framework is also rational from a geopolitical perspective. The term “renegotiation” is deliberately defined broadly in this text, as a new sustainability framework beyond 2030 could mean either an actual renegotiation of a new set of goals or rather a continuation of the current goals. However, given the current global power shifts, we acknowledge the possibility that a renegotiation would be difficult to achieve. Both in the case of renegotiation and continuation, the emphasis should also lie on a stronger implementation and accountability architecture.

The final year of United Nations (UN) Secretary-General António Guterres’ second five-year term is 2026. The incoming Secretary-General (referred to here as “she” pending the appointment) will face an almost impossible task. At the time of writing in mid-2026, public hearings have taken place for a range of candidates, but a successor has not yet been selected. She will have to navigate a divided and fragmented global order, steer a UN Secretariat through the third year of a severe liquidity crisis and guide a UN system in the midst of Guterres’ UN80 reform process. Many proposals on what a new Secretary-General could and should do have already been published, and many more are likely to be published before she comes into office. Many of these recommendations concern policy decisions, such as an increased focus on peace and security, while others may require far-reaching structural and governance reforms of the UN Secretariat and the broader UN system (Haug, Novoselova, & Patz, 2026). She will need to decide which reform path to take – a restrained, incremental approach or a bolder and more transformative one (see Figure 1). If the new Secretary-General decides to pursue a bold reform path, she can learn from the failures and successes of the UN80 Initiative, which António Guterres launched in response to the disruptive cuts in UN system funding by the Trump administration and major donors, including Germany. Guterres’ initiative triggered extensive system-wide reform discussions at the UN and enabled a range of efficiency gains whose effects may become apparent in the years to come. At the same time, he shied away from initiating a discussion with member states on difficult governance reforms and chose to drive reform by presenting member states with a large number of proposals, instead of guiding them towards targeted negotiations on impactful reform options. We argue below that, despite the missed opportunities, UN80 can serve as a starting point for bold(er) UN reform that responds to current geopolitical disruptions through structural and governance reforms. Although there is no guarantee of success, a sustainable future for global multilateralism requires such reform discussions, and the new Secretary-General will have the mandate and authority to initiate them early in her term. The Secretary-General can achieve the greatest impact by utilising her symbolic, convening and agenda-setting authority (Cepei, 2026) – the question is whether she chooses to set the agenda for a tamed or a bold reform path.

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