European governance and urban policy | Blog

European Cities Leading the Way in Sustainable Public Finances: The SLPF Project

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Cities play a pivotal role in addressing global challenges such as climate change, sustainable development, and social equity, acting both as significant contributors to these issues and as key drivers of solutions.

Home to over half the world’s population, a figure expected to rise to nearly 70% by 2050—urban areas are central to achieving the United Nations Sustainable Development Goals (SDGs). For instance, cities account for more than 70% of global CO2 emissions, largely resulting from energy consumption, transportation, and industrial activities.[1]

However, there is significant potential to address these challenges due to cities proximity to the issues and their ability to implement targeted policies and innovative solutions at a local level. Cities are indeed uniquely positioned to lead the way. 

By aligning financial decisions with sustainable and climate goals, cities can deliver far-reaching benefits, including cleaner air, improved public health, economic opportunities, and greater social equity for their citizens. While national efforts often require more time, cities possess the scale, agility, and closeness to the challenges at hand to drive meaningful change, positioning them at the forefront of the transition to a sustainable urban future. 

Four leading European cities—Amsterdam, Barcelona, Bordeaux, and Hamburg—are setting an example by integrating the Sustainable Development Goals (SDGs) and the Green Agenda into their public financial management systems. One thing is clear; the way cities manage their finances today will shape the trajectory of urban life for generations to come. 

Four cities; one mission – Redefining public finances for a sustainable future.

This transformative effort comes under the Sustainable Local Public Finances (SLPF) project, a Technical Support Instrument (TSI) initiative funded by the European Commission, DG REFORM in partnership with KDZ – Centre for Public Administration Research, Expertise France, and I4CE (Institute for Climate Economics).

What is the SLPF Project?

The SLPF project aims to make sustainability considerations an integral part of decision-making processes and public financial management: Specifically, the project focuses on developing the foundations for "SDG & Green Budgeting" in local governance systems.

The approach includes:

  1. Assessing Current Systems: Analyzing the political, legal, and institutional frameworks for SDG/Green Budgeting in the participating cities.
  2. Developing Methods and KPIs: Creating tailored methodologies and Key Performance Indicators (KPIs) to track and integrate SDG targets into city budgets.
  3. Capacity Building: Training city officials and organizing workshops to ensure the practical implementation of SDG & Green Budgeting.
  4. Civil Servants Exchange Program: Organising the exchange between beneficiary cities and other European Cities.
  5. Disseminating Results: Sharing knowledge across Europe through events, guidelines, and tools to inspire more cities to follow.

Why SDG & Green Budgeting Matters

Without aligning financial resources with sustainable goals, efforts to address climate change, social inequality and environmental degradation will remain fragmented, underfunded and ultimately insufficient to achieve. 

As pointed out in the progress report of the UN for the year 2024, just 17% of the SDG objectives are to be met adequately. Nearly half of the targets are making only modest to moderate progress. 

With just six years remaining to the 2030 deadline, current progress falls far short of what is required in order to meet the Sustainable Development Goals.

As cities grapple with mounting environmental and social challenges, the integration of Sustainable Development Goals into local fiscal policies, particularly through innovative approaches like green budgeting, has become an urgent imperative. Green budgeting is emerging at subnational levels as an important tool for regions and cities to align their expenditure and revenues with their green objectives. Ensuring that resources are allocated in line with the SDGs helps prioritise actions that address global and local challenges such as poverty, inequality and climate change. Local governments play an important role in implementing sustainability initiatives, as they are the closest to their citizens and directly influence urban planning, infrastructure and public services. By integrating sustainability into local fiscal policies, governments not only address pressing environmental issues but also enhance democratic processes through increased transparency, citizen engagement, and accountability

Sustainability and climate resilience require systematic changes in how cities allocate and manage financial resources. SDG & Green Budgeting ensures that public finances directly contribute to achieving global goals, such as:

  • Fostering sustainable development
  • Reducing greenhouse gas emissions
  • Promoting climate resilience
  • Ensuring access for adequate, safe and affordable housing
  • Creating equitable and inclusive urban environments

European cities have the opportunity to lead by example, influencing broader governance systems and inspiring action at the national and global levels. 

Collaboration for a Sustainable Future

The SLPF project highlights the power of collaboration in driving sustainable development. With partners like Expertise France, KDZ, and I4CE, along with funding from the European Commission’s Technical Support Instrument (TSI), the initiative provides a robust framework for SDG Budgeting in European cities.

Project Details at a Glance:

  • Duration: 2.5 years (June 2024 - December 2026)
  • Implementing Partners: Expertise France, KDZ, I4CE
  • Contact: Sara Deranja, deranja@kdz.or.atCSPF Website

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Looking Ahead

The four cities, Amsterdam, Barcelona, Bordeaux, and Hamburg will showcase how the SLPF project integrates the SDGs into public financial systems.

With shared learning, innovative tools, and dedicated city governance, the SLPF project aims to inspire cities across Europe—and beyond—to integrate SDGs and the Green Agenda into their financial systems.

For cities, policymakers, and sustainability enthusiasts, this is a call to action:

Let’s make public finances a driving force for a sustainable future.

This project is funded by the European Union via the Technical Support Instrument, and implemented by Expertise France, KDZ-Centre for Public Administration Research and I4C in cooperation with the European Commission. 

[1] World Bank, 2022

Kelmend Zajazi
Kelmend Zajazi | Executive Director of NALAS
The long-term cooperation with KDZ means a lot to us at NALAS. In KDZ we found a peer that fully understands who we are.
Isabelle Verschuren | Federal Public Service Policy and Support (BOSA), CAF correspondent of Belgium
In the last years Belgium has planned and organised many different CAF activities (e.g. CAF training, Certification of CAF label) together with KDZ.
Josep Medrano | Director of Strategic Planning and Taxation, City of Barcelona
For the City of Barcelona, the collaboration with KDZ through the European "Cities for Sustainable Public Finances (CSPF)" has reached a qualitative advance.

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