Public Finances & State Owned Enterprises (SOEs) For Greening Development
Implementing a whole-of-public-sector approach to deliver greater prosperity and sustainable development through the design and implementation of better expenditure, regulatory, and taxation policies and practices.
Why Greening Development?
Advancing climate action and achieving green growth — what we refer to as 'greening development' — are global priorities that require tailored interventions and holistic approaches.
Green growth enables economic development that is resource efficient, low-carbon, and socially inclusive. Investing in clean energy, resilient infrastructure, and sustainable land use can reduce greenhouse gas emissions, boost local competitiveness, and generate new economic opportunities.
At the same time, effective climate action safeguards long-term economic productivity by minimising the risks and costs of climate-related shocks.
Why a whole-of-government approach?
Tackling greening development challenges and unlocking opportunities for green growth and climate action requires individual countries to design and implement policies that align with their unique development contexts.
Beyond central government, sub-national authorities and state-owned enterprises (SOEs) also need to be engaged. Their participation is essential for scaling climate action from policy design through to on-the-ground implementation.
Three factors are critical for success: country demand and ownership; strong organisational capabilities and skilled public sector staff; and modernised, digital information systems — harnessing innovations like big data and artificial intelligence.
The Vienna Development Knowledge Centre (VDKC) also promotes awareness, application, and the adoption of online decision-support tools for better climate actions. Operational tools such as the Geospatial Planning and Budgeting Platform (GPBP) — which can be found on pim-pam.net — can help countries maximise opportunities through user-friendly, openly disseminated methods and tools.
Explore ToolsThe Vienna Development Knowledge Centre Public Finance and SOEs Engagement Framework
The VDKC Public Finance and SOEs Engagement Framework applies the whole-of-government approach to achieving country-level results for greening development. It offers a structure and pathway for governments and development practitioners to translate policy into action.
Legislative & Regulatory Alignment
Supporting countries to design and implement legislation, regulations, and expenditure policies that drive greening development outcomes at national and sub-national levels.
Institutional Capacity Building
Strengthening the capabilities of national, sub-national, and SOE institutions through targeted skills development, organisational reform, and peer-learning networks.
Digital Systems & Innovation
Modernising information management systems and harnessing big data, AI, and digital tools to support better climate planning, investment budgeting, and results reporting.
Results & Implementation
Accelerating implementation and tracking progress against country-level greening development targets, with structured monitoring frameworks aligned to climate action goals.
How does it work?
The foundational departure point of the VDKC Engagement Framework is that national, sub-national, and SOE institutional sectors are all critical to delivering on greening development across the ECA region.
The outcome framework builds on the premise that a combination of taxation, expenditure, and regulatory measures can help deliver climate action and green growth objectives. The public sector depends on adequate policies, but above all the capabilities to deliver on those policies.
Results Framework
Public infrastructure investment and non-financial asset governance are critical in green transition trajectories.
Infrastructure investment decisions carry long-term implications. Failing to account for climate risk in planning and budgeting cycles leads to stranded assets, increased fiscal exposure, and missed opportunities for sustainable development.
The VDKC approach integrates people, processes, and technology to embed climate considerations into public investment management — from project appraisal through to asset lifecycle management and performance reporting.
State-owned enterprises (SOEs) play a critical role in mitigating climate change and advancing green economies due to their scale, strategic sectors, and public mandates.
Operating in key areas like energy, transport, and water, SOEs control significant emissions and infrastructure investments, positioning them as essential drivers of sustainable economic transformation — provided they have the right governance structures, incentives, and capabilities in place.
The VDKC activity has special emphasis on building SOE Community of Practice in Report 2025 for the European Europe and Central Asia (ECA) region to better address the challenges and opportunities.