The private sector and the Sustainable Development Goals
This weekend the UN General Assembly will ratify the adoption of the 17 Sustainable Development Goals (SDGs) that will represent the objectives of the international community for the next fifteen years. With the Millennium Development Goals (MDGs) expired, and development challenges still a reality, this agenda required changes in the structure and mindset. One such change is a much greater visibility of the role played by the private sector - but how can business, with its incentives aligned around profit, meaningfully contribute to development?
The last fifteen years of MDGs implementation have primarily been based on government-led initiatives, with business involvement limited to an ad hoc basis. For a number of reasons, a structured framework for engagement of the private sector with the MDGs had never been on offer.
Nevertheless, times have changed and awareness regarding the potential role and contribution of the private sector in addressing some of global challenges we face and the achievement of development objectives has significantly evolved.
Importantly, the whole discourse around the role of private sector is not solely centred on financing and investment. As highlighted in the outcome of the First High-Level Meeting of the Global Partnership for Effective Development Co-operation held in Mexico (PDF) last year, the resources and the expertise of all the stakeholders are needed in order to tackle global, multilevel and cross-sectoral problems.
In particular after the Rio+20 United Nations Conference on Sustainable Development, the call for the creation of a framework that would be able to guide and facilitate an enhanced business involvement has grown. Experts, business organisations, prime ministers and representatives of multilateral institutions have increasingly expressed the necessity of reshaping the role of business.
There remains a reasonable scepticism regarding the effective opportunity of involving and engaging commercially-minded actors in the development cooperation system.
Recently, in their article for the IDS Bulletin ‘Business, State and Society: Changing Perspectives, Roles and Approaches’, Richard Jolly and Carlos Fortin explored the evolution of the UN engagement with businesses and the related implications and explained that worries relate to “the possible instrumentation of the relationship to gain public legitimacy or as a vehicle for business to influence United Nations policies and actions”.
The Sustainable Development Goals represent a great opportunity for the development community to engage strategically with the private sector
While the SDGs are being discussed in New York this week, the United Nations Private Sector Forum 2015 will be discussing the role of the private sector in implementing the SDGs in an attempt “to increase understanding of efforts underway by the private sector and civil society, and provide a platform for the private sector to announce long-term goals and partnerships that will make an important contribution towards achieving sustainable development for all.”
Hence, the SDGs have come to represent a great opportunity for the development community to engage strategically with the private sector. Although agreements at a global level are inherently complicated and cannot adequately address specific issues like this, the SDGs declaration serves (among others) as the context where countries and business can agree to a set of rules and values for an enhanced cooperation system.
The question, therefore, is not whether or not business should engage, it is rather how can business drive sustainable development?
A quick reading of the document, which will be ratified this weekend, reveals that when the SDGs address sectors which are clearly within the business arena and where companies can provide a significant contribution, they distinguish between three highly interrelated dimensions:
Goals 8, 9 and 12, which deal with economic growth, employment, industrialization, innovation, and production and consumption patterns, underline the importance of inclusive and sustainable approaches, encouraging their application.
Inclusiveness means that business can directly benefit the poor, addressing them and the problems they face in the different contexts. Companies can involve local poor in business processes as producers, consumers and even owners, offering, for example, income opportunities or providing necessary goods and services. Beyond benefitting local communities, it is argued and demonstrated that such an approach also makes business sense. The UNDP Growing Inclusive Markets Initiative lists a number of strategies and case studies regarding the effectiveness of this approach.
Furthermore, during the past decade, companies have been increasingly encouraged to place responsible practices and sustainability objectives at the heart of their strategies in order to better align their efforts with the broad global development agenda.
Central to a more effective engagement of the private sector is a new orientation articulated by the UN Global Compact and the World Business Council SD in the concept of ‘corporate sustainability’ and defined as “a values- and principles-based management and operational approach to corporate management, strategy and culture”. Significantly, the number of firms participating in the UN Global Compact has grown steadily, exceeding 8,000 now.
This is business re-tooled for being up to the challenges of the 21st century, requiring the realization of a number of changes not only internal, but also systemic.
A crucial means for supporting change, but also an end in itself is cooperation. The last goal of the SDGs provides for the revitalization of “the global partnership for sustainable development”, recognizing that complex challenges require integrated responses, picking resources and know-how from all the stakeholders. For example, the Global Alliance for Improved Nutrition (GAIN), a multi-partner initiative of governments, civil society, private sector and multilateral agencies to reduce malnutrition is an original and effective experience.
In conclusion, it is clear that global challenges require global efforts. The SDGs have opened new opportunities for businesses to shift in the achievement of development goals. They also offer a unique opportunity for development actors to be strategic about their collaboration with the private sector and to demand everything that they expect from the private sector.
If done properly, in particular in the implementation phase, businesses can become real levers of change, while also maintaining their profitability.
Image credit: Global Goals