As the world embraces the sustainable development goals (SDGs), we have embarked on a decisive journey to tackle some of the world’s most pressing challenges, which serve as the basis for these new 17 development goals. A unique component of the recently adopted 2030 Agenda for Sustainable Development is the call for innovative partnerships. This requires a re-examination of business as usual, especially within the UN. The notion that everyone has a role to play in meeting these complex development challenges strengthens the case for designing programmes that reflect new actors’ capacities, including those in the private sector.
The growing emphasis on the role of business adds credence to what seems to be the changing face of development. From now on, programming and investment will depend on more than official development assistance. They will also require public-private cooperation to provide solutions to environmental, social and ethical challenges, and to move towards a more integrated approach to development. Unlike the millennium development goals (MDGs), the new SDGs comprise a much broader sustainability agenda and call for a more universal and comprehensive development framework. Tackling extreme poverty and inequality is no easy business: it not only requires innovative public-private partnerships, but active listening from the different sides.
Multi-stakeholder collaboration, an imperative for action
A good example of how tackling this challenge is the SDG fund a multi-donor and inter-agency UN mechanism, established in 2014 by UN development programme (UNDP) on behalf of the UN System, to build multi-stakeholder programs by aligning the efforts of governments, UN agencies, civil society and business on the ground. This is precisely the type of partnership the 2030 agenda calls for.
For the SDG fund, national and international partners, including the private sector provide more than 56% of current resources. Furthermore, there has been much progress in involving business in all of the programmes in the field. At the same time, large companies and SMEs have become an integral part of the dialogue for example in Honduras, the SDG fund is working with local companies to develop a unique cultural tourism initiative to promote inclusive economic opportunities for youth and women.
To better harness the expertise and potential of the private sector, together with other development actors, it is necessary to learn more about companies’ perspectives on engaging in designing development initiatives. When companies are invited into this process, it is often done after priorities and projects have already been identified. In many cases, it is for the express purpose of providing resources or financing existing projects. The actors often lack a clear understanding of shared objectives at the start of the process.
With this in mind, the SDG fund along with Harvard’s Kennedy school and Business Fights Poverty set out to examine these issues. Their findings have been included in a new Business and the United Nations report.
The report offers insights and a framework for action that showcases what business can do to support the new SDGs. This framework can be used as a tool for aligning expectations and resources to design and implement initiatives that best leverage companies’ comparative advantages. The report found that attention is shifting towards the positive impacts that business can have through core business innovations, strategic philanthropy programmes and engagement in policy advocacy. For example, engaging business early on to co-create ideas or supporting ideas initiated by companies can be very effective and needs to be done earlier in the innovation process; early engagement also helps to build mutual trust. We believe this report and framework will help the UN and other development actors to be better informed about engaging businesses as partners in development.
While the report encourages the continuation of traditional activities that can have a direct impact on the SDGs such as social investment, philanthropic activities, cash and in-kind contributions etc, it is the importance of the private sector’s role through its core activities – the provision of goods and services, job creation, investment in key areas of sustainable development, innovation and tax revenues – that is the key message of the report.
But more critical and enlightening are the report’s recommendations about how the private sector can harness enterprise and innovations – the bread and butter of everyday business – to engage developing markets in core business activities. This can include: creating new market opportunities for local suppliers (especially micro, small and medium enterprises); developing business models promoting access to affordable goods and services; driving up internet connectivity; improving productivity of smallholder farmers and more.
Inclusive business, a call to action
While not yet widely known, this concept of inclusive business is not new in the business landscape. In fact, UNDP supports private sector engagement in development in a variety of ways, in addition to the SDG Fund, initiatives like the Business Call to Action (BCtA) have been supporting inclusive business models for years. In fact, BCtA’s platform now boasts more than 135 member companies and has become a leader in showcasing the critical role that core business can play in innovation.
BCtA members have shown that by adopting sustainable and inclusive business models, companies can: enhance their impact; widen opportunities for including low-income people in the value chain as suppliers, customers and employees; promote sustainability; and generate profits, which is a key driver for business. One example is Bata Bangladesh, the local company of the family-owned global footwear and accessories manufacturer and retailer Bata Shoe Organization. Their Rural Sales Programme has grown from 49 women selling only Bata flip flops at $1 (67p) in one region, to more than 2,200 women across 54 hubs in 28 rural districts and reaching 375,000 households selling, toiletries, apparel and medicine in addition to footwear.
Other initiatives include, H&M’s Skills Development Centre of Excellence, which educates workers, offers vocational training and provides certificates that increase industry workers’ productivity and long-term employability. The company also works closely with a variety of UN agencies to support the new SDGs and address issues within its supply chain.
But inclusive business is not solely the purview of large multinationals. Small and medium multinational and national companies comprise 54% of BCtA’s members. They work in sectors ranging from agriculture to energy and from financial services to housing. Most importantly they are realising tangible, bottom-line benefits from their inclusive business. In 2015 alone, new members committed to increasing crop yields for more than 5.4 million people, improving healthcare outcomes for 5.9 million people and enhancing living conditions for 1.2 million families.
The advantages of inclusive business are tangible. For companies, they include driving innovation, building markets, strengthening supply chains, uncovering new sources of profitability and enhancing long-term competitiveness. For poor communities, they include higher productivity, sustainable earnings and greater empowerment.
2015-2030: the road ahead
Clearly, it is important to understand the value of inclusive business in order to achieve the global development goals and give a voice to business. It’s also encouraging to see that emerging UN entities like the SDG fund are also supporting sustainable development activities through integrated programmes that focus on inclusive growth and include the private sector in their design and implementation. As the first developmental cooperation mechanism working towards the SDGs, the SDG fund is already present in 21 countries and is eager to devise more effective multi-stakeholder partnerships and harness the critical role of business in driving sustainable development.
The SDG fund and other UN development partners are also listening to the needs of the private sector and engaging businesses in efforts that build on their core business strengths, complementary expertise and experience with overcoming constraints. This new report is only one of many steps in this much needed dialogue.
Content on this page is paid for and provided by Business Call to Action, sponsor of the role of business in development hub
