Business’ leadership for a more stable, sustainable world

Rebuilding trust to achieve the Goals, rebuilding trust by the Goals

It’s been two years since the course was set to a better world via the Paris agreement, the establishment of the Sustainable Development Goals (SDGs) and the Financing for Development conference in Addis Ababa. Taken together, these three conferences and agreements represent a much-needed holistic paradigm shift, a fundamental change in the way we approach the task of creating a better world. The global movement started a journey, or better said a next journey, since that actually already started with the Millennium Goals. And the beginning of this journey resulted in many public and UN initiatives. But there has been an enormous movement throughout the business world as well, resulting in many sectoral, national and international coalitions, as well as ambitions, objectives and plans to achieve the Goals and put a hold on climate change. Assessments and measurement tools have also been put into place to get a clear picture of where we are now and what still needs to be achieved.

While this movement is getting into gear and we are moving closer to Cop23 this November, we are all very aware that, at the same time, the world is experiencing gigantic risks on multiple levels and they are only growing in both numbers and impact.

Exponential growth of risks and costs of natural disasters

We are being faced with the impact of climate change in a dramatic way. We are experiencing hurricanes, floods, droughts, and storms like we have never seen before with enormous consequences for people, planet and economy. Consider that in the previous decade the world’s economy suffered an estimated loss of 2.7 trillion dollars because of natural disasters. This decade will no doubt show an exponential increase, and inaction on climate change comes with the huge comprehensive cost of 24 trillion dollars. Efforts to slow the pace of climate change so far have had insufficient impact whilst at best, we have 1,000 days to turn the tide. At the same time, inequalities among people across the world are growing instead of diminishing and this result in dangerous divides, conflicts and social unrest. And despite the fact we have been able to lift millions of people out of poverty, half of the world’s population is still living on less than 2 dollars a day and 800 million people still go to bed hungry every day. Thirty percent of the world’s 1.8 billion young people are neither employed nor in school or training programs; and over 57 million children of primary school age are not in school. Progress on gender equality also still lags far behind, and women continue to face significant economic, social and even legal barriers to equality.

Building trust for a better world

To add to the risks, we live in what we could define as a vacuum in political leadership and short term orientated political systems. The ‘social contract’ between politics, government and society as a whole is becoming increasingly damaged and connections that need to be more tight than ever, are actually loose of even lacking. This is a huge threat to long term planning and overall coherency between all parties in society and most of all, it damages trust immensely. Trust however is something we need desperately. But trust has never been so low and the lack of trust has never been so broad, related to politics, government and other institutions, and business. Much of the current public disillusionment is closely tied to the impact of the global economic crisis, the vacuum in political leadership, and the effects of pervasive corruption. Even within companies trust in leadership is low.

With only little over twelve years to go to meet the Global Goals by 2030, which is crucial to maintain - or better said create - a stable and fair world, the time is running out. To accelerate our actions to achieve the Goals, we need trust and that trust will grow when we achieve the Goals. Both are interdependent: accelerating for the achievement of the Goals means building trust and vice versa. It is not a coincidence that goal 17 is about the partnerships for the Goals.

Public private partnership for the Goals

It is increasingly clear that the way forward is one that must be paved by both business and government, but definitely not by government alone. And this is not a matter of trust, but a matter of roles and numbers. For one thing, governments lack the necessary means to bring about the level of change that is needed. We need to consider that ‘the power of business’ has grown tremendously and should be leveraged to grow a stable, sustainable global economy and society. Consider that business corporations account for 50 of the largest economies, operating throughout the entire planet. And consider the investment potential of private capital which is a much larger percentage than public investment potential by now, for instance the percentage of total capital flows of donor countries’ ODAs into emerging markets has decreased from over 50% to less than 10%, while private capital flows have increased and grown. And last but not least, consider the power of business needed to safeguard consistency in policy, as we are all aware that business was crucial to achieving the Climate Agreement and the Sustainable Development Goals and is equally important to maintaining them. So governments need business like never before.

Equally, business needs government: the right frameworks, and tax systems, internalizing external costs are necessary for a system-wide change. Business needs good government to set these frameworks of taxes and regulations, to open up markets, create ‘real and fair’ business cases and thus to scale up solutions. Imagine that pricing externalities for food waste prevention alone adds no less than 92 percent to the value of business solutions addressing food waste.

Business must and can step up like never before

But, for business, there is another risk. The risk of business becoming too proud of itself for being part of the solution rather than the problem, while in fact business is not growing these solutions at the speed it needs to and the scale it must. If they are to really contribute to the achievement of climate action, our Goals, and the new meaning of capital, business must accelerate and scale up the solutions. A 2017 Global Scan Sustainability Survey, titled Evaluating Progress Towards the Sustainable Development Goals, found that while corporate respondents say their business is responding to the SDGs by developing products or services that will provide solutions, and nearly all report that they are currently contributing or planning to contribute to the SDGs, all respondents agree that society’s progress on sustainable development and the SDGs has been poor thus far. Although more than 75 per cent of the companies that took part in the survey have already started addressing the Global Goals, it also raises the question of exactly how companies are integrating the Global Goals into their business strategies, since only a few companies are actually measuring the societal impact of their work with the Ten Principles and the Global Goals, as was set up by the UN.

The new meaning of –re-purposed- business

Let’s engage business in a new meaning. Business that put the Goals in the heart of their companies, since they know that they serve both their own interests and those of the world by doing this. The business case for business for good has been demonstrated enough. Consider even the higher impact of business on society: de-risk the political process and give political leaders the full backing to reform policy for the better. Engage in public-private initiatives, like the Open Government Partnership (OGP), for example, that aims to secure concrete commitments from governments to promote transparency, empower citizens, fight corruption, and harness new technologies to strengthen governance. Engaging is definitely beneficial for both business and government and crucial for a wider system change creating new markets, built on sustainable principles, and thus building trust.

So business can and must be a key participator in achieving the Global Goals, and in the rebuilding of trust throughout the world: by demonstrating trust, by giving trust, and by deserving trust. The SDGs bring business the huge gift of learning to be much more holistic and think at a much broader system level, which is key to being successful in the multi-stakeholder era we are in now. And which is key to rebuilding trust.

The trillion Dollar Shift

This article contains fragments of Marga Hoek’s new book The Trillion Dollar Shift; Achieving the Sustainable Development Goals, Business for Good is Good Business, published by Routledge, the world’s leading academic publisher in the Humanities and Social Sciences. The book shows how business and capital can have a positive impact on the SDGs, presenting examples of companies all over the world that are creating shared value and designing their business strategies to benefit people, planet and profit. The book will be launched during the World Economic Annual Conference week in Davos, on January 23-26, 2018 and will be digital as well as a hardcover book.

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