The business imperative for engaging the Sustainable Development Goals

Kindly hosted at Ster Kinekor’s offices in Johannesburg, on 7 February

and Johnson & Johnson’s offices in Cape Town, on 9 February 2017

The 2030 Agenda for Sustainable Development, with its 17 Sustainable Development Goals (SDG) came into effect on 1 January 2016, aiming to end poverty, protect the planet and ensure prosperity for all people. Trialogue’s first CSI forum of 2017 explored the interconnectedness of the SDGs, drawing comparisons with national and continental development agendas, and discussed how the SDGs have and are expected to impact corporate responsibility and broader business strategies.

PEOPLE, THE PLANET AND PROSPERITY FOR ALL: THE 17 INTERCONNECTED GOALS

Amidst a seeming international shift towards more nationalist politics and rhetoric, the SDGs place renewed emphasis on our global interconnectedness and the need to develop together.

The SDGs are inextricably linked and cross-cutting. For example, gender equality does not only fall within Goal 5. The specific empowerment of girls and women are prioritised across other Goals, recognising the important role that women play in sustainable development within their families and communities.

As with other development agendas, The 2030 Agenda for Sustainable Development acknowledges business as a key partner in development, for its more obvious role in job creation and economic growth, but also for its potential in terms of financing, innovation and networks that can be leveraged in order to make transformative and lasting change in society.

THE SDGS BUILD ON, AND TAKE FURTHER, THE AMBITIONS OF THE MILLENNIUM DEVELOPMENT GOALS (MDG)

  • Globally, over 1 billion people were lifted out of extreme poverty. In 1990, nearly half of the population in the ‘developing’ world lived on less than USD $1.25; dropping to just 14% in 2015.
  • The primary school net enrolment rate in the developing regions reached 91% in 2015, up from 83% in 2000.
  • The global under-five mortality rate declined by more than half, and the maternal mortality rate by 45%
  • New HIV infections fell by approximately 40% between 2000 and 2013, from an estimated 3.5 million cases to 2.1 million.

However, overall, South Africa and other ‘developing’ countries lagged behind in their achievement of the MDGs, with many targets missed. The most progress was made within:

  • Goal 1: South Africa’s extensive social security grant system contributed towards decreasing extreme poverty and hunger and public works programmes provided skills and jobs.
  • Goal 2: South Africa introduced compulsory primary education for those aged seven to 15 years.
  • Goal 6: Some success was achieved in the fight against HIV/Aids, with 98 000 fewer new infections recorded in 2013 than in 2010.

The MDGs helped to centralise strategies and uncover areas that needed greater attention for sustained development. The MDGs were also an important tool for holding people and organisations to account, and underscored the need for more effective monitoring and evaluation processes.

The SDGs are more cognisant of the disparity between ‘developed’ and ‘developing’ countries, and recognise the role that ‘developed’ countries have to play in ensuring global equity.

ALIGNMENT BETWEEN LOCAL AND GLOBAL DEVELOPMENT AGENDAS

Identifying areas of overlap and convergence between development agendas can contribute to more effective implementation.

The National Development Plan (NDP) makes a firm commitment to achieving a minimum standard of living which can be progressively realised through a multi-pronged strategy. It does not define, but provides a framework for the adoption of a minimum standard of living by society (i.e. the key capabilities that individuals need to live the life that they desire).

Like the SDGs, the NDP emphasises inclusive and cohesive economic growth. NDP targets and SDGs are similarly interdependent and share an end date of 2030.

The SDGs do a better job of prioritising some key issues impacting development, such as the need for gender equality and cross-sector partnerships. This is not to say that the NDP does not make mention of these in its individual targets, but globally they have been better articulated.

The Agenda 2063: The Africa We Want is the African Union’s 50-year development framework, formulated in 2013. This continental agenda places significant focus on the eradication of poverty and good governance for political and economic security. Its ideals are further translated into 10-year implementation plans with set goals and targets.

BUSINESS STRATEGIES FOR ENGAGING THE SDGS

“The business imperative for engaging in the SDGs is based both on the value to the business and the value of the business.”

From Business and the United Nations Working Together

Towards the Sustainable Development Goals: A Framework for Action

As part of Trialogue’s 2016 CSI research, companies were asked how the SDGs would impact their CSI strategies:

  • Almost half of the companies and NPOs indicated that their strategies already responded to the SDGs, and did not need to be adapted. Around a third of companies planned to use the SDGs to adjust their strategies now, or in the future.

We also asked companies which of the SDGs their programmes were most closely aligned with:

  • SDG 4 (quality education) was most aligned to corporate and NPO programmes. This is in line with research finding that the majority of companies and NPOs support education programmes.
  • The least aligned SDGs were those relating to the environment, but this may be because environmental priorities sit within a separate division of the company, and the link between ‘people’ and ‘the planet’ has not been clearly made within CSI strategies.

BUILDING THE BUSINESS CASE

  • The long-term sustainability of a business is inextricably linked to the socioeconomic health of the society in which it operates.
  • Through active corporate participation in the implementation of the SDGs, businesses will begin to be viewed as agents for positive change and not solely as profit generators.
  • If communicated effectively, adopting the SDGs can enhance a company’s reputation and help to attract and retain employees, customers, investors and secure social licence to operate.
  • Companies should focus on fewer SDGs that are more closely aligned with their core business, rather than trying to address too many SDGs that they don’t necessarily have expertise in.
  • Thinking creatively about how to engage the SDGs can inspire innovation and even unlock new business opportunities.

Better Business, Better World – A report by The Business and Sustainable Development Commission

The Better Business, Better World report, released in mid-January 2017 by the Business and Sustainable Development Commission, said pressure on business to become a “responsible social actor” was likely to grow, and that companies could unlock at least $12 trillion in market opportunities by 2030 and create up to 380 million jobs through action in just four areas – energy, cities, agriculture and health.

The Commission was launched at the Davos 2016 World Economic Forum to encourage businesses to take the lead in poverty reduction and sustainable development. Members include the chief executives of multinational firms such as Edelman, Pearson, Investec, Merck, Safaricom, Abraaj, Alibaba and Aviva, alongside academics, environmentalists, trade union leaders and philanthropists.

Six actions recommended by The Business and Sustainable Development Commission

  1. Build support for the SDGs, both internally and across your company networks.

The more business leaders who understand the business case for the Goals, the faster progress will be towards better business in a better world.

  1. Incorporate the SDGs into your company strategy.

Apply a global lens to every aspect of your company strategy:

  • appoint board members and senior executives to prioritise and drive execution;
  • market products and services that inspire consumers to make sustainable choices
  • use the goals to guide leadership development
  • ensure women’s empowerment at every level
  1. Drive the transformation to sustainable markets with sector peers.

Whole sectors need to come together, rather than individual companies, to unlock much bigger business opportunities.

  1. Work with policy-makers to pay the true cost of natural and human resources.

Disrupting ‘business as usual’, the whole sector has to move. This means shaping new opportunities and renewing businesses’ licence to operate.

  1. Push for a financial system oriented towards longer-term sustainable investment.

Achieving the Goals will likely require an estimated US$2.4 trillion a year of additional investment, especially for infrastructure and other projects with long payback periods. There is enough capital available. But in the world’s uncertain circumstances, most investors are looking for liquidity and short-term gains. The long-term gains will take time. Until then – and to help bring that day closer – business leaders can strengthen the flow of capital into sustainable investments by pushing for three things: transparent and consistent league tables of sustainability performance linked to the Goals; wider and more efficient use of blended finance instruments to share risk and attract much more private finance into sustainable infrastructure; and alignment of regulatory reforms in the financial sector with long-term sustainable investment.

  1. Rebuild the Social Contract

Trust in business has sharply eroded since the global financial crisis, the social fabric is wearing thin. Many see business as reneging on its social contract. Business leaders can regain society’s trust and secure their licence to operate by working with governments, consumers, workers and civil society to achieve the whole range of Goals, and adopting responsible, open policy advocacy. Rebuilding the social contract requires businesses to pay their taxes transparently and to contribute positively to the communities in which they operate. In total, there are over 700 million workers employed directly and indirectly in global supply chains. Treating them with respect and paying them a decent wage would go a long way to building a more inclusive society and expanding consumer markets. Investing in their training and enabling men and women to fulfil their potential would deliver further returns through higher labour productivity. Ensuring that the social contract extends from the formal into the informal sector, through full implementation of the UN’s Guiding Principles on Human Rights, should be non-negotiable.

Real leadership from the top is needed, to inspire purpose and commitment among everyone in your business and to transform the markets in which you all operate together.

DISCUSSION POINTS

  • While most companies have not yet mapped their CSI programmes against the SDGs, Eskom, Rand Water and Johnson & Johnson are examples of companies that have.
  • There was concern that large companies have resources and capacity that smaller companies do not have, to conduct mapping and alignment exercises with development agendas such as the NDP and SDGs. As far as possible, the mapping to SDGs – and other frameworks – should be built into existing strategy and planning processes, rather than conducted as a separate exercise.
  • Companies should not try to address all the SDGs, but should rather focus on those most closely aligned to their core business.
  • The National Development Agency emphasised the need for the private sector to work with government when aligning CSI strategies with the SDGs. There is a government representative in each province, responsible for implementation of the SDGs and Statistics South Africa has developed indicators that companies can leverage, to track progress against the SDGs.
  • Companies can also participate in collective initiatives for addressing SDGs, such as those being run by the National Business Initiative.

 

2017-12-04T18:38:01+00:00 February 20th, 2017|CSI, CSI Forums|