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The challenge: How can international co-operation help to put sustainable development at the core of business models?

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Role of the private sector in Agenda 2030By helping to create decent jobs and build resilient infrastructure, the private sector can be a key partner in achieving the Sustainable Development Goals. UNDP photo

The private sector has always been an essential actor in development, credited with fostering wealth, innovation and jobs – and many a time blamed for negative externalities. So in this new era, what is different about the role and the responsibilities of the private sector in achieving the Sustainable Development Goals (SDGs)?

It is different because sustainable development cannot be achieved without the active involvement of responsible businesses. The private sector will be essential in creating sustainable, productive and decent employment, economic prosperity, resilient infrastructure that underpins sustainable development, and innovations that create green growth and opportunities for all, especially the poor.

Also, it is different because the business community has been involved from the beginning in defining the new agenda for sustainable development. Their voice was heard loud and clear. A recent study reveals that 71% of businesses say they are already planning how they will engage with the SDGs and 41% say they will embed the SDGs in their strategies within five years (PwC, 2015). So they are part owners of the new framework for development.

Finally, it is different because the drivers of change within the business community are evolving. Of course, there is the moral case, which Pope Francis (2015) so persuasively put forward in his Laudato  Si’ encyclical in May 2015: respect for universal principles of human rights, dignified work, the environment and good governance. But there is also a strong business case for the SDGs. Investing in sustainable development is not charity; it is smart investment. Business thrives when the people thrive and our earth is protected for future investments.

The 17 SDGs represent a pipeline of opportunities for responsible business that will mobilise trillions in investment opportunities for “people and planet”. With the right incentives, policies, regulations and monitoring, great opportunities abound for responsible businesses to make profits while at the same time protecting the environment, promoting equality and lifting people out of poverty.

It is worth noting that the business community is already transitioning from the old “do-no-harm” agenda to a drive to “do good” for people, the planet, prosperity and peace, aligning with the 2030 Agenda (SDG 16). This is where business can make the most relevant contribution to the SDGs: by transforming their strategies, procedures, standards and metrics to integrate sustainable development within the core of their missions and business models.

For this transformation to take place, however, we need to overcome a number of core challenges.

First, the challenge of scaling up. Progressive businesses are already demonstrating that companies that introduce sustainability into their business models are profitable and successful. Shareholders and consumers want and value sustainable development. But, we need to get to a tipping point where sustainability becomes “business as usual” in all markets around the globe.

Second, we need enabling regulatory frameworks to incentivise and unlock private investments for sustainable development. This is a responsibility of governments and the 2030 Agenda serves as a useful reference for their actions.

Third, global change must be built from the bottom up. Companies engage with people – workers, unions, consumers, suppliers – at the local and country levels; this is where they interact with institutions and with natural resources. It is at the local and national levels where stakeholders have the space for aligning private action with public policies, and for ensuring people are at the centre. These transformations must begin at this level if we are to sustain the gains. We need to ensure that businesses treat all workers fairly and equitably while striving to improve and incorporate technology; collaborate with and empower micro, small and medium enterprises, small agricultural producers and the informal sector – especially women.

Fourth, we need to put in place mechanisms that will ensure credibility, accountability and transparency. We need international standards for reporting that set up clear, balanced and coherent rules and incentives. Businesses will need to align their key performance indicators with sustainable development outcomes. Their social and environmental impact will need to be included in their staff’s performance evaluations.

 Finally, we need a new generation of young and experienced multi-stakeholder partnerships at all levels, going far beyond the traditional public-private partnerships. We need partnerships that are principled, accountable, people and planet-centred. Integrating social values, economic empowerment and environmental stewardship that is truly universal will be key to achieving the global goals for sustainable development.

These are the challenges I believe we can overcome. We have an amazing road map to address them. Let’s take action and get to work!

This article is one in a series of opinion pieces written by prominent authors on issues covered in the OECD Development Co-operation Report 2016: The Sustainable Development Goals as Business Opportunities.

Guest Post Private sector Private sector Sustainable Development Goals Inclusive growth Sustainable development Blog post blog series UNDP-OECD series on SDGs