The corporate sustainability movement is growing in every region of the world. Every year, more companies place responsible business practices and sustainability objectives at the heart of their business strategy. Companies are increasingly helping to tackle the world’s most pressing problems through their core businesses, and realising benefits and opportunities from doing so. There is a growing recognition that, “in a globalised world, general prosperity can only be built if business enterprises are involved in finding solutions to low living standards and environmental degradation”.
An historic opportunity
With the targets of the Millennium Development Goals (MDGs) set to expire in 2015, a new global sustainable development framework is under construction, which is expected to define priorities and approaches for the next era. UN Member States are currently working on a set of potential Sustainable Development Goals (SDGs), to be adopted in 2015.
This post-2015 development agenda presents an historic opportunity for the international community to mobilise companies to more effectively advance global priorities. Now is an opportune time for the international business community to elevate their missions and strategies to align with the post-2015 vision, producing outcomes that benefit the global society and economy – and drive business success.
The United Nations Global Compact has been asked to bring private sector perspectives and action to this agenda, creating the opportunity to scale up and align business contributions to United Nations priorities. “The overlap between public and private interest in sustainable development is increasingly clear, and the development of the post-2015 agenda will require an unprecedented level of interplay between business, governments, civil society and other key stakeholders”.
The process officially began in Rio de Janeiro in June 2012, as Governments at the UN Conference on Sustainable Development (Rio+20) agreed to negotiate a set of SDGs, to be synchronized with the post-2015 development agenda proposed by the UN Secretary-General. The parallel Rio+20 Corporate Sustainability Forum(1), organised by the UN Global Compact and key partners, brought together nearly 3,000 representatives from business, the investment community, UN, civil society and academia. Following the announcement of 200 corporate commitments to action and 120 sessions under the theme, “Innovation and Collaboration for the Future We Want”, business executives at the Forum indicated their desire to work with governments in setting goals and targets – seeing the SDGs as a driving force to move sustainability ahead.
Sustainable businesses have a built-in motivation to see development succeed
Following Rio+20, the UN Secretary-General asked the UN Global Compact to gather input and perspectives from the private sector(2) on the post-2015 agenda. A globe-spanning series of consultations, surveys and focused discussions were held, and roughly 1,000 companies committed to responsibility and sustainability provided their views on global development priorities they consider central to any future development agenda.
Figure 1 illustrates the recommended Sustainable Development Goals proposed by business.
Figure 1. Sustainable Development Goals Proposed by Business
The results of these consultations reflect a growing convergence between the priorities of the United Nations and those of the international business community on an ever-widening range of global issues and challenges:
- Inclusive Growth: Ending extreme poverty and a strong start on extending prosperity to the majority of the world’s people are now achievable. The hallmarks of the post-2015 agenda should be sustained economic growth that is inclusive and equitable; more and better jobs; and access to credit and entrepreneurship opportunities, especially among the poor.
- Human Needs and Capacities: Progress and unmet challenges in the core MDG areas of education, health and advances in the standing of women and girls need to continue past 2015 – all closely related to poverty and its eradication.
- Environment and Natural Resources: The resource triad of water and sanitation, energy and climate, and agriculture and food bring together the three pillars of sustainable development. Each meets basic human needs, has the capacity to power sustainable economic growth and is directly related to climate change.
- Enabling Environment: Good governance and respect for human rights, settings of peace and stability, and modern and green digital and physical infrastructure are enabling factors important enough to be elevated to worldwide goals.
Engaging businesses in sustainable development
Following the consultations on global development priorities identified by businesses, executives at the UN Global Compact Leaders Summit 2013(3) endorsed an architecture for engagement unveiled by the UN Secretary-General. The Post-2015 Business Engagement Architecture(4), in Figure 2, illustrates the main building blocks necessary to enhance corporate sustainability as an effective contribution to sustainable development, creating value for both business and society:
- Corporate Sustainability: Central to the Architecture is a new corporate sustainability philosophy and orientation rooted in three dimensions – i) respecting universal principles; ii) taking action to support broader UN goals; and iii) engaging in partnerships and collective action at the global and local levels.
- Sustainable Development Goals and Long-term Business Goals: Businesses contribute to the advancement of sustainable development goals by implementing corporate sustainability strategies that advance inclusive economic growth, social equity and progress, and environmental protection. Those same strategies and practices are increasingly understood to contribute to revenue growth, resource productivity and the mitigation of operational, legal and reputational risks.
- Transparency and Accountability: Building on more than a decade of experience of engaging business around UN priorities, it is clear that the Architecture must incorporate a set of robust accountability measures in order to make business commitments transparent and to ensure that progress towards them is real.
- Platforms for Action and Partnership: An especially promising component of the Architecture is the Platforms for Action and Partnership, which can help optimise and scale up corporate sustainability efforts as well as contribute to corporate participation in the broader multi-stakeholder efforts to achieve UN goals. These supporting elements include various forums and platforms that enable companies and other stakeholders to work together – by geography, sector and/or issue.
- Drivers and Incentives: The “business case” for corporate action on sustainability issues has been significantly strengthened over the last decade, driven by very important developments in a number of areas. These include the strengthening of society-based drivers, reflecting changing norms and expectations for responsible business. Similarly, market-based drivers have been strengthened as sustainability increasingly impacts a company’s ability to attract and retain customers, investors, employees and business partners.
Figure 2. Post-2015 Business Engagement Architecture
Private Sustainability Finance: From managing risks to embracing new opportunities that create value for business and society
The financing needs of an ambitious and truly transformational post-2015 agenda will require a significant increase in financial resources that address social, environmental and economic development needs. With the world on a slower growth path where external funding conditions – particularly Official Development Aid – are gradually becoming more restricted, there is a growing consensus that the bulk of sustainable development finance will need to come from the private sector.
As the corporate sustainability movement grows around the globe, the private sector is embedding sustainability considerations in trillions of dollars worth of investments and increasing its impact on sustainable development.
The adoption of sustainability considerations in private investments started as a risk management practice to avoid harmful investments – Responsible Finance with a “do no harm” approach.
Now a number of principle-based responsible and sustainable finance initiatives are starting to gain critical mass throughout the investment value chain. Examples include the UNEP Finance Initiative (UNEPFI)(5) and UN-supported Principles for Responsible Investment (PRI)(6), the Equator Principles(7), the Principles for Sustainable Insurance(8), the Sustainable Stock Exchanges (SSE)(9) initiative and innovative approaches to sustainable foreign direct investment by multinationals.
These initiative are increasingly taking a more proactive and deliberate approach, seeking investment opportunities that deliver measurable positive social or environmental results in addition to financial returns, and supporting the development of innovative finance mechanisms for this purpose. “This new mindset, Responsible and Impactful Private Finance, is critical to create long-term value for business and society and is gaining global attention throughout the investment value chain” .
This new mindset has the potential to turn private sustainability finance into a key driver of sustainable development, with responsible and impactful private sustainability finance in the USD trillion range in the coming years.
A better future for all
Delivering a better future for all requires action by all – governments, corporations, citizens, consumers, workers, investors and educators. Business is at the heart of virtually any widespread improvements in living standards and markets are essential for creating and diffusing solutions that will drive the changes our world needs. Assessing the issues that comprise the future global development agenda and providing a role for business in the post-2015 process will ultimately help to make corporate sustainability a transformative force in achieving a shared, secure and sustainable future.
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