The Sustainable Development Goals (SDGs) map out a global vision for a better world. They set out ambitious goals and targets for people, prosperity, planet and peace. Getting there will require us to work together—no matter where we live or work, this is a universal call to action. Leaders in government, business and civil society—all of us must develop new ways of operating and co-operating, if we are to leverage the necessary financial, technical and managerial resources to achieve these goals.
And because the journey will be a complex one, we must become a community of learners as well as practitioners. That is why over the past 10 years, Business Fights Poverty and the CSR Initiative at the Harvard Kennedy School have sought to reflect, analyze and codify practical knowledge that will guide how our different sectors can work better together.
A few days ago, we launched a new report at an event in New York to coincide with the UN General Assembly: “Business and the Sustainable Development Goals: Building Blocks for Success at Scale”. (You can download it here).
This new report is part of series of joint publications that explore the role business can play as an equal partner in international development. There is now a broadly-accepted view that business has a central role to play in achieving development outcomes. And there is a wealth of experience about what works, and also about what doesn’t. Despite progress, there is substantial untapped potential that is yet to be unleashed and this report focuses on how we can do that.
The milestone Addis Ababa Action Agenda calls for ‘unlocking the transformative potential of the private sector.’ So what does this really mean? What will it take? How can business achieve more systemic change and development impact at scale?
For us the answer can be found in a series of six building blocks—critical enabling conditions that must be in place to align business incentives and capabilities in favour of success at scale. This report identifies what these building blocks are, takes stock of the progress we are making in putting them in place, and explores what more needs to be done.
It is our firm view that these building blocks will unlock a future in which all companies can work to drive sustainable development, not only through flagship corporate social responsibility projects but more importantly through standard business operating procedures aligned with broader processes of systemic change and collective action that, together, generate impact at scale.
Given the ambition of the SDGs, and the essential role that business must play with others in achieving them we must take stock and reflect deeply on what it will take to get there, and we must do that together.
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One of the toughest challenges set out in the report is: What can we do to renew, sustain or even intensify focus on some critical foundations for the success of the SDGs: the rule of law, good governance, anti-corruption and the business enabling environment? (p.20)
The value of doing so is underlined by the recent (27th Oct) publication of the World Bank’s annual Doing Business survey, which shows how easy it is to start up and run a business in 189 economies. It spells out the substantial costs time involved in getting business-critical services and approvals in many countries, such as getting connected to an electricity grid, registering property or enforcing contracts – but these are also good indicators of the overall institutional environment for non-commercial organisations, without which the SDGs can’t be achieved.
The impact of this environment will become more apparent as multinationals increase their investment in the development of local supply chains – to achieve greater security of supply or cost savings, or to comply with Local Content or investment agreement requirements. This is particularly important for FMCG companies looking to move beyond local agricultural sourcing – typically from smallholder farmers operating in the informal economy – to develop local value chains that need to operate in the formal economy, such as brewing and food processing.
David Kennedy of DFID says in the report that DFID wants “an active dialogue with the private sector to understand better the constraints to greater levels of investment and trade”. But this will most likely only elicit what most companies already say to governments about the direct impacts on their business, unless companies make concerted efforts to find out how the institutional environment affects their current and potential business partners. Companies could take an approach that is not dissimilar to how many approach human rights and ant-bribery & corruption:
a) Map the country risks, using global indices like Doing Business or the WEF Competitiveness Index
b) Validate these risks, by engaging with their own managers and local suppliers
c) Agree an agenda for change, working with current and potential suppliers and local political and business representatives
d) Implement an evidence-based advocacy programme, preferably led by existing collective forums
e) Help SMEs to negotiate the existing business environment
f) Support training programmes that help build the capability of local institutions
There are many other steps that business can take (and the above is explored in more detail in my LinkedIn posting) but business must first establish the institutional constraints on their own growth and that of their business partners. Only then will a compelling business case for embarking on an institutional reform agenda will emerge. It also requires that civil society, donors and governments accept that business has a legitimate and invaluable role in identifying barriers to growth and the opportunities to improve the business environment.