I was struck by the rather unprecedented linking of arms recently at Cannes by CEOs of the advertising industry’s “big six” competitors; WPP, Dentsu, Havas, IPG, Omnicom and Publicis, announced they would commit to the UN Sustainable Development Goals (SDGs) to collectively build awareness and work with their clients in achieving them. Visionary commitments to sustainable development are inspiring and create halos for corporate brands. However, meaningful change will require companies to go beyond visionary intent or uplifting hashtags. Companies need to focus, declare specific targets and invest resources, people and time in a few, carefully chosen areas. Moreover, these priorities should be set at the very top of the organisation.
Focus is essential for several reasons. Companies have to prioritise and allocate scarce resources to have impact at scale. A carefully selected tangible goal helps communicate the rationale to all stakeholders. Most significantly, the discipline of having to make a choice encourages company management to reflect on its areas of comparative advantage and how it is best positioned to contribute to solving complex development problems.
Consider two companies, MasterCard and Coca-Cola, both part of our Inclusion Inc. research initiative involving major multinational companies investing in sustainable development. The very different approaches – one with a laser-like focus, the other broader – of companies as distinct as these two provide a guide to others on the importance of focus and how to go about it.
Consider this response from MasterCard’s CEO, Ajay Banga, onthe company’s point of focus in the area of inclusive growth:
“Inclusion is an idea whose time has come. It’s our down payment on a better future for ourselves and for the planet. We’re helping include more people in the financial mainstream, so they can get access to insurance, save money for a rainy day, and pay their bills without standing in queues for hours, things many of us tend to take for granted. Doing this makes business sense because it drives electronic payments. It also reduces the role of cash around the world. Both are important to our bottom line and our strategy.
We’ve committed to reaching 500 million people in this inclusion program by 2020 with the help of our partners. We’re well on our way at 200 million.”
MasterCard’s target is linked to SDG8, “Good Jobs and Economic Growth”, as noted when the company joined the 35 corporate commitments made in September 2015 at the launch of the UN 2030 Agenda.
The choice is remarkable for several reasons. First, it is directly linked to MasterCard’s objective of enabling cashless payments and is tied to how it frames its largest untapped growth opportunity: making inroads into the 85% of the world’s population, it estimates, that operates with cash. The second aspect of this goal is its practicality. It’s easily communicated and the rest of the MasterCard organisation can mobilise to help achieve the target. It sets out an objective in an area in which MasterCard has leverage, through market relationships, technology and expertise. And the quantitative nature of the target also makes it easier to measure progress.
The specificity of the goal also helps place it in the larger picture. MasterCard’s commitment is part of a parallel initiative led by The World Bank to mobilise a network of partners who have committed to creating 1.95bn financial accounts by 2020. With 2 billion adults without access to anaccount, according to Global Findex 2014, this would, in essence close the gap on financial access. Of course, financial access is only the first step. The accounts have to be used in productive ways to translate into “good jobs and economic growth”. MasterCard’s sharply focused goal lends clarity on which other parties need to step in, fill additional gaps and solve the larger development problem.
Alternatively, consider a more complex company, Coca-Cola, with 500 brands, over 3,800 beverage choices and a value chain spread across over 200 countries. Coca-Cola’s footprint is vast. If one were to ask, which of the SDGs can it help advance, the answer turns out to be: all of them. Coca-Cola provides 17 distinct case studies – one for each goal – to make the point.
This might convey the false impression that Coca-Cola is mobilised to single-handedly change the world. When we asked CEO Muhtar Kent, about the company’s priorities, his response indicated that even Coca-Cola organises around focal points: “We created a framework around our three W’s: water, women, and wellbeing. We picked three areas that really matter to our business, areas that we can connect straight into the core functionality of what we call a brand with a purpose, ” said Kent.
Both water and wellbeing represent potential collisions between Coca-Cola’s business needs and societal interests. Water used in the company’s products competes with the supplies of clean drinking water around the world. In addition, consumer health concerns has led to a decline in demand for sugary drinks. Coca-Cola is, in effect, investing in two of the most significant factors constraining its growth and in doing so, helping advance SDG3 (Good Health) and 6 (Clean Water and Sanitation).
As for the third W, women – which helps advance SDG5 (Gender Equality) – that, too, is tied to corporate growth objectives. The company’s program emphasises expanding the entrepreneurial potential of women to help families and communities around the world prosper. “We have an innate belief that when we help create stronger communities, we will then have a stronger business in our communities,” said Kent.
As is the case with MasterCard, focus helps Coca-Cola set targets and track progress. Consider Coca-Cola’s water initiative. It had a goal of “water neutrality” - by 2020, it would return to communities and the environment an amount of water equivalent to what it uses in its beverage production. Kent said the company declared water neutrality five years early – by December 2015 – through reduction, recycling, and replenishment. Not only is this a way to track progress, but it also creates a mechanism for critical debate on Coca-Cola’s impact on water availability worldwide.
MasterCard and Coca-Cola’s cases suggest that to answer the question of where to play on the SDG game-board, companies should consider three criteria:
a) Does the goal affect participants in our value chain?
b) Does our company have the leverage to make a difference?
c) Can we make the business case internally to invest in this area?
CEOs and their companies can help change the world, however, no amount of lofty advertising will make actual change happen. They have to start with a few specific areas that are clear, measurable and down-to-earth.
Bhaskar Chakravorti is the senior associate dean of international business and finance at The Fletcher School, Tufts University and senior advisor for digital inclusion at the MasterCard Center for Inclusive Growth. He is also the founding executive director of Fletcher’s Institute for Business in the Global Context and author of the book, “The Slow Pace of Fast Change.”Content on this page is provided by Business Call to Action, and originally appeared on the The Guardian Business and the Sustainable Development Goals Hub