By: Business Call to Action
Why is it so important to include non-traditional development actors, such as the private sector, in efforts to achieve the sustainable development goals (SDGs)? What can they offer that an organisation like UNDP can’t?
The universally adopted SDGs touch upon each and every aspect of society, from health to education to climate action. Achieving these goals thus requires an all-of-society approach, encompassing all stakeholders, including the private sector.
More specifically, achieving the SDGs requires a vast amount of resources and innovation. It also requires multisectoral partnerships and identifying complementary strengths. While UNDP has an important role to play in creating an enabling environment for diverse actors to contribute to the SDGs, the private sector brings agility in delivery and new approaches to financing the SDGs through investment and efficiency, and scale in global development.
Moreover, whether they acknowledge, understand, measure and manage it or not, investors and companies have an impact, positive and negative, on the SDGs. UNDP promotes markets and works with the private sector in ways that address economic growth, social development, and environmental sustainability in an integrated way. This helps to create a commonly accepted way to verify that investors and businesses take a holistic approach to quantifying and managing their impacts on the SDGs. UNDP’s SDG Impact facility aims to advance a unified, global effort to generate standards for SDG-enabling investments. At the same time, Business Call to Action is already supporting a range of partners, from SMEs to multinationals, to make concrete, measurable commitments and manage their impact against the SDGs. Co-creating these tools and resources with the business community is essential to achieve relevant results and innovative solutions that help tackle development challenges.
Increasing the resilience of those living at the bottom of the economic pyramid to shocks and crises is a priority for UNDP. How is it partnering with the private sector to achieve this?
Together, UNDP and the private sector are identifying, adapting, scaling and co-creating solutions that help to build resilience against crises and shocks. These solutions can be products, services, processes or even new business models, and the creation process promotes valuable learning opportunities and cross-fertilisation of best practices on both sides.
Initiatives such as the Connecting Business initiative (CBi) engage the private sector before, during, and after emergencies through its networks, increasing the scale and effectiveness of response and recovery in a coordinated manner. With this support, companies understand how they can contribute as first responders during and after natural and man-made disasters and humanitarian crises. This empowers them to contribute to creating more resilient communities, increase local capacity, alleviate human suffering, and help communities recover more quickly.
Furthermore, UNDP partners with the private sector to take advantage of innovative technologies such as mobile cash transfers, drones and digital healthcare services to mitigate shocks and crises. BCtA member company iKure equips community health workers with point-of-care tech devices to capture patient information, make early diagnosis and facilitate tertiary linkages that are otherwise non-existent in India’s remote settings. Equipped with this information, iKure can analyse the root causes of ailments and deploy health solutions to prevent health crises.
What role can inclusive businesses play in building inclusive green economies?
Economic growth is naturally an engine for development as it spurs job creation, income generation, and the provision of goods and services. Unfortunately, not all economic growth reaches those most in need and even growth that does has often come at the expense of the environment. Given the urgent need to address climate change while at the same time leaving no one behind, UNDP promotes inclusive green growth as the path to sustainable development.
Advanced by companies with strong environmental, social and governance (ESG) practices at their core and strategies for reaching low-income markets woven into their core business, inclusive business is a way of stimulating green growth with an explicit focus on inclusive development and empowering those living at the lowest social and economic strata where impact is highest.
Peruvian BCtA member company Sustainable Fishery Trade (SFT) offers one example of an inclusive business model that demonstrates how companies can wed profit, purpose and innovation to achieve inclusive green growth. SFT connects low-income artisanal fishers directly with buyers and ensures fair pay while promoting sustainable fishery practices in Peru and Chile. SFT trains fishers on sustainable fishing methods, which allow buyers to receive higher-quality product and fishers to receive between 30% and 50% higher income for their effort than if they sell to the current market system and which minimise over-fishing of aquatic species. Through its innovative tech-enabled solution, SFT tracks the entire process from fisher to plate and ensures traceability.
Developing more such inclusive and green business models is a good opportunity for companies to generate social and environmental value while stimulating positive commercial returns. Experts predict that companies that reach out to new markets while simultaneously addressing some of the world’s biggest social and environmental problems will place among the top global performers in future years.
Climate change is a global problem that needs to be tackled at the local level. Can you share an example of where UNDP is successfully supporting a country’s private sector to reduce the impacts of climate change?
In terms of climate change, we now know that time is short; dramatic and comprehensive changes are needed to reverse or slow the catastrophic effects our actions are having on the world.
UNDP is the primary actor on climate change in the United Nations and a full two-thirds of UNDP’s climate portfolio is focused on engaging the private sector and fostering connections between private sector actors. Longstanding UNDP partners such as the Global Environment Facility and Green Climate Fund unlock catalytic capital and create an environment for the private sector to engage on climate change issues.
An example of a project that is strengthening the country’s private sector – while at the same time mitigating climate risks – is the GCF-funded project in Sri Lanka, “Strengthening the resilience of smallholder farmers in the Dry Zone to climate variability and extreme events through an integrated approach to water management”.
The project addresses technical, financial and institutional barriers related to achieving integrated water management to improve agriculture-based livelihoods of smallholder famers in Sri Lanka’s Dry Zone. This project promotes private sector partnership through enterprise development, particularly targeting women and youth, and supports entrepreneurship among communities to deliver new technologies for resilient agriculture, drinking water and climate information.
What do societies stand to gain by empowering women financially, economically and socially? And how can inclusive businesses play a role?
Empowering women and girls is a human rights imperative, but also an economic imperative. The sweeping benefits of women’s empowerment are clear and further delay in achieving women’s empowerment is unacceptable. Women account for half the world’s population; if they do not achieve their full economic potential, families and communities will suffer and economies will go on operating at half capacity. In fact, if every country could close its gender gap at the same historical rate as the fastest-improving nation in its regional peer group, the world could add $12tn to its annual gross domestic product by 2025.
We know that businesses and communities flourish when women are included in decision-making, and more so when women are a critical mass. Closing the gender gap and investing in women means investing directly into the company workforce, families and communities, as women are most likely to make decisions based on – and allocate resources into – providing for the health and wellbeing of their families and meeting practical and strategic needs of their communities.
In business terms, research shows again and again that women are good for business. Firms with more executives and board members have higher median returns on assets and equity than their peers, company gender diversity initiatives make it easier to attract and retain talent, and an uptick in female employment is positively associated with GDP growth.
Inclusive business in particular has the potential to empower women living at the base of the social and economic pyramid, where women outnumber men and are significantly poorer. By actively involving disadvantaged women in a company’s core operations and value chain, inclusive business can directly respond to their needs for increased access to goods, services, and income opportunities.
In line with broader business and gender research, evidence shows that women’s economic empowerment through inclusive business not only promotes women’s wellbeing, but drives inclusive business success in terms of growth, financial performance and long-term business resilience, such as the successful UNDP model in Jordan where refugee women are integrated into the labour market. Bangladeshi BCtA member company DBL Group has seen its employee retention rate, efficiency and overall productivity climb alongside the professional advancement of its women staff under its Female Supervisors Leadership programme.
Inclusive businesses’ inclusion of women in core business decisions and operations ensures stable and efficient supply chains, develops and retains a more diverse pool of talent, and enables businesses to reach new consumer segments, among many other boons to business.