The private sector can help fix the world economy
Putting the Sustainable Development Goals (SDGs) at the heart of the world’s economic strategy could unleash a step-change in growth and productivity, with an investment boom in sustainable infrastructure as a critical driver. However, this will not happen without radical change in the business and investment community. Real leadership is needed for the private sector to become a trusted partner in working with government and civil society to fix the economy.
In its flagship report, ‘Better Business, Better World’, the Business & Sustainable Development Commission recognises that while the last few decades have lifted hundreds of millions out of poverty, they have also led to unequal growth, increasing job insecurity, ever more debt and ever greater environmental risks. This mix has fuelled an anti-globalisation reaction in many countries, with business and financial interests seen as central to the problem, and is undermining the long-term economic growth that the world needs.
The Business & Sustainable Development Commission has spent the last year exploring what it will take for business to be central to building a sustainable market economy – one that can help deliver the SDGs. ‘Better Business, Better World’ shows how.
“At a time when our economic model is pushing the limits of our planetary boundaries and condemning many to a future without hope, the Sustainable Development Goals offer us a way out”Unilever CEO Paul Polman
Rapid growth opportunities in market hotspots
The Business & Sustainable Development Commission believes the SDGs provide the private sector with a new growth strategy that opens valuable market opportunities while creating a world that is both sustainable and inclusive. And the potential rewards for doing so are significant.
The report reveals 60 sustainable and inclusive market ‘hotspots’ in four key economic areas – energy, cities, food and agriculture, and health and wellbeing – that could create at least US$12 trillion, worth over 10% of today’s GDP. These hotspots have the potential to grow two to three times faster than average GDP over the next 10–15 years.
A fairer, more prosperous world for all
Beyond the US$12 trillion directly estimated, conservative analysis shows potential for an additional US$8 trillion of value creation across the wider economy if companies embed the SDGs in their strategies. The report also shows that factoring in the cost of externalities (negative impacts from business activities such as carbon emissions or pollution) increases the overall value of opportunities by almost 40%.
“At a time when our economic model is pushing the limits of our planetary boundaries and condemning many to a future without hope, the Sustainable Development Goals offer us a way out,” says Unilever CEO Paul Polman, who co-founded the Business & Sustainable Development Commission. “Many are now realising the enormous opportunities that exist for enlightened businesses willing to stand up and address these urgent challenges. But every day that passes is another lost opportunity for action. We must react quickly, decisively and collectively to ensure a fairer and more prosperous world for all.”
Two critical conditions must be met
While the opportunities are compelling, the Business & Sustainable Development Commission makes it clear that two critical conditions must be met to build these new markets. First, innovative financing from both private and public sources will be needed to unlock the US$2.4 trillion required annually to achieve the SDGs.
At the same time, the Business & Sustainable Development Commission believes a ‘new social contract’ between business, government and society is essential to defining the role of business in a new, fairer economy. The report recommends that organisations must rebuild trust by creating decent jobs, rewarding workers fairly, investing in the local community and paying a fair share of taxes.
Throughout 2017, the Business & Sustainable Development Commission will work with companies to strengthen corporate alignment with the SDGs, including: mentoring the next generation of sustainable development leaders; creating sectoral roadmaps and league tables that rank corporate performance against the SDGs; and supporting measures to unlock blended finance for sustainable infrastructure investment.