A conference dedicated to the relevance of Sustainable Development Goals (SDG) for the Private Sector took place last Friday at the Palais des Nations in Geneva. The high-level event, in conjunction with the 2030 Agenda, was held by the United Nations Institute for Training and Research (UNITAR) in collaboration with the Rotary Club Genève International and the Geneva Chamber of Commerce, Industry, and Services. During the conference, a panel of experts representing the public and private sectors, as well as the Swiss Government and International Organizations, shared their opinions on why it is necessary to encourage companies to implement SDG in their business policies and how can it be done.
The executive director of UNITAR, Nikhil Seth, kicked off the conference with a detailed presentation of the SDG. The 2030 Development Agenda was signed by 193 member countries on 25 September 2015. It includes a set of 17 SDG to end poverty, fight inequality and injustice, and tackle climate change by 2030. According to Nikhil Seth, SDG cannot be achieved without the businesses commitment.
But how can the private sector be encouraged to contribute to SDG achievement? Joakim Reiter, Deputy Secretary-General of the UNCTAD, sees a part of the solution to the problem in building an innovation system that would enable countries to absorb new technologies. This could be reached thanks to a network of incubators and clusters linking universities to the private sector.
Implementing SDG collaboration between various institutions is essential, according to Monika Linn from UNECE (United Nations Economic Commission for Europe). “While developing standards and regulations, we are bringing together all stakeholders: businesses, academia and civil society”, she said. UNECE believes that by bringing all actors together, a multiple perspective with respect to the diversity of interests is built.
Diverse thinking can be also applied to business models, according to Walter Gyger, who was speaking for Rotary International. He believes that the traditional business model is no longer an alternative. Companies need to focus not only on profitability but also sustainability and become more long-term oriented. In his opinion, no government can tackle the current problems alone, therefore all concerned parties, businesses, academia and civil society, have to contribute to the sustainability agenda.
Horyou CEO, Yonathan Parienti, emphasized the potential of the global civil society, which is ready to bring the change. Horyou creates conditions to move the society forward while building bridges to connect people across countries and cultures. The progress toward sustainability will be pushed forward as investors will intensify their funding of social innovation. “We must support the innovators of tomorrow”, he concluded.
So why are investors hesitating? Philip Moss from World Economic Forum explained: “Business representatives are anxious about implementing SDG and need assistance”. This phenomenon is evidenced in the context of investment in developing countries. Despite the high interest from investors and the attractive demographic conditions that promise huge market opportunities, companies estimate that the risk is to high in comparison to the expected ROI. A better business climate would encourage them to allocate more capital in developing markets. Those favourable conditions can be created by initiatives like Convergence, which is a platform that blends private, public, and philanthropic capital for the greater good. Convergence helps connect various investors for “blended finance” opportunities in emerging and frontier markets.
Along the same lines, Marion Jansen, Chief Economist at International Trade Centre, brought up the need for support of the private sector. She thus focused on the role of small and medium-sized businesses which represent about 80% of business worldwide and 70% of global employment. “SMEs are much less productive than large firms and the wages are accordingly lower” she stated. A way to preserve the viability of the SME is to increase its productivity. This can be done through collaboration with private and public partners like the Chambers of commerce. It is crucial to provide clear guidelines to small and medium-sized companies and help them to comply with the standards.
Wanda Lopuch, member of the board of directors at Global Sourcing Council, pointed out that language was another obstacle on the way to implementing SDG by private companies: “Unless we incorporate the language of business, which must include the word “profit”, we will be loosing tremendous opportunities”, she warned. According to Lopuch, the visionary and inspirational language of diplomacy used to communicate about SDG is not adequate to the private sector which prefers operational and measurable business terms. The communication style needs to be adapted to those recipients in order to make them feel like “SDG-owners” and to convince them to participate in the implementation of sustainability goals. She defined the expectations toward the private sector as «profit with purpose» that can be created through impact investment and financing high-risk businesses.
The discussion was completed with the optimistic observation of Matthew Kilgarriff, Vice-President of Global Compact Network Switzerland, who reminded the audience that more than 8,000 for profit organizations are already allied with UN through their voluntary commitment to Global Compact. This proves that companies are willing to take this step to transform our world through principled business and “gives hope for a more sustainable future”, he concluded.
Written by Joanna Kozik