Business leaders such as Unilever NV’s chief executive officer Paul Polman and Alibaba Group founder Jack Ma are trying to convince their peers to deliver public good alongside profits.
Companies that do so could unlock at least $12 trillion in savings and revenue and create 380 million jobs by 2030, according to a new report from a commission they sit on. But the report says realizing that “economic prize” means businesses would have to pursue social and environmental sustainability as “avidly” as they pursue market share and shareholder value.
The Business & Sustainable Development Commission was formed at last year’s World Economic Forum in Davos, Switzerland. At this year’s forum, where rising inequality and social polarization are topics of conversation, the commission is calling on business to regain public trust by getting involved in a United Nations agenda for 2030 that seeks to solve the world’s biggest development challenges.
The U.N.'s ambitious set of 17 sustainable development goals (SDGs), agreed to by governments in 2015, cover issues ranging from education and health care to climate change and clean energy. Achieving them would require $5 to $7 trillion per year in investment between 2015 and 2030, according to U.N. estimates. That can’t come from public funding and development assistance alone.
Private wealth holds “huge potential” in helping to fund the goals, Swiss bank UBS Group says. UBS is working with the Bill & Melinda Gates Foundation and others who have expressed interest in launching a new SDG-related investing and philanthropy platform called Align17.
“We will only achieve the sustainable development goals if private capital funds them and private business implements them,” said Gavin Wilson, CEO of International Finance Corp.’s private equity and venture capital firm. The IFC is an arm of the World Bank Group that works with the private sector in developing countries.
Many of the business leaders needed to carry them out, however, “don’t know what the goals are and don’t appreciate that they may be central to their business model,” Wilson, one of the members of the commission, told Bloomberg BNA. Commissioners are trying to spread the word to another 500 to 1,000 CEOs. One of their ideas is to come up with a business school course on the development goals.
Another is to make sure sustainability awareness is factored in when headhunters search for CEOs. “If we can do that, then I think that will help change leadership by changing leaders,” Wilson said.
The commission also plans to make “global goal league tables” that publicly rank corporate performance across indicators including gender equality and supply chain labor standards.
“No chief executive will want to be beaten by their peers on anything, let alone how sustainable their business is,” Steve Waygood, who leads the responsible investment team at Aviva plc’s asset management business, told Bloomberg BNA. Aviva Investors created the world’s first benchmark of publicly listed companies’ human rights performance in 2014.
Before businesses can be ranked, they must have a framework for reporting on their contributions toward the development goals. “That doesn’t exist today,” the Global Reporting Initiative’s Deputy Chief Executive Teresa Folgerberg told Bloomberg BNA.
GRI, the world’s most commonly used sustainability reporting system, is working with the U.N. Global Compact, a voluntary corporate social responsibility initiative, to help companies measure their progress. “Business leaders are looking to demonstrate their own leadership,” Folgerberg said, amid political turmoil in the U.S. and elsewhere.
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More information on the Business & Sustainable Development Commission is available at http://businesscommission.org/.
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