June 20 marked World Refugee Day, and the assessments of how many displaced people are suffering and living in fear serve as a reminder of the need for the proposed sustainable development goal 16.
For the first time, goal 16, which seeks to promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels, elevates the issues of peace and governance. In a series of meetings at the United Nations headquarters in New York this week, discussions unfolded about the goal — in particular, the private sector’s role in creating peace and supporting strong governance.
The discussion comes at an interesting moment: the occasion of the U.N. Global Compact’s 15th anniversary provides an opportunity to take stock of progress on private sector participation at the U.N. and with the global development community in general. Devex Impact will be following the issue closely in the weeks to come.
Business for Peace is a part of that, but the initiative, which grew out of small group discussions a decade ago, now drew a room full of companies, civil society and government representatives to gather and work to determine what progress can be made moving forward.
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There was some back-patting and self congratulation, in part to give companies an opportunity to discuss their successes and serve as an example to their peers, which Melissa Powell, head of Business for Peace at the U.N. Global Compact, said is the single most important way to garner more corporate participation.
But there was also conversation on what needs to be done. Examples included avoiding actions that might undermine institutions, create instability or lead to graft, but there was also some clamor to be more proactive in working with governments and civil society to create a more stable operating environment in which to implement strong, durable systems.
While businesses may increasingly see peace and good governance as critical to sound decision-making, there are still relatively few taking proactive action on the ground. And questions remain about how to foment sustainable, long-term, and effectively measured private sector participation.
It may start with a realization that no business can be involved in all aspects of supporting goal 16, said Sir Mark Moody-Stuart, chairman of the Foundation for the Global Compact, chair of the Business for Peace Steering Committee and a former chair of Royal Dutch Shell.
“Think about all of these areas, but you cannot possibly address them all,” he said. “Just pick one.”
Companies embarking on that process should talk to people who manifestly disagree with them, Moody-Stuart said. It can be difficult, but it is in a company’s best interest to engage with organizations that are protesting its actions — ultimately working toward understanding their viewpoint and achieving a common goal.
And there are critics, since the U.N Global Compact and Business for Peace initiative provide voluntary guidelines with few teeth or incentives to spur action. But the G-20 is evidently nearing action on tackling the issue of tax avoidance through increased transparency, according to Fiona Reynolds, managing director of Principles for Responsible Investment. And at least for oil and gas companies, government regulations in some countries — including most recently in Canada — are requiring in-depth reporting, which will boost the accountability of governments to more responsibly manage national wealth and better prioritize spending.
Reynolds explained that PRI is working with investors to educate them on tax issues and said companies should expect more questions on these issues in their boardrooms in the next six months.
Georg Kell, the founding executive director of U.N. Global Compact — who is stepping down from his post, with a replacement expected to be announced shortly — said more rapid change is afoot.
“I hereby guarantee that within four years the marketplace will change from within,” he said.
And why the confidence? Because for the first time, Kell said, asset managers — who long have been a “broken link” — are starting to understand that sustainability pays off and, as they begin directing investments accordingly, it can spur swifter movement.
Some companies are farther down the path than others, he said. Frameworks and guidelines, like the global Business for the Rule of Law framework, for example, launched by U.N. Global Compact this week, aim to help shape engagement and create an easier path to participation.
One of the challenges, however, is that companies tend to be reactive, rather than proactive in their involvement. Despite that, examples have emerged — like Chevron with its work through the Niger Delta Partnership Initiative — where companies are demonstrating that they see the importance of getting involved and are stepping up efforts in peace-building and conflict prevention efforts.
And it’s not only multinational corporations getting involved. Local companies too, which bring with them the local knowledge of people and culture, are also increasingly recognizing their role and dealing with the same issues, said Ayotola Jagun, chief compliance officer at Oando PLC, a Nigerian energy company. The firm has been active in helping with job creation, with the amnesty given to Niger Delta militants set to expire this year.
Government policies, according to Jagun, can help promote government action — both by providing incentives to companies working in conflict-affected areas and to investors who are financing companies that create jobs in conflict zones.
The role of business in peace and governance is just one part of the broader narrative about how companies can contribute to each of the SDGs. At Devex, we will be analyzing the U.N. Global Compact’s history — and future — as we continue to explore the changing nature of private sector engagement with the U.N. and in development writ large.
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