Humanitarian action makes sound business sense

By Marcos Neto 17 June 2016

Members of DHL’s disaster response team distribute relief supplies sent by international aid organizations and other donors in earthquake-hit Peru in August 2007. The potential impact by the private sector in areas of conflict and natural disaster is significant. Photo by: Deutsche Post DHL / CC BY-ND

It’s time to fully endorse the role of the private sector and philanthropy in humanitarian action.

The challenges the world is facing right now are overwhelming. More than 130 million people are in need of humanitarian assistance in the world today. Some 60 million people have been forcibly displaced. United Nations-coordinated plans to provide lifesaving aid and protection to the most vulnerable people require nearly $21 billion every year.

The potential involvement and impact by the private sector and philanthropic foundations is significant. On average, the private sector accounts for 60 percent of gross domestic product, 80 percent of capital flows and 90 percent of jobs in developing countries. Philanthropic giving amounts to approximately $60 billion annually from member countries of the Organisation for Economic Co-operation and Development to the “global south.”

It’s a sound business argument: stable economic markets, healthy and secure employers, consumers who can purchase products and services, and good governance and strong institutions. Conflicts and disasters are costly to the whole society. According to the Global Peace Index, violence costs the world 13.4 percent of its GDP. Between 1970 and 2013, over $2.8 trillion in economic losses were reported globally from natural disasters, according to United Nations Economic and Social Commission for Asia and the Pacific.

In February, Tropical Cyclone Winston hit Fiji, resulting in loss of life, disruption to business supply chains and damage to properties. The estimated cost to the Fijian economy was $470 million. Imagine the even greater impact to the Philippines, which is visited by an average of 20 typhoons every year, five of which are destructive.

Private sector networks, individual companies and philanthropic actors are already supporting humanitarian action and development in many countries. But we do not yet have a system fully equipped to channel the necessary resources, skills and expertise to address the humanitarian and development needs. There is potential for much more.

For example, we are helping the private sector in Fiji take stock of all the assets it has and catalogue them. That way, if another cyclone happens, they will be able to say “This company has trucks, that company has fuel, that company has this …” And they will be able to deploy these resources in a coordinated manner, very quickly and to greater impact.

More than 900 companies around the world have voiced a desire to engage in humanitarian action in a more systematic, strategic and coordinated manner. What they needed was an initiative that would transform the way the private sector engages before, during and after crises.

In response to this call, the United Nations Office for Disaster Risk Reduction, the United Nations Office for the Coordination of Humanitarian Affairs, and United Nations Development Program have established the global Connecting Business Initiative.  

The initiative has been well-received. Companies, governments and philanthropic organizations connected through the SDG Philanthropy Platform are voicing their support to the initiative.

At the same time, governments and international actors need to continue to support the involvement of the private and philanthropic sectors by creating conditions and regulation that allow these actors to best use their key skills and resources. This means incentivizing impact and socially responsible investment, providing information and promoting good practices, educating consumers and making finance available.

We have no other option than to try to enable the private sector, U.N. agencies, governments and civil society to work better together. If disasters and conflict keep wiping out our development gains and taking us back to square one, we will never achieve the Sustainable Development Goals, and there is no plan B for the people and the planet.

Following the World Humanitarian Summit, Devex — along with its partners Deloitte, Ericsson, United Nations Development Programme, and United Nations Office for the Coordination of Humanitarian Affairs — have come together for #ShareHumanity. This six-week online conversation explores the role the private sector plays in humanitarian relief efforts, preparedness and response, both now and in the future.

Use #ShareHumanity and tag @devex to have your say.

About the author

Undp maros neto
Marcos Neto

Marcos Neto is the director of U.N. Development Program’s Istanbul International Center for Private Sector in Development and UNDP private sector and foundations team.

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