The private sector has a seat at the table, now it's time to step up

The momentum has been building for years, and this past week in New York has demonstrated that the era of greater private sector participation in development has arrived.

From a series of business-related events and summits to the United Nations, the sense from our own Devex Impact conversations with executives as well our coverage of the proceedings is that companies have featured much more prominently in what is undeniably one of development’s biggest weeks of an important year.

Perhaps one example was the U. N. Private Sector Forum, where an impressive lineup included the likes of U.N. Secretary-General Ban Ki-moon, German Chancellor Angela Merkel, Facebook CEO Mark Zuckerberg and musician and ONE Campaign activist Bono. It was certainly a case of the A-listers showing up to the business meeting.

Bono illustrated the shift in thinking that has taken place in his remarks.

“I’m late to realizing that it’s you guys, it’s the private sector, it’s commerce that’s going to take the majority of people out of extreme poverty and, as an activist, I almost found that hard to say,” he said.

It seems clear that despite virtually no engagement in the process of creating the Millennium Development Goals, business is proud of its role in the formation of the Sustainable Development Goals. Numerous business leaders Devex Impact spoke to said that the involvement in crafting the goals has contributed to much greater buy-in among the private sector. That sense of pride could be heard in the speeches and added to the celebratory environment at several events, including a Shared Value Initiative breakfast. 

But when you ask for a seat at the table, as many in the private sector have done, it also means you have to step up. And that is the task that now lies ahead.

Companies are still familiarizing themselves with the goals and targets — there are some complaints about the sheer number of them, but the agenda seems to have been accepted. More than a few of the leaders we interviewed said that complexity of the framework means it will take time to understand and determine points of convergence between the SDGs and their business.

An emerging set of tools will also try to help companies through that process.

The SDG Compass, for example, launched Saturday by the U.N. Global Compact, the World Business Council for Sustainable Development and the Global Reporting Initiative, is an online, open source tool to help businesses align their strategies with the 17 goals and measure their progress on SDG implementation.

The Global Compact is also partnering with Oxfam International on Poverty Footprint, a tool that allows companies and civil society partners to assess corporate impact on poverty.

It seems certain more examples of such tools will emerge and the sentiment this week in New York seems to be the more the merrier as companies look to digest the goals and move from theory to practice.

While the SDGs are not likely to overhaul corporate policy, a number of companies have already announced commitments aligned with specific goals and are planning to grapple with which targets and indicators are most relevant to their business.

At Nestlé, that process begins next week when its Creating Shared Value Council, an external advisory board, meets to discuss how the company will focus on and work towards the SDGs.

Safaricom, the leading mobile network operator in Kenya, releases its sustainability report in two weeks and will already get to work on the next report, which will focus on links between the SDGs and its business. 

Platforms like the U.N. Global Compact, the International Chamber of Commerce and others can also play a role in helping businesses through this process and push organizations to understand that “achieving the SDGs does not imply a loss of profit,” according to John Danilovich, ICC’s secretary general.

This week has represented a moment of transition — some of the old language around corporate social responsibility and a more traditional definition of public-private partnerships still exists, but more companies seem to realize that achieving goals of reducing poverty, improving health and tackling climate change will ultimately represent a value proposition and create better markets for their products and services.

And so, in addition to looking to how their core business can tackle the world’s most pressing social and environmental issues, business leaders are also looking to new ways to work together. Perhaps the next chapter in partnerships, according to several business leaders people Devex Impact spoke to this week is to more engagement between businesses — both through industry associations or alliances and through individual corporate-corporate partnerships. It’s beginning to happen already, of course — Unilever created a platform called Foundry to better engage innovative entrepreneurs — but there’s definitely room for growth.

While it’s largely been an enthusiastic atmosphere here in New York, there are challenges that remain and issues that were absent from the conversation.

Safaricom CEO Bob Collymore said that talk about the critical issue of corruption and governance was missing from many of the meetings and forums he attended this week.

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Janet Voûte, Nestlé’s global head of public affairs, said she was struck by the dichotomy of views around SDG 2 to “End hunger, achieve food security and improved nutrition, and promote sustainable agriculture.” The challenge, she said, is that there seems to be a lot of uncertainty about determining the right solutions and implementing them successfully, particularly related to nutrition.

Capital markets also present one of the greatest challenges and finding a way to get stock exchanges to value and measure social and economic benchmarks could give many businesses a push in the direction of sustainability.

Sir Mark Moody Stuart, former chair of oil company Royal Dutch Shell, global mining company Anglo American and current co-chair of U.N. Global Compact said global stock exchanges and capital markets are the next frontier. Sir Mark, who was at the New York Stock Exchange last week said the visit reinforced his belief in a need for listing standards and global transparency.

While that may still take some time, there were a host of innovative development finance mechanisms discussed and announced this week which will seek to use donor or philanthropic funds to leverage some of that commercial investment.  

One new type of mechanism — the Social Success Note — is being piloted by Yunus Social Business and The Rockefeller Foundation to fund social enterprises. While they’re starting small, the idea is to create a fund capitalized by commercial capital that will be used to fund companies identified by Yunus Social Business. The way it works is that the social enterprises will pay back the principal of the investment and Rockefeller will pay the investors a return based on the social impacts achieved.

Whether that model proves successful or the myriad other initiatives announced achieve their results remains to be seen. What is certain is that this new era of collaboration, driven by a set of ambitious goals means the private sector must seize the opportunity, claim the place it asked for — and back up much of the talk of the past week with action.

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