At this year’s International Leadership Week (Nov 18-21, 2019), The Institute and our speakers are exploring organisational and personal values. Ahead of the event, some of the most authoritative, world-renowned, thought-leadership voices speaking during the week have given The Institute a sneak preview of their thoughts. Here, in the third in this exclusive series of blogs, Marga Hoek discusses the crucial importance of the value of sustainability.
In 2016 the course was set to a better world via the establishment of the United Nation’s Sustainable Development Goals (SDGs).
The global movement to actually achieve these crucial goals is getting into gear, albeit at a slower pace than is needed. More and more of the business and financial world are committed, yet at the same time, the world is experiencing gigantic risks on multiple levels and these are only growing in both numbers and impact.
Consider that, in the previous decade the world’s economy suffered an estimated loss of $2.7 trillion because of natural disasters. This decade will no doubt show an exponential increase, and inaction on climate change comes with the huge comprehensive cost of $24 trillion. Efforts to slow the pace of climate change so far have had insufficient impact and at best, we have 1,000 days to turn the tide.
Public-private partnership to achieve the goals
It is increasingly clear that the way forward is one that must be paved by both business and government, but definitely not by government alone. And this is not a matter of trust, but a matter of roles and numbers. For one thing, governments lack the necessary means to bring about the level of change that is needed. We need to consider that ‘the power of business’ has grown tremendously and should be leveraged to grow a stable, sustainable global economy and society.
Consider that business corporations account for 50 of the largest economies operating throughout the entire planet and that the investment potential of private capital is now a much larger percentage than public investment potential. For instance, the percentage of total capital flows of donor countries’ Overseas Development Agencies into emerging markets, has decreased from over 50% to less than 10%, while private capital flows have increased and grown.
Further, consider the power of business required to safeguard consistency in policy; we are all aware that business was crucial to achieving the Climate Agreement and the SDGs and is equally important to maintaining them. Consequently, governments need business like never before.
Equally, business needs government: the right frameworks and tax systems are needed to create a system-wide change of internalising external costs. Business needs good government to set these frameworks of taxes and regulations, to open up markets, create ‘real and fair’ business cases and thus scale-up solutions. It has been shown, for example, that pricing externalities for food waste prevention alone adds no less than 92% to the value of business solutions addressing food waste.
Business should be, and remain, self-critical
Business must remain diligent and not succumb to becoming too proud of itself for being part of the solution rather than the problem. While some businesses are shifting in the right direction, the solutions are not growing at the speed they need to, and the scale is still too limited. If they are to really contribute to the achievement of climate action, our SDGs, and the new meaning of capital, business must accelerate and scale up the solutions.
A 2017 Global Scan Sustainability Survey, titled Evaluating Progress Towards the Sustainable Development Goals, found that while corporate respondents say their business is responding to the SDGs by developing products or services that will provide solutions - and nearly all report that they are currently contributing or planning to contribute to the SDGs - all respondents agree that society’s progress on sustainable development and the SDGs has been poor thus far.
Although more than 75% of the companies that took part in the survey have already started addressing the Global Goals, it also raises the question of exactly how companies are really integrating the Global Goals into their business strategies, since only a few companies are actually measuring the societal impact of their work with the Ten Principles and the Global Goals, as were set up by the UN. And although by the end of 2018 numbers have gone up, it is not the steep growth we need.
Focusing on the Global Goals and engaging in solutions are definitely beneficial for both business and government and are crucial for a wider system change; to create new markets built on sustainable principles, and thus build trust.
So, business can and must be a key participator in achieving the Global Goals, and in the rebuilding of trust throughout the world: by demonstrating trust, by giving trust, and by deserving trust. The SDGs bring business the huge gift of learning to be much more holistic and think at a much broader system level, which is key to being successful in the multi-stakeholder era we are in now and to building a stable and sustainable world.
Book your free place at Marga Hoek’s International Leadership Week webinar ‘The value of sustainability’ Nov 20, 4pm GMT/5pm CET.