Raising the Bar: Rethinking the role of business in the Sustainable Development Goals | Sustainability | Economic Inequality

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The 2030 Agenda for Sustainable Development gives business a significant role to play in efforts to achieve the SDGs, based on its ability to invest and innovate. However, for companies to truly contribute, they must move beyond current forms of engagement, abandon a narrow focus on the SDGs as an opportunity to increase corporate profits and embrace their wider responsibilities to the societies in which they operate. This paper explores ways in which companies can provide more meaningful contributions to governments
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  OXFAM DISCUSSION PAPERS FEBRUARY 2017 RAISING THE BAR Rethinking the role of business in the Sustainable Development Goals The 2030 Agenda for Sustainable Development gives business a significant role to play in efforts to achieve the SDGs, based on its ability to invest and innovate. However, for companies to truly contribute, they must move beyond current forms of engagement, abandon a narrow focus on the SDGs as an opportunity to increase corporate profits and embrace their wider responsibilities to the societies in which they operate. This paper explores ways in which companies can provide more meaningful contributions to governments’ commitments to reach the Sustainable Development Goals.  Written by Namit Agarwal, Uwe Gneiting and Ruth Mhlanga Oxfam Discussion Papers   Oxfam Discussion Papers are written to contribute to public debate and to invite feedback on development and humanitarian policy issues. They are ‘work in progress’ documents, and do not necessarily constitute final publications or reflect Oxfam policy positions. The views and recommendations expressed are those of the author and not necessarily those of Oxfam. For more information, or to comment on this paper, email rhmlanga1@oxfam.org.uk www.oxfam.org    SUMMARY Since the United Nations General Assembly adopted the 2030 Agenda for Sustainable Development in September 2015, the Sustainable Development Goals (SDGs) have attracted greater interest from many businesses and business associations. While governments are the key actors in driving the SDGs, business is an important stakeholder on account of its resources, its ability to innovate and its scale and reach. This paper acknowledges the important role that businesses can play in contributing to the delivery of the SDGs, while cautioning that many companies are currently approaching the SDGs too superficially, making only marginal improvements and uncritically assuming that business and sustainable development agendas will align. Businesses should recognize that their contributions to sustainable development have hitherto been ambivalent – delivering substantive increases in global wealth but also increased inequality, environmental damage and climate change. More substantial changes will be needed in business behaviour to achieve the ambitious vision of the 2030 Agenda. This paper argues that meaningful engagement by business with the SDGs consists of three steps. First, companies should focus on those areas or goals where their business has the greatest potential impact, either positive or negative. This requires mapping and assessing impact areas to understand the full breadth of connections with the sustainable development agenda. Before any considerations to ‘do good’, businesses should ensure that their current activities do not have a negative impact on sustainable development outcomes and do not hinder the ability of others (governments, other businesses, civil society organizations) to achieve the SDGs. Second, meaningful engagement by companies requires going beyond cherry-picking SDGs based on win-win opportunities, and instead integrating sustainable development concerns into their core operations. This requires them to look at how their impact is shaped by business functions such as sourcing, employment, tax planning and corporate strategy and to adopt a holistic approach to engagement with the SDGs. This deeper level of engagement requires businesses to raise their level of ambition, identify key areas of tension between commercial practices and the SDGs, and work to find ways to realign them. Third, we need more transformative ways of thinking about the future role of business in sustainable development. The social, political and ecological crises we are facing require businesses to collectively challenge some of the economic paradigms that have ruled their behaviour for the past few decades and address the structural barriers that prevent more sustainable businesses from flourishing. New business models that to a greater degree align business agendas with societal aims represent another promising avenue to achieve sustainability globally, while leaving no one behind. This paper also identifies three cross-cutting areas where more work is needed. First, the generic interest of businesses in the SDGs is yet to be matched by commitment to transparency and accountability. Existing reporting frameworks for business – due to their fragmentation and voluntary nature – give companies significant leeway in deciding what to disclose, how much and through what mechanisms. A strong SDG reporting framework with a focus on openly available, comparable data and user-friendly technology could help to create trust and accountability among different stakeholders and business. Second, the role of private finance in helping to fill the SDG funding gap requires greater scrutiny, including an examination of types of private finance, their modalities and their potential contributions to achieving the SDGs. Similar to the elevation of the role of the private sector in delivering the SDGs, there has been significant enthusiasm for private finance as a funding source. While private sector investment is needed to deliver the SDGs, central questions of risk, accountability and impact need to be asked, as well as recognizing that private investment cannot be a substitute for public investment in key areas such as essential health and education services or social protection. The question of private finance and the SDGs is also intimately linked with discussions of what an SDG-compatible global financial system should look like, and how greater alignment between financial and social returns can be achieved. Finally, there is a need to reaffirm the role of governments as the main drivers in achieving the SDGs. The increased focus on partnerships with business risks distracting from the fact that more, not less, governance will be required to achieve the SDGs. Governments and regulators are key in setting the norms and expectations and monitoring sustainable behaviour by business, but are often discouraged by strong opposition from corporate interests. Companies that truly wish to support the spirit of the SDGs should actively support government action in promotion of the public interest. The paper ends with suggested steps for businesses to start making a more meaningful contribution to delivering the SDGs, in the hope of encouraging new thinking and new action. Raising the Bar: Rethinking the role of business in the Sustainable Development Goals 2  1 INTRODUCTION ‘I am counting on the private sector to drive success. Now is the time to mobilise the global business community as never before. The case is clear. Realising the Sustainable Development Goals will improve the environment for doing business and building markets. Trillions of dollars in public and private funds are to be redirected towards the SDGs, creating huge opportunities for responsible companies to deliver solutions.’  – Ban-Ki-moon, former UN Secretary-General (2007–16) 1   The United Nations’ Sustainable Development Goals (SDGs) offer an inspiring and inclusive vision of the future: a world free from poverty, injustice and discrimination and a healthy planet for present and future generations. Compared with their predecessors – the Millennium Development Goals (MDGs) – the SDGs lay out a more comprehensive approach in terms of their scope and the actors responsible for delivering them. Most strikingly, the SDGs assume a substantial role for business and its ability to make contributions to their achievement. 2  The importance of business in the context of the SDGs represents a significant milestone in a longer-term trend that started with a global push for responsible business conduct in the 1980s and 1990s. A backlash against unsustainable business practices   expanded the traditional responsibilities of companies to do no harm, and this gradually evolved to focus also on the positive contributions that businesses could and should make towards sustainable development objectives. Today, business is increasingly more than just a driver of economic development confined to creating wealth and employment and providing goods and services. Rather, its all-round presence within the SDGs represents a new development paradigm that attributes to business a more central and diverse role across all aspects of sustainability. 3  The elevation of business in the context of the SDGs represents both a significant opportunity and a significant challenge: an opportunity as it brings the benefits of additional finance, technology, skills and innovation from the business sector; and a challenge in that it bestows unprecedented power and expectations on business as a development agent   purposely seeking to deliver sustainable development outcomes. Given this ambivalence, it is not surprising that there are diverging views among governments, UN institutions and civil society organizations (CSOs) as to the appropriate role of business in delivering the SDGs. While some maintain that there is no alternative to a business-centric SDG implementation model, others have raised serious concerns about the risks of ‘business as usual’ continuing under the reputational mantle of the SDGs. 4  This paper recognizes the importance of business and its ability to shape and transform lives around the world, but it also challenges businesses to focus on achieving much greater alignment between their purpose and conduct and sustainable development. While there have been promising signs of progressive businesses and their leaders rethinking the role and purpose of business in light of pressing global challenges, the majority of the business community remains trapped in an unsustainable cycle of short-term profit motives and marginal consideration of sustainability. 5  Our hope is for the SDGs to offer an opportunity to change that. However, for the ambition of the SDGs to be realized, businesses will need to engage in more than a few cosmetic changes. We propose a three-phased approach towards more meaningful business engagement in the SDGs. The three steps for businesses are: ã  Prioritize an understanding of impact; ã  Align core business strategies with the SDGs; ã  Work towards systemic change. Raising the Bar: Rethinking the role of business in the Sustainable Development Goals 3  Of course, there are other areas that are vital in helping to support business alignment with the SDGs. In this paper, we discuss three such areas, including issues of transparency and accountability, broader questions on the sustainability of private finance and the role of governments in driving and regulating for the SDGs. Before going further into the argument, two clarifying statements are in order. First, we take as our starting point the recognition that business is far from homogenous in the way it approaches its role and responsibility in sustainable development. Companies vary greatly in size, in terms of the type and scope of their impact, where their profits go, the nature of their products and services, whether they are driven by a long-term perspective and how they make decisions when profits are pitted against pro-poor outcomes. There is thus a need to develop tailored approaches to the business/SDG relationship, which lies beyond the scope of this paper. Second, while businesses can assume a variety of roles in working towards the SDGs, this paper focuses on the contributions of companies’ core functions. It is aimed at all companies that are grappling with the question of what the SDGs mean for them. It does not provide ‘silver bullet’ solutions to the challenge of maximizing business contributions to the SDGs, but instead aims to encourage new thinking and ideas and to add to discussions about the role and contribution of business that have already taken place within the SDG community. Raising the Bar: Rethinking the role of business in the Sustainable Development Goals 4
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