The perfect match: businesses and the SDGs
How sustainability and inclusivity are driving the business models of the future.
With Valentine’s Day around the corner, we thought we’d try our hand at arranging a perfect match. Here’s a sneak peek at the profiles of two disparate parties looking for a partnership that can lead to mutual satisfaction:
- A successful business — Happily independent for a long time, but recently realized that the single life is no longer for it. Looking for a partner who can share aspirations and ideas to grow and prosper together.
- U.N. 2030 Sustainable Development Goals (SDGs) — Commitment has never been a problem for it; in fact, partners commit all the time. The issue is follow-through. Looking for a partner who not only says the right things but also does the right things and will stay the course.
While probably not a tale destined for a blockbuster romantic-comedy, the relationship between businesses and the 17 Sustainable Development Goals, adopted by 193 countries in 2015, has great potential. As the private sector looks for new ways to be competitive and profitable in a volatile, evolving global economy, the SDGs offer insight into emerging markets with a built-in network of possible investors and adopters looking to accelerate their growth.
Each of the SDGs presents opportunities for businesses. Take SDG 12: responsible consumption and production. Today, 95 percent of plastic packaging value — or $80 billion to $120 billion annually — is lost after its first use, according to the World Economic Forum (PDF). Recycling plastic is estimated to be worth $54 billion by 2023, which with greater investments and policy support could lead to growth and new jobs. This is just a small fraction of the larger economic opportunity: Between now and 2030, the New Climate Economy, a global commission on energy and climate, projects a $26 trillion growth potential in taking action to tackle the challenges of a changing climate, compared to sticking with business as usual.
But the question remains how to get businesses and the SDGs working together to transform business as usual into sustainable, innovative economic growth.
Public-private partnerships offer a solution by enabling mutually beneficial relationships between businesses, governments and civil society organizations that allow all parties to move forward on groundbreaking ideas by distributing risk and offering multifaceted approaches to obstacles that otherwise might suspend real progress.
For many businesses, public-private partnerships offer an attractive approach to pilot new sustainability solutions or expand into developing markets, such as those in Africa, Asia and Latin America. Governments then can support these ventures through shared investment risk, political stability and other enabling circumstances that allow private sector stakeholders to pursue innovative ideas.
And for governments, partnerships provide access to intellectual capital and investment that might not be otherwise available. Civil society groups and citizens, both globally and locally, can ensure benefits are transparent and shared equitably.
This collaboration between the public and private sectors can accelerate the use of new technologies, financial models and policies in such competitive sectors as renewable energy, food and agriculture, urban mobility, accessible water and waste management.
Already, a 2018 CEO survey on sustainability found that 66 percent of the 1,100 companies interviewed reported "somewhat" to "significant" positive impact in partnerships. And 40 percent of the CEOs reported they are targeting SDG partnerships as a purpose-driven approach to growth and profitability.
Internationally, there already exist partnerships that successfully have expanded to the global scale and steadily are sparking change within their sectors. One prime example is the Courtauld Commitment 2025.
Through the exchange of information and access to a network that spans the supply chain, the value of the Courtauld Commitment 2025 proves itself through both increased engagement and the exchange of ideas between non-governmental organizations, businesses and governments. This collective approach to one of the world’s most pressing challenges provides a roadmap for all involved regarding what needs to be done to minimize losses while meeting growing demand in the next five, 10 and 50 years.
Regarding the SDGs, the commitment makes significant strides on both the pursuit of zero hunger (SDG 2) and more sustainable production and consumption worldwide (SDG 12). When the commitment released its phase three report (PDF) in 2017, it announced the redistribution of more than 18,000 tons of surplus food and drink. While this translated into improved food access for a socioeconomically diverse set of communities, it also eliminated more than $150 million in losses across the supply chain.
Now, the Courtauld Commitment boasts more than 300 signatories invested in its charge, spreading its influence to 95 percent of U.K. food retail by market share. All involved are invested in the commitment’s next phase of work, which focuses on supplying and consuming more sustainable food products via packaging redesign and improved public knowledge. The intended outcomes are aimed towards projected fourteenfold returns on investment (PDF).
This is the sort of system change partnerships have the power to incite; and a model for the goals towards which budding partnerships can aspire.
GreenCo reimagines the role of private sector investment to make energy access more available in sub-Saharan Africa, where more than 600 million people lack access to reliable energy. The partnership acts as an intermediary between buyers and sellers of energy to optimize regional energy supply in ways that will bring private sector investment to a market where there is huge and growing demand.Collaboration between the public and private sectors can accelerate the use of new technologies, financial models and policies.
In its current stage, GreenCo is looking for buy-in from governments in pilot regions as well as private sector investment to implement its approach.
In January, it made an encouraging step forward: GreenCo received a $45 million guarantee from Agence Française de Développement to enable the partnership to provide capital protection to commercial lenders in its initial plan to fund a utility-scale solar plant in Zambia. This backing is yet another indication of how an SDG-oriented business model can begin to steer entire sectors and regions into tenable systems that outperform traditional economic designs.
These two partnerships represent models for growth functioning on entirely different scales, with the Courtauld Commitment boasting international recognition and proven success and Africa GreenCo still in pursuit of the necessary buy-in to enable its vision.
But what they have in common is this: Both partnerships build upon the opportunities set forth by the SDGs to recognize untapped market potential and demand. They are examples that finding common alignment in the SDGs and working in partnerships can provide lasting success — the goal of all good relationships.