Why Oxfam won't compromise on SDGs

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Shutterstockegilshay
How can companies restructure their supply chains to comply with the SDGs?

This article originally appeared at Corporate Citizenship as part of its "Leader Insights Series: Business Action on the Sustainable Development Goals," written by leaders from across industries and sectors. The full series appears here 

Companies must be at the heart of turning around the multiple crises we face today.

Spiraling inequality, hundreds of millions trapped in poverty, a climate crisis out of control and decreasing share of GDP going to workers all indicate that "business as usual" is taking us in the wrong direction.

Companies need to transform their core business models. The way in which the value generated in the business is shared among workers, farmers, communities, society and shareholders must change if we are to live up to aspiration of the SDGs. Cocoa farmers used to get 16 percent of the value (PDF) of a chocolate bar in the 1980s, for example, but today they get less than 6 percent. Measuring the share of value going to the poorest is essential to understand the impact of business. Companies should look into who they do business with, how they negotiate with their suppliers, what prices and wages they pay their workers and what they pay for their inputs.

Companies should not "cherry pick" the SDGs they want to focus on while ignoring others that don’t meet their corporate priorities or are more difficult and uncomfortable. The SDGs on poverty and inequality, for example, do not make it to the SDG priority list of companies (PDF), despite being heavily affected by business actions. Business action on the SDGs should be based on a sound analysis of where the company has the greatest negative and positive impact.

Finally, business can be a powerful positive voice to ensure governments regulate for the common good, for example in calling for high climate ambition in the run up to the climate deal in Paris in 2015. However, we often see business associations lobbying for the opposite, driving a race-to-the-bottom between countries on issues such as lower taxes and deregulation to attract private investment. Instead, companies actively should support the role of government to enforce high social and environmental standards and commit to full tax transparency and paying their fair share of taxes.

New trends on SDG 17: Partnerships

Oxfam values the role of partnerships in the context of the SDGs, but they can only be second to the transformation needed of the private sector’s core business. Oxfam regards constructive and critical engagement with the private sector as a key part of its mission to eliminate poverty and injustice. 

Many food and beverage companies have taken on ambitious policy commitments after Oxfam raised consumer interest on a range of issues through our Behind the Brands campaign, from women’s rights to land-grabbing and climate action. Some of these companies have become champions on these issues, changing their policies and practices and helping to increase the political space for necessary government action.

We are encouraged by the increasing awareness in many corporations of the societal and environmental impact of business on communities and a growing willingness to speak out. A number of leading progressive businesses are seeking to internalize sustainability into their corporate DNA. Oxfam has worked with several companies to address key structural inequalities in their business models.

For example, five years ago, Unilever opened up its business to Oxfam in unprecedented ways, so that Oxfam could understand how it managed labor rights on the ground. As a result of the findings, the company undertook a range of actions, including a "sustainable living" review in 180 countries and a reduction in casual labor. Work on further improving standards is ongoing. Tackling labor issues in the supply chains is one way companies can begin to address inequality.

By investing in collaborations for change, Oxfam is committed to not giving up its right and duty to publicly challenge company actions when they threaten the wellbeing of vulnerable people and communities. We will continue to ensure that legal obligations are met and codes of conduct are strong and enforced.

Effective collaboration between business and NGOs on SDGs

The change we need to see to meet the aspiration of the SDGs is nothing short of transformational — hence, in proportion, the challenges are large too.

Trust, transparency and accountability are important components of successful collaboration. They are by-products of all members sharing goals and commitment to tackling intransigent problems. The prerequisites for progress include: an openness to know and show impacts across company actions, both direct and indirect; ensuring adequate resourcing is in place to meet the challenges; and internalizing SDG objectives in the corporate mandate.

For Oxfam, it is paramount that vulnerable communities affected by business actions, particularly women, often at the bottom of the supply chain, are given adequate space and accountability in partnership processes.

Collaboration also must go hand-in-hand with ambition. While it can be difficult for companies to face up to root problems and examine their business models, these are essential for effective collaborative working. While there are many wins for companies in behaving more sustainably; they should also look beyond the business case as not all sustainable actions are aligned with the short-term bottom line. In particular, it is important for companies to understand that doing great on one issue does not mitigate negative impacts elsewhere.

Where business is called upon to help close the funding gap to meet the SDGs, it is paramount that this goes hand-in-hand with strong safeguards and standards, so that no harm is done to communities and the environment.

Opportunities for businesses

Business has been losing trust and its social license. To reverse this, it must seize the opportunity of the SDGs to transform business models into one fit for the 21st century where economic, social and environmental sustainability is central. Oxfam believes that this is possible, and that good practice is starting to emerge, often in collaboration with NGOs.

NGOs such as Oxfam can help companies to take their sustainability thinking to the next level in terms of ambition and vision. We are experts on sustainability issues and what they mean for business, and can point to leading business models and examples where a difference is being made, such as business models where farmers’ own businesses capture more value through processing or other value-adding activities. Business models that squeeze value away from farmers and workers must be transformed so that farmers and workers can thrive.

Ultimately, we see our role as a critical friend — keeping business honest and holding its feet to the fire while stepping in and playing a supportive role where there is a real commitment to ambitious change. We are a worldwide network with links to many countries where companies source from or sell to, and are able to ensure that companies’ sustainability work is relevant and effective in these countries.

Following on from the Behind the Brands campaign, which aims to improve policies in the food and beverage sector, we are also following up company commitments across several themes and several countries.

Leadership to go beyond 'business as usual'

Responsible business leaders and managers understand the broader role of the corporation in today’s society, help generate a new vision for the global economy and go beyond a short-term focus on shareholder gains.

They are able to make the business case for responsible business behavior, but at the same time have the courage to go beyond, and frame a role for business that contributes to internationally agreed goals and standards. They do not cherry pick sustainable development goals which are an easy fit with the existing business model, but dare to go further and question business models based on extractive relationships that drive a race to the bottom.

Responsible business leaders also challenge their peers in the sector to make a step change towards the SDGs, raising the bar for all by working towards making intransigent issues such as living wages a non-competitive issue. They do not fear challenging laggards and work towards building a critical mass for change.

The leaders we need to help us meet the aspiration of the SDGs will come from a more diverse cultural and sectoral background — female leaders are particularly crucial. We need leaders who are committed to transparency and public accountability, and are uncompromising in their commitment to gender equality in all their operations. We need leaders who are open to innovation and embracing alternative business models, but who also use their access and influence wisely with states and governments to publicly call for governance that upholds and advances human rights and environmental care.

This may appear a daunting set of leadership demands, but we know we will need them to get to our goals. Luckily, we also know that many business leaders out there have the passion and the qualities required to help make this change a reality.