The Business & Sustainable Development Commission (BSDC) launched a report “Better Business, Better World” on January 16 that highlights opportunities for sustainable business activity that could be worth $12 trillion by 2030.
For the first time in decades we have an opportunity to radically reshape our approach to business. Without the demystification, failures, and disruptions of the past decade global business and political leaders would never have been ready to embrace the changes that they must adopt to achieve sustainable global development. Similarly, the democratic engagement we are seeing in the West and demand for reforms we are seeing in the South creates an opportunity for the emergence of new leadership and higher levels of accountability.
Luckily for us there exists a blueprint we can follow to draw roadmaps for individuals, businesses and governments to ensure that this period of disruption leads to the right outcome: the UN’s Sustainable Development Goals (SDGs), 17 goals and 169 targets for the world to achieve sustainable development, which boil down to over USD 10 trillion in global growth.
For the past year, the Business and Sustainable Development Commission (BSDC) has been compiling a detailed analysis of the business case for the SDGs; the hypothesis being that there was one. The results of the studies clearly show that those companies that do not focus on SDG related business models are unlikely to survive the next two decades, whereas positively, those that do will share in a growing trillion-dollar market and contribute to global stability and prosperity.
The report can be used as a starting point for and justification of the investments that the private sector must make to realize these benefits. It is also highly practical, for example, looking at just four sectors; food and agriculture; cities; energy and materials; and health and wellbeing; the BSDC highlights opportunities for sustainable business activity that could be worth $12 trillion by 2030, and includes case studies of companies making the most of their first mover advantage.
Refreshingly, the SDGs empower people, businesses and governments, highlighting how each stakeholder can contribute to their achievement in their own way. The BSDC report does the same thing for the private sector – companies are freed to pursue business models suiting their near and long-term objectives, anywhere in the world, in any sector. This report highlights a vast array of opportunities for investment, optimisation, and revenue growth, compelling businesses to pursue them aggressively. As an example, development finance institutions which for years have been unable to find “bankable projects” in high growth low income countries now have a base on which they can redefine bankability, invest with local private sector companies and achieve their ultimate objective of ensuring sustainable global growth.
Jeff Immelt, Chairman and CEO of GE, is already ahead of the curve on this type of thinking. Immelt’s article in TIME, published December 2016, articulates the need to break the limited investment and outsourcing strategies favoured by multinationals and instead embrace true globalization –long-term investment in high-growth markets, local partnership and mutually beneficial contracts. This inevitably leads to higher profits and stimulates growth in the parts of the world that need it most. As Immelt points out, this is already happening, we know it works. Emerging market growth rates are still twice as fast as those in the US and demographic trends mean this gap is likely to increase over the next decade.
Local private companies in these high growth low-income countries have not been idle. The banking, technology and oil and gas sectors in Nigeria are testament to this. These sectors are becoming dominated by local private companies after only two decades of democracy, despite 100 years of foreign and/or governmental monopolies. Nigeria still has a way to go, but it is clear that if the international business community fails to engage with the legitimate private sector in Nigeria they will find themselves squeezed out of what will be one of the largest markets in the world by 2030.
Collaborating with real local companies to build domestic capacity through investment in infrastructure, human capital, manufacturing and technology is essential to accelerate the shift to sustainable global development. Recognizing there are capable hands on the ground in these markets, the BSDC’s new report also suggests that sector peers should work with regulators and governments to shape public policy in a manner that leverages the power of business to drive sustainable growth.
How quickly business leaders take action and embrace new economy business models highlighted by the report will dictate the time it takes for inclusive, prosperous societies to become the norm. It will also dictate the extent to which populations crying out for change latch onto destructive solutions.
BSDC’s report is only a first step for the commission, but it comes at an opportune time when the world is ready to pursue credible new strategies that will set us back on a path of global peace and prosperity. Happy 2017.