I am honored to speak at tonight’s celebration of three inspiring champions of sustainable, responsible, and inclusive business. My thanks go to the Business for Peace Foundation for its promotion of sustainable business practices around the world, and to the City of Oslo for hosting us tonight.
This is the first Business for Peace award since the launch at the United Nations last year of the 2030 Agenda for Sustainable Development and the seventeen Sustainable Development Goals (SDGs). In place now is a bold and universal agenda which responds to the volatile and unpredictable times in which we are living. Yet, these are also times of opportunity. Hundreds of millions of people have emerged from extreme poverty; access to education has greatly increased for both girls and boys; the spread of information and communications technology is helping to accelerate human progress; and scientific and technological innovation is driving areas as diverse as medicine, environmental protection, and energy.
How the private sector actually does business has a major impact on whether growth and development are inclusive and sustainable. On average, the private sector accounts for sixty per cent of GDP, eighty per cent of capital flows, and ninety per cent of jobs in developing countries. By adopting sustainable practices, companies can also gain a competitive edge, increase their market share, and boost stakeholder value. Embracing the values and aspirations of the SDGs is how companies will succeed in the future, and is an idea whose time has come.
We are now hearing of a number of companies incorporating the SDGs into their corporate mission statement, because they believe that future business success will depend on being inclusive and sustainable.
The SDGs were finalized after three years of discussion with governments and with all sectors of society, including the private sector. Last year, a PriceWaterHouseCoopers (PwC) survey looked at the level of business awareness of the SDGs. It found a 92 per cent level of awareness in the business community surveyed, compared to 31 per cent in the public at large. Seventy-one per cent of business participants in the survey said that they were already planning how to respond to the new global agenda. We now need businesses to drive these changes forward.
There is a clear business case for aligning companies’ vision and practice with sustainable development:
o The growing demand for environmentally friendly products and services has already created new markets and opportunities in which the early mover entrepreneurs are reaping rewards.
o The Nielsen market research company in 2014 found that 55 per cent of online consumers surveyed from sixty countries would pay more for products and services provided by companies which are committed to positive social and environmental impact.
o Many companies have committed to inclusive business models, including by developing commercially viable products and services which improve the lives of people living on under USD8 per day – that’s half of the world’s population which can benefit from scaling up such initiatives. To date, 155 companies have made pledges through the Business Call to Action (BCtA) – a global alliance hosted by UNDP. They have undertaken to produce affordable goods and services, generate more jobs, and integrate low-income producers into their value chains as suppliers.
o Financing is increasingly favouring sustainable investments. For example, vast areas of tropical forest have been cleared for palm oil production over the years. But now, companies representing over ninety per cent of the market share of palm oil have committed to removing deforestation from their supply chains by 2020. The message is: don’t even bother deforesting for palm oil production – there will be no market for such a product. Now the aim is to expand this approach into other areas of commodity production – soy and beef production are obvious candidates.
o The private sector can also contribute to achieving development results at scale. For example, the Global Vaccine Alliance (GAVI) is a specific, task-focused, and results-driven partnership of government, business, and civil society. It has helped developing countries to prevent more than seven million deaths and to immunize an additional 500 million children since 2000. In support of GAVI, companies have invested in manufacturing capacity to ensure quality vaccines and reliable supply, provide training on how to administer vaccines, and bring vaccine price stability to the global market while also providing vaccines to developing countries at discounted prices.
Governments have critical roles to play in putting in place policies and regulatory environments which encourage businesses to support achieving the inclusive and sustainable growth required to achieve the SDGs.
Here in Norway, the sovereign wealth fund, which is the biggest in the world, is divesting from energy companies which derive more than 30 per cent of their revenues from coal, and from companies in other sectors which do not comply with their ethical guidelines.
In addition, Norway has led the way in launching a National Action Plan on the UN Guiding Principles on Business and Human Rights. It ensures that companies will exercise due diligence and assess human rights-related risks in the context of their operations and investments.
Last year, the G20 countries, together representing 80 per cent of the world economy, endorsed an Inclusive Business Framework which encourages governments to support and create incentives for business activities which help the poor. A new global platform has been launched by G20 to support the strengthening of national policies and the capacity of policy makers to drive this forward.
UNDP’s Green Commodities Programme, established in 2009, addresses threats to agriculture from climate change, water scarcity, and ecosystem degradation while also seeking to lift the incomes of smallholder commodity producers.
This programme operates in ten countries, including Costa Rica which had rapidly scaled up its pineapple production from just a few farms to reach sixty per cent of the world’s production with annual exports of USD 800 million by 2012. The manner of this rapid growth, however, led to dangerous chemicals seeping into water sources, soil erosion, concern about workers’ rights, and conflicts between producers and buyers.
In response, the Government, supported by UNDP, set up a National Platform for the Responsible Production and Trade of Pineapple. This coalition includes big buyers, NGOs, consumers, trade unions, and small-scale producers. Together, they reached an agreement to find and implement solutions to deal with adverse agriculture runoffs, roll out good practices of benefit to small farmers, and promote fair labour policies.
There is reason to be optimistic about trends in inclusive and sustainable business, but much more needs to be done. Continued leadership is required to:
o create conditions which promote viable business opportunities, such as green energy solutions which are affordable to the poor who now represent a market of more than $5 trillion;
o put in place regulations and policies which promote sustainability; for example, by eliminating fossil fuel subsidies, phasing out the use of harmful substances and cutting greenhouse gas emissions, and incentivising investment in renewable energy and energy efficiency;
o continue to promote financing which favours sustainable investments and financing to support SDG implementation more broadly. While money isn’t everything, big ambitions require big investments. The UN Conference on Trade and Development (UNCTAD) has estimated that to achieve the SDGs by 2030 in key sectors, developing countries will require investment of between USD 3.3 trillion and USD 4.5 trillion every year;
o educate consumers to demand transparency and sustainability; and
o establish new business models and new and innovative partnerships. Every country has work to do in order to achieve the SDGs. Every business has a part to play.
And this is where this year’s cohort of Business for Peace Honourees come in: Sarah Beydoun of Lebanon; Tore Laerdal of Norway, and Jennifer Nkuene Riria of Kenya.
Each of these honorees has already provided inspiration to other businesses in their own sectors and countries. They have shown leadership, promoted inclusion, and designed new solutions.
Business for Peace awards can count on UNDP support for their efforts to rally business engagement with the SDGs. We are committed to ensuring that everyone has an opportunity to contribute to and to benefit from development. It is only by working together that we will create a better world – for people and planet.
Let us all commit to building on the “Oslo Pledge” and to mobilizing many more business leaders to become partners in achieving the SDGs. UNDP looks forward to a continuing relationship with Business for Peace to do just that.