Introduction
On September 25th 2015, 193 world leaders will commit to 17 Global Goals to achieve 3 extraordinary things in the next 15 years. End extreme poverty; Fight inequality & injustice and Fix climate change. There is going to be a massive media campaign – you might notice it in the next week or so.
Of course the world leaders would sign up to them, but are they anything more than motherhood and apple pie? Is anything really going to change and how will it affect business?
The simple fact is that they will affect everyone. If these issues are not addressed in a controlled way there is likely to be an uncontrolled fallout to the detriment of everyone. So yes, things are likely to change!
The big three!
- Extreme poverty
According to Oxfam the richest 20% per cent of people own 94.5% of all the wealth in the world. Astonishingly, the combined wealth of the richest 1 per cent will overtake that of the other 99 per cent of people in 2016. I guess it is not surprising that we have a migrant issue in Europe at the moment – because all the wealth is here! From a business perspective the areas of fastest growth are often those which start from the lowest base.
In 2013, six of the top ten fastest growing economies in the world were in Africa, countries which are rich in natural resources growing political stability and maturing institutions. EY’s Africa Attractiveness 2015 report (http://www.ey.com/Publication/vwLUAssets/EY-africa-attractiveness-survey-2015-making-choices/$FILE/EY-africa-attractiveness-survey-2015-making-choices.pdf) states that Ethiopia, Kenya, Tanzania, Mozambique, Zambia and Cote d’Ivoire are among 22 economies in Sub Saharan Africa that are expected to grow by more than five percent this year. Investing in some of the poorest economies can generate significant returns to business.
- Gender inequality
The World Economic Forum in its Global Gender Gap Report 2014 estimates it will take until 2095 to achieve global gender parity in the workplace. Eighty more years of talent pipelines and professional promise not fully realised. In addition addressing gender inequality will have significant benefits to wider society.
For example, according to Vodafone’s Connected Women Report (https://www.vodafone.com/content/dam/connectedwomen/pdf/VF_WomensReport_V12%20Final.pdf) increasing the rate at which women become mobile phone owners and ensuring that the gender gap in mobile ownership does not grow, could have an economic benefit for women and society worth $22.3 billion. These projects demonstrate that when women have access to mobile technology and services they use it to improve their own lives and those of their children and communities.
- Climate Change
According to the Lancet Commission study published in June this year, climate change poses such a threat to public health it risks undoing the gains of the past 50 years (http://www.thelancet.com/commissions/climate-change) . The number of reports on the impact of climate and resource scarcity from eminent scientists, multiply each year. They all have a consistent theme - it is happening and we need to do something about it. The cost of adapting to climate change for developing countries will range from $70bn to $100bn per year through to 2050, according to a World Bank reporthttp://www.worldbank.org/en/news/feature/2011/06/06/economics-adaptation-climate-change . This call to action is increasingly being supported by business and religious leaders and significantly, investors. According to the Economist Intelligence Unit Report published in June 2015, the value at risk to manageable assets from climate change is calculated at US$4.2trn, in present value terms. http://www.economistinsights.com/financial-services/analysis/cost-inaction
The Global Goals
And so we come to the global goals and the response needed from business. The 17 global goals or sustainable development goals (SDGs) contain 169 targets.
How should business respond?
Business needs to embrace the fact that the world is changing - the future will not look like the past. It presents both exciting opportunities and sobering risks.
And yes, there are big systemic changes that need to occur to enable businesses to operate differently. There are important debates about the nature of capitalism as an engine of sustainable or inclusive growth, but while these debates are happening businesses need to act differently, now.
The annual investment requirements needed to achieve the new Global Goals is estimated by the UN at approximately £1.6 trillion every year for the next 15 years. Much of this will come from the private sector which is the greatest engine of wealth creation in the world. This may come through changes in the tax regimes as governments seek to generate revenues needed to address the targets that they have signed up to. Pressure will also come from an empowered civil society for businesses to do more to address these pressing goals.
Businesses need to use its main levers of growth to support these targets - the time for CSR or sustainability initiatives that are separate from business strategy is past. Businesses need to work out over the next 15 years how they are going to do well by doing good. Business leaders need to have a clear understanding of which of the 169 targets they can influence and develop new partnerships and strategies to achieve both business goals and Global Goals. And then, businesses will need to work out how to measure their impact! All this in a way that is commercially rational - motherhood and apple pie it certainly is not!
Post A Comment:
0 comments: