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On March 20th, 1987, former Norwegian Prime Minister Gro Harlem Brundtland sat down to author the chairman’s forward for Our Common Future. The report, commissioned by the United Nations, was intended “to re-examine critical environmental and development problems around the world and formulate realistic proposals to address them”. On that day, Brundtland wrote “the environment is where we all live; and development is what we all do in attempting to improve our lot within that abode. The two are inseparable”.
Since the publication of the Brundtland Commission Report, radical environmental attitudes have been largely replaced by reformist ideas contained within sustainable development. Sustainability has become the most dominant environmental discourse, replacing the prevailing survivalist viewpoints of the 60s and 70s (see Silent Spring & The Limits To Growth). Today, corporate responsibility professionals work within organizations to introduce policies, procedures and business practices that reduce negative environmental and social impacts – a marked departure from large environmental protests and concerts like Amchitka that launched Greenpeace in 1970.
The widespread use of terms like conscious capitalism, fair trade and certified organic are also testament to the fact that sustainability has had a similar appeal with the general public. A 2016 Pew Research Center poll in United States found that an incredible 75 per cent of Americans now express environmental concerns when asked about their daily lives.
Why Haven’t We Achieved Sustainable Development Then?
Despite environmentalism’s growing appeal and private sector engagement with sustainability, many of the world’s most significant social and environmental problems remain unsolved. One needs to look no further than the United Nations Sustainable Development Goals (SDGs) for proof. The SDGs, also known as the Global Goals or 2030 Agenda for Sustainable Development, are a collection of seventeen north-star goals ranging from poverty elimination to climate change.
The Global Goals are testament to the fact that in many regions, people still lack access to basic services like clean water, sanitation, family planning and reliable communications (among others). Similarly, environmental challenges such as climate change, biodiversity and habitat loss (for both aquatic and terrestrial ecosystems) need urgent attention to halt and reverse decades-long declines.
Environmental economists often point to market failures for these shortcomings, but it is also important to remember that the corporate sustainability profession is a relatively recent development. Each incremental evolution in best-practice has represented a new way to extract stakeholder value from sustainability. Less than five year ago, leadership was defined by LED retrofits, paper reduction campaigns, corporate green teams and a triple bottom line approach. A focus on supplier engagement, materiality assessments, sustainability reporting and disclosure programs followed soon afterward. No summary of corporate responsibility trends would be complete without mentioning creating shared value, the rise of responsible investment and corresponding demand for corporate ESG data. Despite their various contributions to the field of corporate responsibility, the next era of sustainability leadership will generate social impacts on an entirely different scale.
Reasons To Be Optimistic About The Next Decade of Sustainable Development
Increasingly, industry voices are calling for entrepreneurs and corporate intrapreneurs to create profitable (and scalable) solutions. Project Breakthrough, co-developed by Volans and the United Nations Global Compact, is one such leading example. Increasingly, venture capital firms – like DBL Partners, Acumen and Chrysalix – are investing in companies that solve social and environmental problems via their business models. Acumen has invested USD $65 million by funding more than 100 companies that serve low-income customers in 13 countries. DBL Partners manage two funds, collectively worth USD $225 million. To date, they have invested in 45 companies across four key sectors (clean technology, health care, information technology, and sustainable products & services).
High-profile billionaires Bill Gates, Jeff Bezos and Mark Zuckerberg have also taken notice of SDG-related opportunities. Their venture capital firm, Breakthrough Energy “… links cutting-edge, government-funded research to patient, risk-tolerant capital so that more clean energy innovations get to market faster”. Supported by commitments from ultra-high net worth individuals, the fund has pledged to invest more than USD $1 billion to finance next-generation, carbonless technologies.
Leading corporate citizens have also created in-house venture capital firms to support their environmental and social goals (Patagonia’s Tin Shed Ventures, IKEA GreenTech and The Unilever Foundry are among the most well-known examples). A recent Volans report titled Investing in Breakthrough Corporate Venture Capital suggests that firms like these are helping to “… transform the way we collectively think about global challenges — [by bringing] promising, viable and effective solutions to scale”.
Concurrently, the hunt is on for innovative financial structures that can support the development of these companies. The Rockefeller Foundation is currently working to develop ten financial structures, dubbed SDG Finance Unicorns, that can “… mobilize at least USD $1 billion each for sectors key to meeting the Sustainable Development Goals”. This new combination (SDG venture capital and innovative SDG finance) indicates that we are likely to see many more companies like Off-Grid Electric and Bird that combined, have raised more than USD $400 million in private investment.
Off-Grid Electric’s pay-as-you-go solar panel leasing service currently has 50,000 customers across Tanzania, Rwanda, Côte d’Ivoire and Ghana. By allowing customers to pay for solar energy in installments (via mobile payment technology), Off-Grid Electric has reduced kerosene lamp use, increased access to energy and reduced direct GHG emissions. Bird, an electric scooter-sharing technology company, is currently valued at more than USD $1 billion. Customers can rent a scooter via their mobile app for $1, plus 15 cents for every minute. With more than half-million rides completed since September 2017, Bird has reduced travel related GHG emissions by creating a market based solution to public transit’s last mile problem.
Rather than focusing on the cost of achieving the SDGs, sustainability professionals should consider their enormous market potential as indicated by the examples above. The authors of a recent Business Commission Report titled Better Business, Better World: The Business Case for the Sustainable Development Goals came to similar conclusions. According to their analysis, “achieving the Global Goals will unlock USD $12 trillion in new market opportunities by 2030”. Given the opportunity for positive impact and profit, can your company afford not to embrace sustainability best-practices? Can it afford not to be an SDG leader?
A Competition To Recognize The Next Era Of Sustainability Leadership
At last, corporate responsibility best-practice has embraced Gro Harlem Brundtland’s central message of inseparability (expressed in updated terms as profitability and impact). Entrepreneurs, corporate intrapreneurs and investment firms are at the leading edge of this new wave of change. Collectively, they will create innovative, scalable solutions that create a better, more prosperous world.
The SDGs are becoming a common language for describing new sustainable market opportunities and corporate responsibility efforts. A recent PwC reporting challenge found 62 per cent of the top 5,000 global brands currently use the SDGs in their annual or sustainability reports. Despite the rapid rate of adoption, further private sector engagement and investment based on the SDGs framework is still urgently needed.
The Global SDG Awards was recently launched to support this new era of sustainability leadership – specifically, by driving private sector SDG engagement through competition. Our mission is to create a race to the top and to inspire others with examples of next generation sustainability leadership. Over the past year, more than 65 private sector sustainability leaders from 17 countries and 4 continents have volunteered to support this vision.
With a peer-reviewed methodology, the submission questions were developed to reflect the best-practices outlined in previous sections of this article. Our three pillars include: a) positive impact (metrics determined by SDG indicators and key themes), b) potential for scalability and c) magnetism and inspiration. Starting on August 1st, 2018, companies from across countries and sectors will compete for seventeen annual Global SDG Awards. The awards will shine a spotlight on what is possible – private sector solutions that are creating a better future for each and every one of us.
David A. Klar is Founder & Executive Director of The Global SDG Awards, a non-for-profit corporation created to increase private sector engagement with the United Nations Sustainable Development Goals (SDGs) through competition.