#CSRFW: Private Sector Partnerships for Sustainable Development

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According to the UN conference on Trade and Development (UNCTAD), US$5 trillion to $7 trillion in annual investment will be required in achieving the SDGs, with an investment gap in developing countries of about $2.5 trillion.  Yet, although developed countries pledged to raise a substantial part of these figures,  total Official Development Assistance (ODA) reached a peak of only US$142.6 billion in 2016 (OECD DAC report 2017). It has become more evident that individual countries have to provide a significant share of the resources needed to achieve the SDGs.

Although the World Bank estimated that between 50 and 80 percent of what is required will have to come from domestic resources, no government can solely meet these resources.

Clearly, the success or failure of the SDGs is hinged on the integration of public and private funding, capital cum efforts and investments. It was with this projection that SDG 17, which calls for global partnership towards sustainability, is in itself a stand alone goal, necessary for the success of the entire SDGs as a whole.

Globally, several conversations have arisen around the need for a set of well-articulated and tested public-private partnerships, as well as a clamour for ending rivalry between the public and private sector in the provision of basic resources for development. Nevertheless, not much awareness has been raised on the need for private sector collaboration towards sustainable development.   Beyond public-private partnerships, the private sector has a tremendous role to play in fulfilling the objectives laid down in the SDGs as it will be impossible to achieve the SDGs without accelerating and scaling inter/intra private-sector engagement.

The imperative to eliminate poverty, avoid climate change and build inclusive societies calls for collaboration by leveraging business’ collective assets and resources as no one organisation can tackle systemic issues alone. Although, the actions by individuals are necessary, they are not sufficient to drive transformational and systemic change towards sustainable development. Moreover, despite that leading companies are celebrated for their bold actions on sustainability, risks and opportunities, one of the most important ways any business can lead is through collaboration.

Hence, companies, foundations, civil society, advisors, governments and other stakeholders need to be able to embrace collaborations designed for a particular purpose before any substantial progress can be made with sustainable development.

The Good in Private Partnerships

Companies that understand the Sustainable development Goals (SDGs) agenda and align their core business activities to addressing economic, social and environmental risks would encounter opportunities material to their businesses and those salient in terms of their potential impacts on people. Nevertheless, the ability of these companies to spread responsible practices and deliver market-based solutions for the SDGs at scale, is undermine by a variety of market failures, governance gaps, and cultural/trust impediments, which can be surmounted by sector partnerships and collaborations.

Private sector partnerships are a valuable tool to drive change towards responsible, inclusive and sustainable growth. Partnerships can serve as a platform for convening and coordinating diverse actions of numerous actors and for building mutually reinforcing linkages between different business sectors.

Partnerships are particularly crucial for addressing the following business imperatives:

  • Improving the impact of all business activities to support responsible, inclusive and sustainable growth.
  • Increasing the level of new private sector investment and innovation in sustainable development.
  • Achieving systemic transformation of markets to work better for people and the environment;
  • Building mutual trust, accountability and social contract between business, governments and civil society.

How can Businesses collaborate?

Individuals and businesses need not only show interest in collaboration, they need to be aware of the various types of collaboration that offer particularly high potential for accelerating and scaling up business engagement in sustainable development. These types of collaboration include:

  1. Strategic cooperation with business partners and supply chains: Partnerships along supply chains span relationship with suppliers, distributors, retailers, investors, clients and joint venture partners. By setting sustainable production standards with business partners and supply chains, companies can have substantial leverage in driving change towards more responsible, inclusive and sustainable growth along their own value chains. This can be achieved by creating incentives, enforcing sustainable production and supply patterns and providing financing for the supply chain, when necessary.

 

  1. Multiple private public partnerships: This usually involves a few companies partnering together with NGOs, government entities, and research organisations or each other, to develop new technologies, products, services or business models. According to the UN, technology and innovation are central to the implementation of the 2030 Agenda and the Sustainable Development Goals (SDGs). When strategically approached, research on and development of relevant technologies can be utilised in providing solutions to most of the developmental challenges within countries. In Nigeria for instance, partnerships between two or three tech companies with the government; the ministry of science and technology, as well as private research and development centres, can bring about the needed development of country specific agricultural technologies for improved crop yields, as well as Nigerian-targeted energy technologies.

 

  1. Inter-industry level CSR alliance: This could be the easiest form of partnership between private sector actors, in driving sustainable development. It involves a group of companies working together on a development challenge to drive sector wide change. The first step towards private sector participation in sustainable development is for businesses to decide what part of the goals relate most to them, identify their priorities, decide on strategies, align corporate strategies with their country’s policies and strategies, and then include these strategies in their operations. Nevertheless, a more effective approach is by utilising Corporate Social Responsibilities (CSR) practices/integrating sustainability into their existing CSR activities. Corporate Social Responsibility (CSR) involves companies’ inclusion of social and environment concerns in their business operations and in their interaction with their stakeholders on a voluntary basis, as they are increasingly aware that responsible behavior leads to sustainable business success (EU, 2002). Businesses with similar CSR/sustainability focus can therefore collaborate in delivering value. For instance, a strategic alliance on Education by different organizations investing in that space.

 

3. Intra-industry level project alliance: Apart from a collaboration between businesses in different industries, businesses within the same industry can collaborate to provide value, especially for high investment causes. For sustainability to be achieved within specific sectors, actors must collaborate to achieve goals and targets for Sustainable Development within the Nation. Therefore, organizations may collaborate to provide affordable housing/services to contribute to building sustainable cities and communities (SDG 11) or develop state of the art infrastructural facilities, to cover for Nigeria’s infrastructural challenges, whilst making profits (SDG 9).

 

For the different types of partnerships to be effective however, business leaders need to understand and be more actively engaged in examining the goals in relation to their own corporate strategies, culture and performance. When individuals/organizations, companies, civil society groups then decide to work in collaboration, they can be guided in their decisions by considering the Jane Nelson’s five blueprints that a successful collaboration should possess:

  • A compelling, common purpose that brings parties together and enables each to get value for collaboration.
  • The right partners in the right place that bring the required authority and resources to drive the collaboration forward.
  • Good governance that enables efficient and transparent decision making
  • An organizational design that is fit for purpose with resources and staffing to operate
  • Accountability to the objectives the collaborating parties have committed to.

The Next Step towards Collaboration

As an essential means to addressing sustainability issues, collaboration should find its place as a core business activity, where it needs to be developed, invested in and honed as a core capability for achieving shared success.

It is important to state that effective collaboration especially across/within sectors, requires new mindsets and skill sets on the part of individuals and new capabilities and incentives on the part of institutions. It requires patience, persistence and a long term commitment by companies and government alike.

Collaborators must also have their eyes on emerging trends that would facilitate effective partnerships. Some of these include the introduction of new technologies that accelerate more change, development of more accountable, inclusive and efficient governance models and collaboration between like-minded initiatives to reduce fragmentation, pool resources and capabilities, reach new audiences and amplify impact.

Finally, as essential as collaboration may be to the achievement of sustainable development, it is important to stress that it is not an easy path. It requires real leadership, resource investment and commitment to the long game, for efforts to pay off. Nevertheless, as we look forward to achieving the United Nation’s Sustainable Development Goals (SDGs) by 2030, it is important the nation transcends the status quo of individual actions to fostering collaboration for impact, especially amongst the private sector. Nigeria needs to leverage and mobilize the transformative power of business’ collective resources and capabilities for the attainment of the desired development.

References:

https://www.sustainablebrands.com/news_and_views/collaboration/sustainable_brands/nestle_coca_cola_among_60_orgs_stepping_action

An Introduction to Sustainable Development, 3rd Edition by Jennifer A. Elliott 2006

Partnerships for Sustainable Development – Harvard Kennedy School, Corporate Social Responsibility Initiative; Business & Sustainable Development Commission Jane Nelson

Private Sector Collaboration for Sustainable Development- The ROCKEFELLER FOUNDATION

https://stories.undp.org/honduran-women-light-the-way

http://www.undp.org/content/undp/en/home/sustainable-development-goals/goal-17-partnerships-for-the-goals.html

 

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