United Nations Sustainable Development Goals (SDGs) - Why are the SDGs relevant for the Private Sector?
22 April 2016
The private sector has an inherent interest in sustainable development.
As the world grows more interconnected, businesses and investors are realizing that their own success depends on stable and prosperous societies around the world.
Social tensions, economic fragility, and environmental damage are acute threats to the private sector. These challenges could directly affect their bottom lines. They pose both risks and opportunities.
But many businesses are simply unaware of what Agenda 2030 is seeking to accomplish.
While the private sector has a natural affinity with the SDGs, it's up to us to spell out exactly how businesses can best contribute in certain areas.
This involves turning the question around: From how the private sector can benefit from the SDGs to how the SDGs can benefit from the private sector.
In order for the LDCs to meet the SDGs, they will basically have to outperform China's top 15 years of growth performance. This will require meeting a $2.5 trillion financing gap in developing countries. And this will not be possible without the contributions of the private sector.
Let me mention five examples from UNCTAD's own work.
First: FDI
Through expert meetings and research, UNCTAD has identified SDG-relevant sectors that would benefit from FDI.
And at our World Investment Forum - one of the largest of its kind in the world - UNCTAD promotes reform of the international investment regime to make FDI more predictable and productive.
Second: Finance and the financial industry
UNCTAD recognizes the role of the financial industry in the SDGs.
Stock exchanges have a strong record of providing capital to risk takers with innovative ideas. Businesses that start in a garage can end up among the largest companies in the world, thanks in large part to the financing mechanism of stock exchanges.
Thus, stock exchanges can encourage new SDG-themed indices and other financial products to channel investment into those areas.
UNCTAD's International Standards of Accounting (ISAR) intergovernmental working group also works towards non-financial reporting standards that promote development in all of its dimensions.
Third: Digital economy
ICTs will have to play a significant role in achieving the SDGs, but we won't get anywhere without the support of the private sector.
Fortunately, the private sector is highly active in accelerating the digital economy for development. This week, we've been hosting the second-ever E-Commerce Week at UNCTAD, and the turnout has been phenomenal (Facebook, UPS, Alibaba, and several leading industry associations).
Our proposed initiative is Aid for eTrade: a more concerted approach involving stakeholders from private sector, international organizations, and governments to increase e-commerce up-take in the developing world.
Fourth: Competition and consumer protection
Development relies increasingly on competition and consumer protection policies that facilitate inclusive gains from trade.
It would be a mistake to equate the "private sector" with "individual companies."
Government policies in the areas of competition and consumer protection have an important role in fostering open and contestable markets that allow the private sector to help deliver on the SDGs.
Fifth: Science, Technology, and Innovation
To name one final example, UNCTAD also performs Science, Technology, and Innovation policy reviews that make private sectors more conducive to inclusive growth.
By promoting local absorption of new technologies, supporting innovation clusters, and by forging links between universities and corporate R&D centers, developing countries can accelerate their development through improved competitiveness.
By spelling out the connection between the SDGs and the interests of the business community, we can secure their support for Agenda 2030.
This task is essential. Without the contributions of the private sector, we will not come close to achieving the scale necessary to achieve the SDGs.
