Private sector should take the lead in investing in SDGs
Last week, Prime Minister Narendra Modi and external affairs minister S Jaishankar spoke at length at different forums (the PM at United Nations General Assembly and Jaishankar at Asia Society) on how the world’s largest democracy has embodied the SDGs in its work towards “peace, development and progress in the world”. On October 2, if reports are to be believed, the PM will declare India open defecation free (ODF), which is surely impact several SDGs.
Last week, Prime Minister Narendra Modi and external affairs minister S Jaishankar spoke at length at different forums (the PM at United Nations General Assembly and Jaishankar at Asia Society) on how the world’s largest democracy has embodied the SDGs in its work towards “peace, development and progress in the world”. On October 2, if reports are to be believed, the PM will declare India open defecation free (ODF), which will impact several SDGs. India is central to the SDG because if the country doesn’t reach the goals, the world will also fail to do so.
One of the key aspects of the Sustainable Development Goals (SDGs), a global road map signed by 193 countries in 2015 for building a sustainable, equitable and prosperous world by 2030, is private sector participation. It was clear from the beginning of the SDG journey that the world will not reach the ambitious goals without the active participation of the private sector because national governments don’t have the wherewithal to meet those promises on their own.
According to the United Nations, there is an estimated SDG investment gap of $2.5 trillion per year in developing countries. But financial investment is not that only thing that national governments are looking for from the private sector. They are also looking at the private sector to pitch in with their creativity, know-how, innovation and technology to help nations reach the goals.
Step up to the plate
Unfortunately, many companies in India, and the world, still don’t understand the value in participating in the SDG process.
According to The Decade to Deliver: A Call to Business Action, by The United Nations Global Compact-Accenture Strategy CEO Study on Sustainability 2019, around 33% of global business leaders, who until three years ago saw integration of Sustainable Development Goals (SDGs) as a business opportunity, are shying away from adopting them.
According to the study, currently 67% of CEOs see sustainability as a window of opportunity to recalibrate their efforts in line with the global milestones. This number was 90% in 2016, according to the report. Small- and medium-sized enterprises (SMEs) are majorly responsible for this overall drop in perception. Around 63% SMEs cite a lack of financial resources as the main impediment, according to the report. Earlier this year, NITI Aayog also said that corporations need to play a greater role in achieving SDGs.
So the obvious question is: Can private firms gain from participating in this development process?
A lot, says companies that already have “repay” plans in place, and are aligning their plans to SDGs.
“If you look back in time, businesses have sought to address one issue: How to solve the problems of human beings. Now we have reached a stage, we must focus on the big problems of human beings. Otherwise corporations will not be able to sustain profits. We need to focus on what are the unmet needs of the under-served categories, and innovate in the products and services category,” Rajeev Dubey, group president, HR and Corp. Services, Mahindra Group, told HT.
Anirban Ghosh, Chief Sustainability Officer, Mahindra Group, says that the group believes there are many problems are large and chronic and the solutions must come from the core businesses of a company. So when their manufacturing plant at Igatpuri, Maharashtra, become water sufficient, it was good news for the agricultural community who live around the factory because they also gained from improved water level.
Importantly, Nidhi Pundhir, director, HCL Foundation, says that businesses should not forget that they generate employment and create wealth by using a nation’s human and natural resource base, and, therefore, it is only proper that they also give back to society.
Here’s an example which explains why companies must understand that they cannot operate in isolation: A few years ago, a paint company in Gujarat was planning to introduce water-based paints, along with its existing range of solvent-based paints. Before starting production, they checked the groundwater around their plant, and found that there was a severe scarcity and also that the quality of water was not up to the mark. The company had to scrap their expansion plans.
“The example shows that companies need to evaluate their projects from the risk and security approach [social and environmental], and not from just the ROI perspective,” Anand Krishnamurthy, co-founder, Envint, a sustainability services firm explained. In addition, he added, companies need to understand that corporate social responsibility (CSR) is different from sustainability, the later needs to be a part of a company’s core strategy.
Companies also need to look at their SDG strategy because, along with the moral push, there has been an increase in pressure from regulators, investors and media to align their policies with global goals.
Last, on Mahatma Gandhi’s 150th anniversary, what better tribute can the private sector offer other than taking up the causes of sustainability, inclusivity, and equity.
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