BUS604: Innovation and Sustainability

Companies that see the business case – as well as the moral imperative – for achieving all the Global Goals will take a "Global Goals lens" to every aspect of their business strategy to change the way they operate and put more focus on inclusion. There are several toolkits to help companies do this. For example, the SDG Compass report, produced by the Global Reporting Initiative, the UN Global Compact, and the World Business Council for Sustainable Development, explains to businesses and their stakeholders how the Global Goals affect them and offers practical tools for integrating the goals into corporate strategy.

Changing the way business operates. To align business with the Global Goals, businesses will incorporate them not only into their strategic planning, innovation, and business development but every other activity as well, from investment and operations to marketing, talent management, and communications. Taking this holistic approach extends companies' strategic horizons, encouraging decisions and investments that will deliver long-term gains as the trend towards sustainability gathers pace. 

To change the company mindset fast, companies may appoint a board member accountable for leading on the Global Goals opportunities and priorities. Some may go further and specify different board members to lead on "clusters" of the 17 goals most relevant to the business and where the business can have most impact.

Box 2: Ericsson executives champion the Global Goals 

World leader in communications technology and services Ericsson has assigned an ambassador from the executive leadership team to each Global Goal, making that person a visible champion for innovation and action in his or her area. The Chief Legal Officer, for example, in charge of Global Goal 16, is promoting peaceful societies and access to justice, and has convened a global peer legal network on these issues. Ericsson says its approach to the Global Goals is helping to embed sustainability and awareness of responsible business practices at all levels of the company. By tying these challenges directly to executive responsibility, the operator has made the Global Goals framework relevant to day-to-day priorities, a move it says is helping it seize new market opportunities that align profit with public benefit. 

Focusing on inclusion. Incorporating the Global Goals into business strategy promotes those goals aimed at meeting basic needs and extending social and economic development to those now marginalized. The result will be an increased focus on inclusion in everything a business does. Business can be powerfully inclusive not only as a creator of jobs with decent work and conditions but also as a developer of inclusive services and other innovations that improve the lives of the very poorest. Three quarters of the world's absolute poor live in rural areas, where many company supply chains begin. Sustainable company leaders look for ways to support their smallest and poorest suppliers. They work with them to improve their productivity, invest in their skills, build their resilience, improve their access to credit, and as far as possible, ensure that no one is left behind. The ten principles of the UN Global Compact, developed to help businesses do the right thing, is a helpful guide here. And business can do a great deal to promote inclusion through business innovation. (See Box 3: How businesses are promoting financial inclusion). 

Box 3: How businesses are promoting financial inclusion 

Several financial service firms, often with digital partners, are extending the financial system to people on low incomes previously denied its benefits: a safe place to save, insurance to manage household and business risks, credit and payment platforms. Between 2011 and 2014, 700 million people became account holders at banks or other financial institutions for the first time, reducing the number of "unbanked" adults by 20 percent to 2 billion people, according to the World Bank. In Kenya, 43 percent of GDP in 2013 flowed through Safaricom's M-Pesa system, which supported over 237 million peer-to-peer transactions, more than any other such system in the world.

Finance companies are also financing inclusive services in other sectors. The Abraaj Group is planning to invest in delivering high quality, mass-market healthcare for low and middle-income groups, particularly in Africa and South Asia, with the goal of optimizing profitability while achieving measurable social impact. Recognising that existing health systems are hampered by weak funding, infrastructure, and skills, Abraaj is planning to take an integrated approach – creating networked "ecosystems" of facilities from tertiary hospitals to labs and imaging centers that can work together to make the most of the resources they have. By connecting facilities and personnel across specialisms and geographies, for example, through telehealth and doctor exchange programmes, the idea is to find synergies that can boost the quality of care while saving money for both providers and consumers. If the fund achieves its goals by 2020 as planned, it could see 14 million patients in its hospitals each year, 54,000 hospital employees delivering quality care across the networks and 275 diagnostic centers providing much-needed pathology and imaging services across target markets. It will also provide 10,500 additional hospital beds. For more detail on this case, please visit report.businesscommission.org.

Companies outside the finance sector are extending financial inclusion too. Several multinational firms now offer supply chain finance to small and medium-sized suppliers in their value chains, many in developing countries. This gives small-scale entrepreneurs access to credit on much more advantageous terms than they could generally get based on their personal credit scores.

Financial inclusion can be a particularly powerful driver of gender equality, a crucial area for progress given the global gap between genders in their access to financial services: in 2014, 65 percent of men had a bank account, but only 58 percent of women. The gap is especially pronounced in South Asia, where there is an 18-percentage point difference between men and women – twice as high as in Sub-Saharan Africa. Promoting women's access to financial services, as well as to digital and property assets more broadly, are key areas where business can drive a better gender balance.

Different companies will have different ways of reducing poverty and promoting inclusion. But one commonly effective tactic will be to pursue gender equality within the company and through its supply chains and direct suppliers, as well as expanding business opportunities that promote gender equality. That could involve publishing the company's gender profiles from top to bottom, covering both pay differentials and how women and men are represented at each level of seniority. Companies can ask their top suppliers to do the same. And they can progressively embed the UN's Women's Empowerment Principles throughout their activities. These Principles help companies to tailor existing policies and practices or establish new ones to achieve gender equality in their businesses. (See Box 4: Pursuing gender equality is driving business growth). A new resource that will strengthen companies' work in this direction is "Leave No-one Behind", the first report from the High-Level Panel on Women's Economic Empowerment that outlines drivers to advance gender equality.

Box 4: Pursuing gender equality is driving business growth

Worldwide 200 million fewer women than men own a mobile phone. A significant proportion of these women live in markets where Vodafone operates already, prompting the telecoms major to trial a new business model in Turkey. Vodafone has been incentivising women in Turkey to buy mobile plans and then using the network to find education and work opportunities. Using its advertisement service, women without much tech know-how can access one of Turkey's biggest e-marketplaces. After launching in 2013, the service generated 4,700 adverts in its first nine months, triggering average sales of US$51 per user. As of September 2016, the programme has reached nearly 670,000 women. Vodafone meanwhile attracted 75,000 women customers, 15 percent of them new to the operator. Vodafone's 2014 Connected Women report estimates that Women First could generate economic benefits worth US$22.3 billion a year to 153.8 million service users and wider society in Vodafone's emerging markets by 2020.