BUS604: Innovation and Sustainability

Key Points

• Achieving the Global Goals that meet basic needs and protect human rights (the social goals) is a business imperative as well as a moral one.
• Failure on the social goals has huge economic costs – rising inequality has knocked more than 10 percentage points off growth of some economies. Women still earn 25 percent less than men on average for comparable work.
• More than 600 million new jobs are needed over the next 15 years to match growth in the global workforce. Youth unemployment is already at 13 percent; automation risks are significant. This outlook makes the potential for the Global Goals to deliver more than 380 million jobs even more vital.
• Today 20-40 million workers are trapped in forms of modern slavery. More than 150 million children are working in the fields, mines, workshops, and rubbish dumps, the informal dark side of the world economy.
• Trust in business continues to fall. Business can honor the terms of their social contract to regain society's trust by:
  • Adhering to high standards of behavior;
  • Supporting sectoral coalitions that raise standards across the competitive playing field for all players;
  • Paying their taxes transparently like everyone else;
  • Using their influence to advocate for policies in line with the Global Goals; and
  • Developing good jobs with decent pay along the whole of their supply chains in a way that fully respects the UN Guiding Principles on Business and Human Rights. 

More than half of the Global Goals aim to meet basic needs and to include, empower and protect those currently disadvantaged in society. Along with Goal 16 – Peace, Justice and Strong Institutions – these societal Global Goals are also moral imperatives for countless individuals in the business community. 

Achieving these Global Goals for human society is a business imperative too. As noted in Section 2, without improvement in the incomes, health, rights, and education of the great majority of the world's working men and women and better social protection, the business opportunities arising from sustainable development will not materialize. To take one example, income inequality in emerging and developed economies reduces business growth. The OECD's 2014 analysis of the impact of income inequality found that rising inequality knocked more than 10 percentage points off economic growth in both Mexico and New Zealand in the two decades before the global financial crisis. 

Achieving these goals is a business imperative for a further urgent reason. The financial crisis and events since have engendered a deepening crisis of trust in business and with it the risk of increasing social and political unrest. Trust in large corporations, particularly in major financial institutions, has eroded among many members of civil society (in which we include both NGOs and citizens) and governments. Businesses and their sector peers working with integrity in all their activities to pursue the social Global Goals can regain the trust of these parties in the social contract because all will be pulling in the same direction: a sustainable, more inclusive world, which will be a better world for business too. 

This section looks at ways that businesses can earn that trust, first through their direct influence on creating decent jobs and supporting training and education against a difficult outlook for global employment. Second, by forging a new social contract based on social dialogue with civil society and government.