Is there room for inclusive business in the new global development agenda?

Why believe in the Sustainable Development Goals (SDGs) if we have heard about similar goals to reduce poverty for some time and nothing has changed? A student addressed me with this question in one of my classes about CSR and inclusive business.

And what to answer if in fact her question reflects the uneasiness of many citizens worldwide who note that, after 15 years of having a global development agenda that sought, among others, to end extreme poverty and hunger; over 800 million people still lack adequate access to food and about 1 billion live on less than $1.25/day. Not to mention that concentration of wealth is alarming, because we are reaching a point where 1% of the world population has more wealth than the remaining 99%. So why moving to 17 goals, or why continue insisting on global goals for poverty reduction, if reality proves that under this strategy we have not been able to move forward?

When teaching I am committed to transparency and objectivity so I try to show “both sides of the coin” providing students with tools to build their own judgement. But my firm belief in inclusive business and my optimism about the ability of our society -especially young people- to improve things and bring about sustainable development, is the message I seek they take home.

Thus, I started arguing that, in fact, several critics worldwide coincide with her vision, finding many shortcomings in the SDGs. One widely mentioned is the lack of an effective system of international governance that allows for the interaction of all stakeholders in development and enables implementation of the objectives as planned. The complexity arising from objectives themselves is also a barrier for effective implementation, given the number of targets (169). This might obstruct not only proper implementation, but also monitoring and evaluation, turning the task particularly difficult for smaller and less developed countries that may experience impediments to secure the necessary technical, human and financial resources.

But, in contrast, as mankind we have the advantage that we are not today as 15 years ago. Now we have a solid base of lessons learned in the MDG process, from which –is expected- our leaders and decision makers can depart to generate more pertinent plans, programs and activities, to route societies towards a better development, with sustainability and inclusion.

And which are these lessons? Among others, we have learned that poverty is a multidimensional condition whose main causes transcend a mere lack of financial resources. That, therefore, solutions to overcome poverty ought to understand development holistically and generate responses that along with better income also address aspects like access to decent housing, sanitation, nutrition and education. That, private sector actors can -and should- be active creators of sustainable alternatives for a healthier development. That climate change and poverty are global challenges that must be addressed in a coordinated manner given their multiple relationships. And that sustainable development is not possible if as humanity we do not earnestly face the unequal distribution of wealth.

Building on these learnings businesses have begun to direct their efforts towards inclusive business, which, in my view, can be a great contribution of the private sector to support the achievement of the SDGs by 2030. Inclusive businesses are schemes that, under the logic of mutual benefit, seek to incorporate vulnerable population into corporate value chains, either as consumers, suppliers, distributors or business partners. Thus solutions that benefit both businesses and the community are generated. With the advantage of engaging businessmen with poverty, not from a philanthropic stance, but from their business acumen.

The main challenge facing inclusive business is to improve the quality of life for billions of people in poverty, but in an environmentally sustainable way, because, as learnt, climate change and poverty go hand in hand. Consumption levels by vulnerable population cannot be raised as in industrialized countries. Inclusive businesses must necessarily be accompanied by a high degree of innovation, for example, through eco-efficient alternatives, clean technologies and closed loop processes.

What is then required to create space for inclusive business in the new development agenda? Above all, we need governments committed to reducing inequality in wealth distribution, without this none effort for sustainability will be fully successful. Also, international donors that rethink the role of ODA moving from a handout mentality towards more catalytic and strategic programs, including schemes to support implementation of inclusive business with the poor (has gradually occurred among aid agencies, but can still be strengthened). Development actors aware of the need for teamwork and collaboration to generate better and greater impacts. Fostering partnerships for development and coordinating efforts by public, private, and multilateral actors. And finally, we require companies that put aside the philanthropic vision of social responsibility and adopt sustainability as a business strategy, incorporating inclusive business as an alternative to support poverty alleviation and improve quality of life, not out of charity or to “do well for society”, but for sustainable business management

By María Pineda