No Capitalism, Business For Social Change
The world is at a crossroads. We come across pressing problems almost everyday. The gap between the rich and the poor is getting wider in many countries. More than 150 million children worlwide are engaged in child labour.
There are more refugees on earth than ever before. With the changing dynamism and organic nature of political climate around the globe and an unceasing skepticism around international co-operation, globalization seems to have failed. We are seeing people closing their borders, countries becoming more nationalistic and governments taking protectionist measures. Environmental risks from climate change to water scarcity are getting worse. We are seeing the impacts of climate change across the world and that is bound to get worse in near future.
We need fundamental change, and business can be the part of the solution. But business is often considered synonymous to capitalism — a serious disrepute. There is a new opportunity emerging to help solve some of the planet's biggest challenges. A lot of people are convinced that businesses are the source to many of the social challenges that we face and they certainly don't serve our best collective interests. Rightly so, in many cases there are many bad actors out there and so this perspective is justified. Yet a world without business scarcely seems unrealistic. The challenge isn't to do away with business but to feel our way towards a better version.
At a time when we have enormous pressure on the planetary boundaries and too many people are being left behind, there is a dire need to have a proactive business model that actually addresses the world's challenges. It should be a collective ambition to build a more inclusive world when no one is side-lined by economic progress. Private players should embrace the concept of adding more value to the eco-system than they take out of it.
It's really important for the private sector to grasp the UN sustainable development goals (SDGs) as a fantastic business opportunity. If we explore all the business opportunities that the SDGs open up to the private sector, we can achieve 12 trillion dollars of additional GDP growth for the world by 2030.
We can create 380 million jobs and this is a phenomenal turnaround in the global economy led by the developing countries. When we look at sustainable development and impact investing, the most important thing is to understand that this is profit driven. The private players can do socially good business with a clear profit motive. This way local prosperity and shareholder prosperity can be created simultaneously.
SDG will require global investments far beyond the current level of development finance. In developing countries alone 2.5 trillion dollars more than what is now available will be needed. Private investment can help to fill the gap. To fill the gap, private sector needs to invest and apply development capabilities and innovation to SDG challenges. For example business can invest in the development and application of technologies that can make healthcare more accessible for millions. This is the key to achieve Goal 3 which talks about ensuring healthy life and promote wellbeing at all ages.
To produce impact, businesses must identify goals to focus on. Most of the business communities are aware of the SDGs but only few understand the impact on them.
Different SDGs will be relevant for each company depending on sectors, size, geography and strategic priority. Companies should first access on which SDGs they can have the biggest impact and then prioritize action accordingly to reduce the negative impact and scale up the positive impact.
Companies should not only focus on their own operation but look at their entire value chain. Business needs supportive policies from governments. Business need to partner with the public sector to share insight and inspire policy makers. This will help build an environment where businesses that help solve social problems will prosper and no one in our planet will be left behind.