PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT: Collective action by business, governments and civil society to achieve scale and transform markets
Jane Nelson
COMMISSIONED BY THE BUSINESS AND SUSTAINABLE DEVELOPMENT COMMISSION PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT: Collective action by business, governments and civil society to achieve scale and transform markets
This paper was commissioned by the Business and Sustainable Development Commission and produced by an external expert. The contents reflect the opinion of its author and do not necessarily represent the views of the Commission. Readers may reproduce material for their own publications, as long as they are not sold commercially and are given appropriate attribution.
©: 2017 Business and Sustainable Development Commission, and Corporate Responsibility Initiative, Harvard Kennedy School. This work is licensed under a Creative Commons License Attribution – NonCommercial 4.0 International (cc by-nc 4.0).
Written by Jane Nelson Designed by Alison Beanland
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Corporate Responsibility Initiative Business & Sustainable Development Commission Harvard Kennedy School c/o Systemiq 79 John F. Kennedy Street 1, Fore Street Cambridge, MA 02138 USA London ECY 5EJ
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Foreword 3
Executive Summary 5
I. The need for collective action 9
1. Four key imperatives driving partnership 10 2. Shifting from the pioneers to common practice 13 3. The potential and limitations of partnership 15
II. Collaborative pathways to scale business engagement in sustainable development 16
1. Cooperation with business partners along value chains 17 2. Project-level, financing and implementation partnerships 19 3. Industry-level, precompetitive business alliances 26 4. Multi-stakeholder institutions, platforms and networks 30 5. Coordination among different levels of partnership to drive systemic change 33
III. An Agenda for Action: Recommendations for coalitions to achieve scale and transform markets 37
1. Strengthen precompetitive business alliances to leverage industry-wide standards and joint action 38 2. Participate in joint financing and innovation platforms to deliver specific goals 40 3. Support collective initiatives to harmonize sustainability data and reporting 42 4. Expand coalitions that are integrating sustainability criteria into capital markets 44 5. Coordinate policy dialogue and investment in key cities, landscapes and countries of operation 47
IV. Conclusion 50
Appendices 52
Endnotes 59
References 61
Acknowledgments 66 Foreword
The Sustainable Development Goals (SDGs) are a vision to emerge as many different individuals and organizations statement and action plan for achieving social and interact with each other – both formally through established environmental sustainability on our planet. Given the sheer structures and informally through networks – to experiment, ambition of the SDGs and the pressing need for all sectors learn, adapt and then scale or replicate what works. of society to contribute to their realization, I urge businesses everywhere to help meet our common existential challenge. The following paper provides an overview of five collaborative pathways that companies are using, or could use, to achieve How can companies contribute? this dynamic process of collective action and learning, with the aim of increasing the scale and impact of business First and foremost through the manner in which they conduct engagement in sustainable development. As the paper their own business activities and the leverage they have emphasizes, these five models of collaboration are not across their value chains. Every company can contribute mutually exclusive. Leading companies are usually active positively to sustainable development by reducing the participants in numerous partnerships simultaneously. It is negative impacts on people’s human rights and on the often the dynamic interaction between different levels and environment associated with its business – including across types of collaboration that creates the conditions necessary to its value chain. Far from viewing respect for human rights achieve more systemic change. and protection of the environment as merely a matter of compliance, risk management and ‘do no harm’, these The paper draws on more than 100 examples of collaboration commitments can be powerfully affirmative, transformative and some of the literature on what works and what does not and even disruptive of traditional practices. in building public-private partnerships, business alliances and multi-stakeholder initiatives. It concludes with a set Second, some companies will also be able to contribute to the of recommendations on how companies can work more SDGs by developing new and innovative products, services, effectively with each other and with governments and civil technologies and ways of doing business that can further society organizations in contributing to the SDGs. contribute to improving people’s lives, and to improving the environment and combating climate change. They should do As far back as January 1999 former UN Secretary-General so wherever they can, but never as a substitute for respecting Kofi Annan warned, in a World Economic Forum Speech, that human rights and protecting the environment.1 unless globalization has strong social pillars it will be fragile and vulnerable – “vulnerable to backlash from all the ‘isms’ of Despite the potential of companies to make a meaningful our post-cold war world: protectionism; populism; nationalism; contribution to the SDGs in these two ways, their impact is ethnic chauvinism; fanaticism; and terrorism.”3 He specifically often constrained by a combination of governance gaps, appealed to the business community to step up and play its market failures and high levels of mistrust between the role in achieving a socially sustainable globalization. private sector and other stakeholders. Although by no means a panacea, collaboration and collective action can Clearly, we must redouble our efforts, both individually and help to overcome some of these constraints. collectively. Equally important, we have to maximize the effectiveness of our efforts to make globalization work for all As we have noted in previous research undertaken by our because, as Annan has also said, if it doesn’t, “in the end it will Corporate Responsibility Initiative, the challenges presented work for none.”4 Effective partnerships and collective action by the SDGs are complex and systemic.2 They have arisen offer one way forward. over years from the actions and interactions of diverse yet interconnected and interdependent stakeholders. There is Professor John Ruggie increasing recognition that they cannot be addressed in a Berthold Beitz Professor in Human Rights and International top-down, controlled or linear fashion. New behaviors and Affairs and Faculty Chair of the Corporate Responsibility models of cooperation are needed that enable solutions Initiative, Harvard Kennedy School
4 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT Executive Summary
I. THE NEED FOR COLLECTIVE ACTION Based on experience to-date, the following five types of Leadership by individual companies is necessary but not collaboration offer particularly high potential for accelerating sufficient to drive transformational and systemic change and scaling up business engagement in sustainable toward sustainable development. Collective action and development: collaboration will be essential. It will be needed among companies themselves, on a precompetitive basis in specific • Cooperation with business partners along value chains: industry sectors, issues and locations. It will also be needed Most large companies have thousands of commercial on a cross-sector or multi-stakeholder basis between business partners in their value chains. They include companies, governments and civil society organizations. suppliers, distributors, retailers, investors, investees, and joint venture partners. By setting standards, creating incentives, There will be business benefits for the companies that and providing financing and capacity building opportunities understand this agenda and align their core business for their business partners, companies can have substantial activities to addressing the economic, social and leverage in driving change towards more inclusive and environmental risks and opportunities material to their sustainable growth along their own value chains. business and salient in terms of their potential impacts on people. Despite these likely business benefits, the ability • Project-level, financing and implementation of companies to spread responsible practices and deliver partnerships: These usually involve one or a few companies market-based solutions for the SDGs at scale is undermined partnering with NGOs, government entities, research by a variety of market failures, governance gaps, and cultural organizations or each other to share risks or costs and/or to and trust impediments. catalyze resources to develop new technologies, products, services or business models. They range from multi-billion Partnerships and coalitions can play a vital role in helping to dollar infrastructure projects to inclusive business models overcome some of these obstacles. They will be particularly aimed at including low-income producers and consumers in important in addressing the following four imperatives: corporate value chains to joint community investments and • Improving the impact of all business activities, to support humanitarian partnerships. growth that is more responsible, inclusive and sustainable; • Increasing the level of new private sector investment and • Industry-level, precompetitive business alliances: innovation in sustainable development; These involve a group of companies working together on • Achieving systemic transformation of markets to work a precompetitive basis within or across industries to drive better for people and the environment; and sector-wide change. This can include spreading responsible • Building mutual trust, accountability and a new social industry standards, scaling and replicating promising contract between business, governments and civil society. innovations and models, and undertaking joint research or public policy advocacy. Some of these alliances are II. COLLABORATIVE PATHWAYS TO SCALE part of established trade and industry associations and BUSINESS ENGAGEMENT IN SUSTAINABLE demonstrate the potential to mobilize more associations DEVELOPMENT toward sustainable development. Others have been created in recent years by smaller groups of business leaders as A growing number of partnerships have emerged over the corporate responsibility coalitions with a dedicated focus past two decades. They vary widely in terms of their scope, on spreading responsible business practices and achieving participants, governance models, purpose, and levels of sustainability goals. activity. Most are still at a nascent stage, especially given the long-term nature of partnership building and system change. • Multi-stakeholder institutions, platforms and networks: Rigorous analysis of their impact and what works is also at These involve collaboration among groups of companies an early stage, but useful lessons and good practices are alongside other actors such as governments and/or civil emerging. society organizations aimed at overcoming systemic market
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 5 EXECUTIVE SUMMARY
failures or governance gaps to achieve transformational III. AN AGENDA FOR ACTION change. They include independent institutional arrangements and funds with their own formal, governance The following paper reviews examples of partnership in these and accountability structures. They also include more different levels of engagement and assesses some of their informal and dynamic networks and technology-enabled lessons to-date. It then proposes the following five-point open collaboration platforms. Agenda for Action to strengthen existing coalitions or build new ones that offer high potential for achieving scale and • Coordination between different levels and types of transforming markets: partnership to drive systemic change: In most cases of #1 Strengthen precompetitive business alliances to leverage successful scaling there are mutually reinforcing linkages industry-wide standards and joint action between the different levels and types of partnership #2 Participate in joint financing and innovation platforms to outlined above. Individual companies are increasingly part deliver specific goals of an ecosystem of sustainable development partnerships, some led by business, others by governments or civil #3 Support collective initiatives to harmonize sustainability society. Business leaders need to understand and be data and reporting more actively engaged in shaping this ecosystem, #4 Expand coalitions that are integrating sustainability and its relationship to their own corporate strategies, criteria into capital markets cultures and performance. #5 Coordinate policy dialogue and investment in key cities, landscapes and countries of operation These recommendations are summarised in the table opposite.
Collaborative pathways to scale business engagement in sustainable development
Greater scale/less control 4 Multi-stakeholder 3 institutions, platforms Industry-level, and networks 2 precompetitive business Project-level, alliances 1 financing and Greater company control/lessCooperation scale implementation with business partnerships partners along value chains Individual company
5 Coordination between different levels and types of partnership to drive systemic change
6 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT EXECUTIVE SUMMARY
An Agenda for Action: Recommendations for coalitions to achieve scale and transform markets
#1 Strengthen precompetitive There is substantial untapped potential to raise the bar on sustainability leadership in business alliances to all trade and industry associations and through sector-focused corporate responsibility leverage industry-wide coalitions. This can be achieved by establishing industry-wide standards, setting shared standards and joint action goals or roadmaps for investing in the sustainable development goals, agreeing on common metrics, reporting and benchmarking members’ performance against these, sharing lessons and good practices, supporting precompetitive research and development consortia, and undertaking joint policy advocacy. CEO-level leadership and champions will be essential for success.
#2 Participate in joint Companies should focus their engagement on issue, sector or commodity specific financing financing and innovation mechanisms and innovation platforms that most closely align their core business priorities platforms to deliver and capabilities with specific SDGs. In particular, there are opportunities to create blended specific goals finance partnerships among companies, investors, development finance institutions, donor agencies, research institutes and philanthropic foundations with the goal of developing and scaling new technologies, products, business models and sustainable infrastructure.
#3 Support collective Collaboration is needed among providers and users of corporate sustainability data and initiatives to harmonize reporting to drive greater convergence and harmonization. This is necessary to make sustainability data and information more comparable, consistent and useful to investors, regulators and other reporting stakeholders as well as to companies themselves in order to improve decision-making, performance and accountability.
#4 Expand coalitions that are Coalitions can accelerate and scale the integration of sustainability criteria, longer-term integrating sustainability horizons and greater financial inclusion into the decision-making and impact of capital criteria into capital markets market institutions. Concerted efforts are needed to expand the membership and influence of existing coalitions focused on scaling responsible, inclusive and sustainable finance, such as the Sustainable Stock Exchanges Initiative, Principles for Responsible Investment and Global Impact Investing Network, among others. In particular, there is a need to increase the participation and leadership of major asset owners such as pension funds, sovereign wealth funds, endowments and insurance companies.
#5 Coordinate policy dialogue Spatial and location-specific coalitions that bring together companies, investors, and investment in key governments, civil society and citizens to agree on shared priorities and develop common cities, landscapes and plans for action offer high potential to achieve scale and systemic impact. In particular, there countries of operation is a need to increase business participation and collective action in: • City-based alliances dedicated to increasing urban sustainability and resilience • Integrated landscape management initiatives, especially in vulnerable watersheds, biodiversity and ocean ecosystems; • Country-level multi-stakeholder platforms, chaired by government ministers that systematically engage leading companies, business associations and NGOs in setting national priorities for the SDGs.
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 7 EXECUTIVE SUMMARY
IV. CONCLUSION The success factors summarized in the table below are a synthesis of over forty academic and practitioner studies Partnerships are a valuable tool to drive change toward exploring what works in building partnerships, ranging from more responsible, inclusive and sustainable growth. global multi-stakeholder institutions to more traditional They can help to address some of the market failures, public-private infrastructure partnerships. governance gaps and trust deficits that undermine the acceleration and scaling of business engagement in Effective partnership building, especially across sectors, sustainable development. They can also serve as a platform requires new mindsets and skill sets on the part of individuals for convening and coordinating the diverse actions of and new capabilities and incentives on the part of institutions. numerous actors and for building mutually reinforcing It requires patience, persistence and a long-term commitment linkages between different sectors and sustainable in an era of short attention spans, accelerating and disruptive development goals. change and short-term performance pressures on companies and governments alike. Yet, they are not a panacea. Most partnerships are difficult to build and challenging to sustain and scale. They often entail None of this is easy. Yet, it is essential work if we are to make high transaction costs, and there is a need in many cases to progress at the scale and systemic impact that are required. strengthen partnership governance and accountability, The ability to galvanize and convene other stakeholders to as well as operational efficiency and effectiveness. co-create effective partnerships for sustainable development has become one of the essential leadership imperatives for the 21st Century.
Success factors in building partnerships SHARED PURPOSE and A compelling agenda for change led by strong champions who are leaders in their UNDERSTANDING OF 1 own organizations and are able to take decisions, allocate resources, motivate and THE ECOSYSTEM and mobilize others, and support a long-term commitment. its STAKEHOLDERS Jointly agreed public commitments and a strategic plan for achieving them, based 2 on rigorous consultation and relevant baseline evidence, with clearly defined roles and responsibilities for every participant.
Understanding of the full value chain or ecosystem required for transformation and 3 ability to either holistically coordinate activities or stakeholders across this system or target specific interventions that mutually reinforce those of others.
RIGOROUS PROCESS Effective implementation capability, enabled by dedicated and well-resourced and OPERATIONAL 4 ‘backbone support’, committed practitioners from participant organizations who ALIGNMENT have the necessary authority and skills to engage, and effective communication and conflict resolution processes that enable regular and rigorous dialogue and feedback. 5 Strong alignment with and leverage of partners’ core competencies and interests. GOOD GOVERNANCE and Mutually agreed metrics and governance mechanisms to track performance and MUTUAL ACCOUNTABILITY 6 ensure rigorous oversight and accountability, both within the partnership itself and for PROGRESS externally with relevant stakeholders, including beneficiaries and vulnerable groups where relevant.
Participatory monitoring and independent evaluation approaches that facilitate 7 shared learning and better decision-making in addition to ensuring transparency and accountability.
Flexibility to “course correct” and be adaptive based on evolving circumstances, 8 disruptive events, failures, stakeholder feedback and lessons learned.
8 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT I The need for collective action
The leadership challenge is clear. It will be impossible to achieve the Sustainable Development Goals without accelerating and scaling private sector engagement and collective action by business, government and civil society.
Individual action by companies and business leaders will be Simply put, without more – and more effective – business-to- crucial to driving more inclusive and sustainable growth. business alliances and cross-sector collaboration, it will not Yet, it will not be sufficient to achieve the systemic change be possible to mobilize the estimated US$5-7trillion needed and market transformation that are required. In addition each year until 2030 to meet these global commitments. to reforms in government policies and capital markets, It will not be possible to create the 600 million new jobs increased emphasis must be placed on building more required to keep pace with population growth over the effective partnerships and coalitions. coming decade, some 90 percent of which will have to come from the private sector. And it will be impossible to ensure In particular, collective action will be needed among they are decent jobs that respect human rights, provide a companies themselves, working together along global living wage and improve the quality of peoples’ lives in an supply chains and on a precompetitive basis in specific environmentally sustainable manner. industry sectors, issues and locations. It will also be needed on a cross-sector basis among companies, governments and There will be business benefits for the companies that civil society organizations. This can take the form of project- understand this agenda and align their corporate strategy level partnerships, ranging from billion dollar public-private and core business activities to addressing the economic, investments in large-scale infrastructure projects to business social and environmental risks and opportunities most linkages along value chains and community-level alliances. relevant to their business and most salient in terms of their It also includes more complex multi-stakeholder institutions, potential impacts on people. Despite this potential, the ability platforms and networks that aim to drive systemic change of companies to spread responsible practices and deliver across a large number of diverse yet interconnected and market-based solutions for the SDGs at scale is undermined interdependent stakeholders. by a variety of market failures, governance gaps, and cultural and trust impediments. Partnerships and coalitions can play a Such collaborative efforts are not new. Yet, the need for them vital role in helping to overcome some of these obstacles. is greater than ever if we are to achieve the ambitious targets set by the Sustainable Development Goals (SDGs), the Paris Climate Agreement and the Addis Ababa Action Agenda on Financing for Development. So is the need to increase not only the number of partnerships and coalitions, but also their effectiveness, efficiency and legitimacy.
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 9 I THE NEED FOR COLLECTIVE ACTION
1 Four key imperatives driving partnership
Partnerships and coalitions will be particularly important management strategy that can help companies to earn both in addressing the following four imperatives: their legal and social ‘license to operate’. They can also help to spread international norms and good practice to countries • Improving the impact of all business activities, to support where local governance systems or institutions are weak. growth that is more responsible, inclusive and sustainable; And they can unleash and build the capabilities of vulnerable groups of people who either work in or are affected by global • Increasing the level of new private sector investment and value chains in ways that directly improve lives and enhance innovation in sustainable development; achievement of the SDGs.
• Achieving systemic transformation of markets to work In addition to implementing responsible business practices, better for people and the environment (especially companies can also enhance the contribution of their commodity, consumer, financial, and labor markets); and existing activities to sustainable development in a variety of other areas. This includes focusing on local job creation, • Building mutual trust, accountability and a new a new training and human capital development, improvements in social contract between business, governments and civil productivity and resource efficiency, enhancing access and society. affordability of essential goods and services, implementing cleaner and more inclusive technologies, supporting physical infrastructure development, and strengthening institutions. The organization Shift has proposed a simple framework as a tool for helping all companies to assess and manage their 1.1 Improving the impact of all business activities, impacts on people and planet. It offers a comprehensive to support growth that is more responsible, inclusive approach, ensuring that the various activities through which and sustainable a company influences sustainable development are aligned to maximize positive outcomes for people.1 To achieve sustainable development it will be essential that business activities, especially those of large companies, fully In short, the development impact of existing private integrate responsible business practices and performance investment and business activities can be markedly improved standards. These include: if companies take a comprehensive approach to respecting • Respect for the human rights of people whose rights human rights and identifying the SDG-related risks and are affected in connection with a company’s operations, opportunities most relevant to them and their stakeholders; products and services; and then implement clear policies, goals and strategies to • Zero tolerance for corruption and fair payment of taxes; mitigate shared risks and maximize shared opportunities. • Environmental, social and governance (ESG) standards. The potential is great, yet even the companies that are Frameworks such as the UN Global Compact’s Ten Principles leading on sustainable development face serious constraints (initiated in 2000), The IFC’s Performance Standards (created in their efforts to drive transformational change. in 2006 and revised in 2012), and the UN Guiding Principles These include challenges in achieving scale through their on Business and Human Rights (endorsed by the UN own operations on a voluntary basis, especially if there is Human Rights Council in 2011) provide clear guidance for limited pressure from stakeholders to do so. Linked to this companies. The implementation of responsible business is the challenge of being able to compete on a level-playing practices and performance standards is not only a risk field with sustainability laggards when investors, consumers
10 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT I THE NEED FOR COLLECTIVE ACTION
and regulators do not place sufficient value on superior unlock private capital and capabilities to invest in sectors or sustainability performance and do not fully account for or locations where sustainable development needs are greatest, penalize negative social and environmental externalities. but where a combination of market failures and governance gaps impede commercial rates of return, either initially at the Partnerships and coalitions can help to address these start-up phase or on a longer-term basis. challenges by establishing a level playing field for responsible business standards on an industry-wide basis or 1.3 Achieving systemic transformation of markets to within specific countries and value chains. They can become work better for people and the environment a vehicle for targeted joint action with clear goals to address shared challenges, and to drive better performance along Improving the sustainability performance of specific value chains. They can also help to ensure greater corporate companies and business activities and increasing private transparency and accountability, both on an individual and investment in specific projects and sectors are necessary, collective basis. but not sufficient. In addition to embedding responsible practices and more inclusive and sustainable approaches 1.2 Increasing the level of new private sector investment at the level of individual companies and projects, there is and innovation in sustainable development also a need to achieve broader and more systemic market transformation in many sectors. No company can do this In order to achieve the 2030 Agenda it will be necessary to alone. Nor can any government. Systemic change requires go beyond improving the impact of existing private sector numerous different interventions at different levels and from activities. There is an urgent need to mobilize, catalyze and different actors. And it requires intermediary organizations channel substantially more funding for the SDGs as well as or partnership platforms that can help to support, align and different types and sources of funding. There is a need to coordinate these diverse efforts.3 move from billions to trillions in resource flows.2 Transformation will be particularly important in key value Clearly, domestic and international public finance will remain chains and markets such as forestry, food and mineral essential, but they are not sufficient. It will be imperative commodities, energy, health, education, labor, financial to increase the level of private finance and investment services and housing. It will be essential for respecting in the SDGs in all countries, especially low- and middle- human rights, tackling inequality, improving employability, income countries with growing populations. This includes creating productive jobs, including low-income both portfolio investment and direct investment, both producers, workers and consumers, scaling technological domestic and foreign. It also includes mobilizing private breakthroughs, and addressing systemic and interconnected sector expertise and scaling capabilities, ranging from environmental and social challenges. science, technology and research skills to the innovation, implementation and operational capacities of business. The major corporations that are active players in key value chains and markets have a particularly vital leadership role. Partnerships are an important tool for leveraging diverse In many cases, a relatively small number of 50 to several public and private financial resources, expertise and hundred influential companies can deliver the critical mass capabilities. They make it possible to share the risks and that is needed to catalyze change and drive it through their costs of implementing and scaling new products, services, value chains and business ecosystems. technologies and business models that have the potential to address specific SDGs but do not initially meet corporate The spread of the IFC’s Performance Standards in project hurdle rates on a purely commercial basis. They can also help finance through the development of the Equator Principles to improve the risk profile and returns of more traditional, offers one example. Convened by the IFC, the World long-term investment in sectors such infrastructure or in Bank’s private sector arm, and seven commercial banks in high-risk locations and fragile states. As such, they can 2004, the Equator Principles are a voluntary collaborative
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 11 I THE NEED FOR COLLECTIVE ACTION
initiative aimed at embedding social and environmental advances and more open societies. Many more have entered risk management criteria into major infrastructure projects the middle class. Yet, the benefits have been unevenly in developing countries. Today, they have been adopted by distributed in most countries. Political and business leaders some 85 financial institutions in 35 countries, which together are facing growing public discontent and a backlash against account for more than 70 percent of international project globalization and large corporations, as citizens struggle to finance debt in emerging markets. deal with rising inequality, an inability to benefit from digital and other technology breakthroughs, and job insecurity and Another evolving example is WWF’s Market Transformation uncertainty. Initiative. WWF has identified 15 forestry and agricultural commodities that affect the livelihoods and food supply of In short, at a time in the world’s history when the resources some 1.5 billion people, including many of the poorest on and capabilities of private enterprise are needed more than the planet, and that have the greatest impact on biodiversity, ever before, business leaders are facing a large public trust water and climate. Its theory of change is focused on deficit. While by no means a panacea, partnerships and engaging the major corporations and financial institutions coalitions that enable government officials and business active in these commodity value chains, along with policy leaders to engage and consult more effectively with each advocacy. As WWF argues: “Around 500 companies control other and with citizens are one tool that can help to address roughly 70 percent of global markets for our priority this challenge. They can help to jointly identify key priorities commodities. If we can get a critical mass of companies to and concerns, and co-create a shared vision and agenda use credible production standards, we can push commodity for change among diverse and often dissenting individuals markets to a tipping point where sustainability becomes the and organizations. If effective, they can help to build mutual norm.”4 Similar arguments can be made for other key value respect and trust and strengthen the social contract between chains and markets. business, government and society.
Industry-wide or multi-stakeholder platforms that move In summary, effective partnerships and coalitions can from transactional partnerships to more transformative or help to overcome market failures, governance gaps and systemic models can play a crucial role. They can enable trust deficits that impede both business progress and collective advocacy for the policy reforms that are often more inclusive and sustainable development. There is an needed for such change. They can facilitate better data increasingly strong business case for companies in all sectors collection, analysis and benchmarking to drive industry- and countries to get more engaged in such collaborative wide improvements in performance and accountability. efforts. This business case includes their potential to improve They can align and coordinate the diverse interventions of the broader investment climate or enabling environment participating institutions. And they can help to improve the for doing business, enhance enterprise risk management, enabling environment for achieving shared business value help companies to harness new business opportunities and and development results more broadly, including for small markets, and increase the level of employee and stakeholder and medium enterprises. loyalty and engagement.
1.4 Building mutual trust, accountability and a new social contract between business, government and civil society
Trust in both business and government remains at alarmingly low levels.5 Large numbers of people in almost every country feel that their elites – both politicians and business leaders – are not delivering for the public good. Since 1990, over 1 billion people have escaped poverty as a result of globalization and trade, market-based systems, technological
12 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT I THE NEED FOR COLLECTIVE ACTION
2 Shifting from the pioneers to common practice
Pioneering companies have demonstrated what is possible. Likewise, the banks and institutional investors that have A core group of about 250 to 300 companies has played an funded or invested in more inclusive business models and active role investing in sustainable development over the past technologies or in sustainable infrastructure still represent a two decades, both on an individual basis and through working fraction of the estimated US$135 trillion aggregate balance in partnership with others. Many of the most ambitious and sheet of the banking sector globally and the close to US$100 effective partnerships and coalitions have been catalyzed trillion investment assets under management.12 and led by this vanguard.6 They are often the leaders in their industry sector or country in terms of their size, market share, The majority of the world’s private enterprises have not influence and ability to mobilize other partners. yet incorporated sustainability criteria into their corporate strategies, decision-making and operations. Most of them In addition to the corporate leaders, several thousand other have not engaged in partnerships beyond traditional business companies have embarked on efforts to integrate sustainability agreements and joint ventures. Current voluntary progress risks and opportunities into the way they do business and to by the private sector has been encouraging but not sufficient report publicly, if not always consistently, on their progress. given the scale and urgency of the economic, social and For example: environmental challenges to be addressed. It has been too slow, superficial, silo’d and small-scale to drive the type of • An estimated 7,500 companies now produce sustainability systemic change that is needed.13 or corporate responsibility reports in accordance with Global Reporting Initiative guidelines.7 Clearly, business alone is not responsible for taking action. • The Dow Jones Sustainability Index (DJSI) undertakes Government policies and regulations will be essential for an independent Corporate Sustainability Assessment of overcoming the constraints to accelerating and scaling more than 3,400 companies every year to produce its business engagement in sustainable development. family of sustainability-related indices.8 Similar ranking and They will be especially important in: benchmarking efforts cover comparable numbers. • Putting a price on carbon and on scarce natural resources; • The corporate membership of the UN Global Compact • Replacing fiscal incentives that undermine job creation, now tops 9,000 companies, some two thirds of them from social inclusion and environmental conservation with emerging markets.9 incentives that reward these practices; • The institutional investor membership of the Principles for • Developing national action plans to implement the Responsible Investment has reached 1,500 signatories that SDGs and the UN Guiding Principles on Business and collectively manage almost $60 trillion in assets, although Human Rights; at present less than 25 percent of these assets are explicitly managed through a sustainability lens.10 • Requiring companies to be more transparent and accountable in disclosing their non-financial as well as These numbers illustrate progress, but they are still a fraction financial performance, including environmental and social of the estimated 80,000 multinational companies in the world, issues, political lobbying activities and tax payments; and including more than 45,000 companies that are publicly listed • Undertaking ongoing policy and regulatory reforms to on the world’s stock exchanges, let alone millions of small and improve the overall investment climate for business in key medium enterprises.11 sectors that will be essential for the achievement of the SDGs, and for small and medium enterprises that will be the key sources of job creation.
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 13 I THE NEED FOR COLLECTIVE ACTION
At the same time, collaboration among companies, especially Respondents from all sectors also agree strongly on the the largest multinational and domestic corporations, and important role of the private sector. More than three- on a cross-sector basis between business, government quarters of the experts responding to recent surveys, and civil society offers untapped potential to drive more for example, believe that, “multinational companies will transformational change. Many senior business executives be the key drivers of broad-scale collaborations to drive recognize both the need and opportunity for collaborative sustainable development over the next five years, playing a action. For example: large or very large role compared to other actors.” 16
• A 2016 survey of 1,000 CEOs from more than 100 countries The challenge now is to take partnerships and coalitions and 25 industries undertaken by Accenture and the to the next stage. First, there is the need to build more UN Global Compact, found that “87 percent of them of them and engage many more companies and private believe that the SDGs provide a window of opportunity investors. Second, is the need to ensure that they are more to rethink and reset business approaches to sustainable effective, efficient and legitimate from the perspective of key value creation.” 85 percent of the CEOs surveyed, “… stakeholders. see cross-sector coalitions and partnerships as essential to accelerating transformation towards sustainable development, including greater collaboration with national governments on SDG Action Plans.”14
• Likewise, GE’s 2016 Global Innovation Barometer, which surveys over 2,700 senior innovation executives across 23 countries, found that, “the majority of businesses (77 percent) are seeing financial results from collaboration”, with collaborative approaches to innovation being particularly important when strategies are geared towards breakthrough innovations (85 percent).15
• Annual surveys undertaken by GlobeScan and SustainAbility over the past decade have drawn on the insights of hundreds of sustainability leaders in companies, NGOs, academic institutions and government agencies. Recent surveys highlight growing agreement on the need for multi-stakeholder partnerships and for shifting from transactional types of cooperation to more transformational collective action among many actors.
The five areas where more than half the respondents saw collaboration as being most effective were (in order of importance): advocating for pro-sustainable development public policy; engaging citizens or consumers on sustainable development issues; establishing or maintaining sustainability standards; engaging the investment community on sustainable development issues; and ensuring sustainable practices in the value chain.
14 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT I THE NEED FOR COLLECTIVE ACTION
3 The potential and limitations of partnership
Business engagement in partnerships and coalitions for Some of the progress made and key lessons learned from sustainable development is not new. The decades since these different levels of collaboration are addressed in Part II. the 1992 Rio Earth Summit have been an active period of Although partnerships and coalitions offer great potential for experimentation and field building in this area. Having said accelerating and scaling business engagement in sustainable that, the field is still nascent. There is still no commonly development, it is important to emphasize at the outset that agreed definition, nomenclature or categorization for the they are by no means a panacea. Even when a partnership plethora of different collaborative models that have emerged is the most appropriate tool to tackle a systemic challenge, during this period, which vary widely in terms of their scope, it usually requires a lot of work, time and investment in participants, governance models, purpose, and levels of relationship building to ensure that it is fit-for-purpose activity. and more efficient and effective than the participants acting alone. A 2015 study on multi-stakeholder initiatives, for example, identified 15 different names for collaborative efforts Most partnerships and coalitions are difficult to build and in global development, ranging from public-private challenging to sustain and scale. They often entail high partnerships (PPPs) to collective impact.17 Even the term transaction costs, even at the level of specific projects PPPs is applied in substantially different ways, from and value chains, let alone when it comes to driving more transactional and contractual infrastructure projects to transformational change across industries and in national more transformational and multi-dimensional alliances. and global governance systems. This diversity of definitions clearly creates challenges when it comes to comparing and evaluating different models of Cross-sector partnerships have also generated criticism from partnership. This paper uses a broad definition and includes some scholars and civil society organizations relating to their a variety of partnerships that share the following core governance, accountability and power dynamics, as well as characteristics: operational efficiency and effectiveness. This has particularly “A collaborative relationship in which all been the case where public sector resources have been participants agree to work together to used to catalyze private sector business models and profits achieve a common purpose or to undertake to deliver public goods, such as in large-scale infrastructure a specific task and to share risks, resources, projects and global public health and education partnerships. competencies and benefits, with reciprocal These critiques should not prevent the use of partnerships obligations and mutual accountability as a tool to achieve both business value and development for outcomes.”18 impact, but they point to the importance of ensuring that collaborative initiatives are well managed, governed and Based on experience to-date, the following five levels of evaluated. collaboration offer particularly high potential for accelerating and scaling up business engagement in sustainable Effective partnership building, especially across sectors, development: requires new mindsets and skill sets on the part of • Cooperation with business partners along value chains individuals and new capabilities and incentives on the part of • Project-level, financing and implementation partnerships institutions. It requires patience, persistence and a long-term • Industry-level, precompetitive business alliances commitment in an era of short attention spans, accelerating • Multi-stakeholder institutions, platforms and networks and disruptive change and short-term performance • Coordination between different levels and types of pressures on companies and governments alike. None of this partnership to drive systemic change. is easy. Yet, it is essential work if we are to make progress at the scale and systemic impact that is required.
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 15 II Collaborative pathways to scale business engagement in sustainable development
Five models of collaboration among companies, and between business, governments and civil society offer high potential to scale business engagement in sustainable development.
The five models are summarized in Diagram 1. In many cases it is this multi-level and multi-dimensional The following pages outline some examples and engagement by companies and other actors that offers the lessons learned. None of these models of collaboration greatest potential to drive systemic change and to achieve or levels of engagement is mutually exclusive. Most alignment among different SDGs or across industry sectors. leading companies are active participants in all of them It is also the most dynamic and difficult type of collaboration simultaneously. to define, categorize or evaluate.
Diagram 1 Collaborative pathways to scale business engagement in sustainable development
Greater scale/less control 4 Multi-stakeholder institutions, platforms 3 and networks Industry-level, 2 precompetitive business Project-level, alliances 1 financing and Greater company control/lessCooperation scale implementation with business partnerships partners along value chains Individual company
5 Coordination between different levels and types of partnership to drive systemic change
16 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT II COLLABORATIVE PATHWAYS TO SCALE BUSINESS ENGAGEMENT IN SUSTAINABLE DEVELOPMENT
1 Cooperation with business partners along value chains
Large companies that have operations and subsidiaries in • Leverage – where a company is more strategic and numerous countries or a sizable market share and influence systematic in identifying and working closely with in their industry are able to drive scale through their own the other companies in its value chain that have the business activities. In particular, they can achieve a substantial greatest potential for achieving a multiplier impact and scaling impact through cooperating more systematically with “demonstration effect” within their own value chains and business partners along their value chains. business ecosystems; and
Depending on its industry sector and business model, a • Structured partnerships with contractual obligations multinational company can have 60,000 to 100,000 suppliers, and performance requirements – where a company traders, distributors and/or retailers in its global value embeds specific sustainability process and performance chain. Some of these will be other multinational companies, criteria into its supplier or investment guidelines and with their own extensive value chains and ecosystems of contracts, and establishes internal and/or independent business partners. Others will be large domestic or regional auditing and capacity-building systems to monitor and companies and small and medium-sized enterprises. In improve the progress made by its suppliers or investees. the case of financial institutions such as banks, insurance companies and asset managers, their business partners can Cooperation with business partners can focus on setting range from different types of institutional investors to the and spreading performance standards in areas such as clients, companies and projects that they invest in or provide ethics, human rights, social and environmental performance. financial services to. It can also focus on co-investing and collaborative innovation with direct suppliers and other business partners. And in a Directly and indirectly, these companies and their business growing number of cases, it focuses on achieving a partners impact the lives of millions of people as producers, combination of both of these objectives. workers, distributors and consumers as well as those living in communities and regions surrounding their business The four examples in Box 1 from diverse industry sectors operations. It is estimated, for example, that about one in six and companies offer a tiny sample from hundreds of similar workers in the world today are employed in multinational initiatives of what is possible. In all cases these are examples value chains.19 In addition, the senior executives of large of large companies cooperating directly with key business companies and their local business partners often have direct partners on a mutually beneficial and commercially viable access to government ministers and the media were they basis in their own value chains. operate, and are able to serve as role models, catalysts and conveners of other companies. In every case these same companies are also engaging in other system-wide initiatives, from precompetitive In short, there is enormous untapped potential to achieve a industry coalitions to multi-stakeholder platforms. In doing cascade effect across geographic and industry boundaries so, they are creating mutually reinforcing feedback loops. through large companies cooperating directly with key On the one had they are able to draw on and share the business partners on sustainability issues. This cooperation practical experiences and lessons of their own value chain can take a variety of forms, which often include a partnerships more widely. At the same time, they can bring combination of the following: examples of industry good practices back to help strengthen these direct business or investment relationships from both • Influence – where a company serves as a role model and a commercial and sustainability perspective. The potential provider of good practices, information and training to for many similar types of direct supply chain partnerships is other companies in its value chain; enormous and largely untapped.
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 17 II COLLABORATIVE PATHWAYS TO SCALE BUSINESS ENGAGEMENT IN SUSTAINABLE DEVELOPMENT
Box 1 Examples of cooperation with business partners and investors along value chains
Spreading responsible business Building on over a decade of experience Initial partners were Statoil, Masdar, 1standards and practices through with its Supplier Guiding Principles, Walmart, Total, BHP Billiton, Intel, and suppliers the SAGPs, which were established in Goldman Sachs and MWH. In each case consultation with internal teams across they have jointly identified a specific, but Nike and Gap, offer examples of two the company, key suppliers and external global energy or water challenge with GE companies that have led the way in the experts, set expectations on human and with the goal of co-developing and apparel sector to establish comprehensive and workplace rights, environmental co-financing a set of solutions to address and collaborative programs with their stewardship and farm management this challenge. Once trialed and tested in manufacturing suppliers to improve practices, thereby aligning with a number one location the goal is for the solutions working conditions in the factories they of the SDGs. The Supplier Engagement to be globally scaled or replicated on a source from. Over the past two decades, Program is a structured 7-stage commercial basis. they have shifted from a top-down, framework that enables the company to audit-based focus to a more cooperative provide its suppliers with information In 2016, in partnership with a diverse approach to supplier engagement and guidance on the SAGPs, assessments, group of investors as Limited Partners, aimed at educating and building audits, measurement of progress and the Abraaj Group launched the Abraaj the capabilities of factory managers, validation to enable them to qualify for Growth Markets Health Fund. This is a strengthening the voice and organizing sustainability certification with industry- US$1 billion private equity fund dedicated capacities of workers, and changing wide standards relevant to their specific to investing in and strengthening incentives and skills for company commodities. This provides a good sustainable, affordable and high quality buyers, in order to address some of example of cooperation with suppliers health ecosystems in selected cities in the systemic challenges to respecting within a company’s own value chain that South Asia and Africa. It is co-funded by workers rights. More recently they’ve is also aligned with more systemic and the Bill & Melinda Gates Foundation, the developed complementary partnerships transformational industry-wide initiatives. IFC, Phillips, Medtronic and Merck, among focused on workers’ empowerment others. The Fund will invest in companies more broadly, ranging from work-based Co-investment and collaborative focused on the provision of healthcare health and wellness programs to financial innovation with value chain partners services, the distribution of medical literacy and leadership development. In 2 technologies and medicines, and other addition to the more collaborative and In 2016, building on the experience healthcare opportunities. It will work mutually accountable direct approach and lessons of the first decade of its closely with its partner companies not they are taking with their suppliers, the Ecomagination initiative, GE launched only to help them to grow their business companies are also partnering with other the Ecomagination 2020 Partnerships and scale their outreach to patients, but competitors, NGOs and trade unions in a program, aimed at working with some also to share lessons and best practices of number of multi-stakeholder initiatives of its key business partners to accelerate between cities and countries. Alongside to achieve industry-wide impact. innovation in water and energy efficiency. its investment committee, the Fund has The company has partnered with, established an external impact advisory In 2015, in support of The Coca-Cola “…eight global, like-minded companies committee consisting of leaders in global Company's goal to sustainably source its to co-create and commercialize health and impact investing to assess the 14 key agricultural ingredients by 2020, transformative solutions to these broader development impact of the fund. a Supplier Engagement Program was challenges.” 20 The goal is to, “…create a finalized to help suppliers comply with network effect with ground-breaking the company’s Sustainable Agriculture technology, new business models and Guiding Principles (SAGPs). innovative funding structures.” 21
18 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT II COLLABORATIVE PATHWAYS TO SCALE BUSINESS ENGAGEMENT IN SUSTAINABLE DEVELOPMENT
2 Project-level, financing and implementation partnerships
Project-level partnerships occur between one or a small models that have remained fully public. Despite the group of companies and other actors (investors, public challenges of designing, structuring and implementing donors, private philanthropists, government entities, infrastructure PPPs, most governments, “…continue to see social enterprises, NGOs, and research institutions). significant potential and need for expanded use of PPPs to They usually bring participants together under a formal help build infrastructure for growth.” 24 agreement to accomplish a certain objective or set of objectives often within a set timeframe. They typically • There has also been substantial growth in PPPs for include an implementation plan with well-defined roles health as a way to, “expand access to higher quality and responsibilities, and with monitoring and evaluation health services by leveraging capital, managerial capacity mechanisms that enable partners to make ‘course and know-how from the private sector”, with 78 projects corrections’ as needed over the life of the project.22 approved by the Word Bank Group alone between 2004 and 2015.25 Many more project-level PPPs for health, They usually aim to overcome specific financing, resourcing, as well as a growing number for education, have been design, operational, market access or governance barriers to approved by governments and other development harnessing new investments and business opportunities finance institutions in developed and developing or embedding responsible business practices in specific countries. projects or value chains. • Over 2,100 partnerships have been listed on the UN’s They include partnerships to finance, develop and deliver Partnerships for SDGs website since it was created in new infrastructure, products, services, technologies and 2015. Many of these are project-level initiatives, some with business models that are either more inclusive of low the potential for scaling and replication. Although it is income producers and consumers, more environmentally still early days for evaluation, in 2016 several UN entities, sustainable and lower-carbon and/or that adhere to specific including the UN Global Compact, launched “Partnership human rights and sustainability performance standards. Data for SDGs” as a effort to improve the tracking of These can range from multi-billion dollar infrastructure information and progress on registered partnerships and projects to individual consumer products or delivery increase transparency on results.26 mechanisms that improve access to essential goods and services. • Likewise, the Business for 2030 platform, also created in 2015 and hosted by the US Council for International There are thousands of project-level, financing and Business, has posted examples of some 165 partnerships implementation partnerships already in existence. from 47 companies to-date. These cover 81 of the 169 For example: SDG targets in about 150 countries. The platform aims to publicly share lessons on what works and what does not, • The World Bank estimates that public-private drawing on both the examples provided by companies partnerships for infrastructure are now used in more and broader research.27 than 134 developing countries, contributing about 15 to 20% of total infrastructure investment.23 The majority of • Over 1,100 commitments have been made by companies investments, however, have gone to five major economies and investors that are participating in the We Mean (Brazil, China, India, Mexico and Turkey). There are also Business coalition, which was established as a common divergent opinions on how effective PPPs have been in platform to accelerate the transition toward a low-carbon meeting the needs of the poor, delivering efficiency and economy by amplifying the business voice, catalyzing lowering costs relative to funding and implementation specific actions and promoting smart policy frameworks.
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Although the commitments are made by individual • Between 2005 and 2014, the Clinton Global Initiative companies and investors, many of them involve some type tracked over 3,500 commitments made by its members of collaboration with other organizations. from different sectors, a large percentage of which are companies. Most of these are project-level partnerships • In 2014, USAID publicly released a data set listing nearly alongside some multi-stakeholder platforms. An assessment 1,500 public-private partnerships supported by the undertaken in 2014 showed that cross-sector partnerships Agency since 2001 under the auspices of USAID’s Global between at least one company and one NGO had more Development Alliance. Although some of these were than doubled during the period. CGI estimates that multi-stakeholder platforms engaging large numbers of together these commitments have improved the lives of partners, many were project-level partnerships. A team over 430 million people in more than 180 countries. from Brookings and Georgetown University analyzed the Some 41.8 percent had been completed, 39.9 percent were data and interviewed the executives of 17 U.S. corporations still underway, and 4.8 percent had been unsuccessful, that had engaged in PPPs with USAID (with their level with 1.6 percent stalled.29 of engagement ranging from 10 to over 60 partnerships each). The development issues that attracted the most • A less encouraging study undertaken in 2014 by the engagement from corporate partners where: economic International Civil Society Centre (ICSC) reviewed 330 growth, trade and entrepreneurship (accounting for 22% partnerships that were launched as commitments made of the number of PPPs); health (21%); and agriculture and at the World Summit on Sustainable Development in food security (13%).28 2002. Many of these were project-level initiatives. It found that, “38 percent of all the partnerships sampled are simply • The Every Woman Every Child network has a strong focus not active or do not have measurable output. 26 percent on catalyzing and tracking specific commitments from show activities, but those are not directly related to their organizations across a range of sectors, including business. publicly stated goals and ambitions.” 30 The study observed To date some 300 organizations have made financial, an underlying problem that many of the partnerships policy, service and delivery commitments, and many of reviewed, “...have vague and diffuse goals and lack these are in the form of project-level partnerships. appropriate monitoring and reporting mechanisms, making As of May 2014, some US$34.2 billion had been disbursed the causality between the output of the partnership and to various projects through these commitments. impact on the ground difficult to establish.” 31
• Business Fights Poverty, which dates back to 2005, is The challenge of evaluation and accountability for results one of the world’s largest online networks of professionals remains an important one for all levels of partnership. collaborating for social impact, connecting over 25,000 This is even the case at the project-level where the people from business, government and civil society. relationship between inputs, outputs, outcomes and impact Via its online platform, the organization has published over is usually or should be the most direct, let alone when it 5,000 case studies, reports and articles, many of which comes to the more complex and multi-dimensional global focus on partnerships for sustainable development. multi-stakeholder initiatives and platforms. It also facilitates open collaboration – both face-to-face and online – around specific, 3-to-9 month “Challenges” The above assessments capture what is likely only a fraction on issues ranging from youth employability to embedding of the thousands of project-level partnerships that companies the SDGs, with each driven by a core group of about 2-3 are engaged in around the world, but they offer a sense of companies, an NGO, an academic partner and a donor the range of activities underway at this level. Box 2 illustrates organization. some examples of these partnerships in different industry sectors and their role in supporting the SDGs.
20 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT II COLLABORATIVE PATHWAYS TO SCALE BUSINESS ENGAGEMENT IN SUSTAINABLE DEVELOPMENT
Box 2 Examples of project-based partnerships relevant to achieving the sustainable development goals in different industry sectors
Infrastructure partnerships: with transportation, food processing Pharmaceutical companies These include the more traditionally and retail companies to limit post- partnering with public and philanthropic defined public-private partnerships for harvest food loss or to fortify basic foods donors and research institutions to infrastructure development, especially and make them more accessible and accelerate the discovery, development and the growing number of them that have an affordable. Or partnering with human delivery of affordable drugs and vaccines explicit focus on building and servicing rights and environmental organizations for neglected tropical diseases. There are sustainable infrastructure that is more to embed responsible business standards also many examples where they have inclusive, more resource efficient and in supply chain relationships and to partnered with humanitarian organizations lower carbon.32 There is a major need establish independent evaluation and on projects and programs to improve the for blended finance partnerships in grievance mechanisms to monitor efficiency and quality of medical donations this area. This includes opportunities sustainability performance. during humanitarian crises. for engaging pension funds and other institutional investors, private equity Oil, gas and mining companies Banks and insurance companies and impact investors alongside public partnering with each other or with partnering with consumer goods and donors and governments in joint efforts donors, agribusiness and infrastructure ICT companies and donors or impact to de-risk large-scale projects, to fund companies to support shared investors to develop more inclusive the development of viable and bankable infrastructure projects in areas such financial services such as credit, savings project pipelines, and to strengthen the as energy, water and sanitation and and insurance for small-scale businesses environmental, social and governance transportation. Or partnering with and micro-entrepreneurs, smallholder performance of projects. donors, governments, trade unions farmers and low-income households. and NGOs on comprehensive local Or partnering with each other and with Food, beverage and consumer content programs to scale local skills public donors to mobilize blended finance goods companies partnering with development, employment and small and technical assistance to develop NGOs, farmers organizations, banks enterprise development or to improve inclusive infrastructure, fund clean and information, communications and community engagement, human rights technologies or implement innovative technology (ICT) companies to include and sustainability performance. new health and education initiatives, more smallholder farmers in a particular and other inclusive business models. commodity supply chain or partnering
As we look forward to achieving the SDGs, the following managerial and technical expertise will be needed to achieve categories of project-level, financing and implementation what is required. partnerships offer particularly high potential in helping to accelerate and scale business engagement in the SDGs: The challenge going forward is twofold. First, is the ongoing need to address longstanding obstacles to infrastructure 2.1 Sustainable infrastructure projects development. This requires improving regulatory environments, investment climates and government capacity, Despite ongoing critiques and controversy related to PPPs tackling corruption, removing price distortions, attracting for infrastructure, there can be no doubt that substantial and structuring both public and private project finance, investments in infrastructure, especially for energy, water and designing viable delivery and payment mechanisms. and sanitation, transport and telecommunications, will be Second, is the closely related need and business opportunity essential to ending extreme poverty, promoting shared to invest in and develop what is being termed as “sustainable prosperity and achieving the sustainable development infrastructure – projects that are socially inclusive, low carbon, goals. There can also be no doubt that private finance and and climate resilient.”33 As research by the Global Commission
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 21 II COLLABORATIVE PATHWAYS TO SCALE BUSINESS ENGAGEMENT IN SUSTAINABLE DEVELOPMENT
on the Economy and Climate has demonstrated, “Investing in If it were easy for large companies to invest in and build such sustainable infrastructure is key to tackling the three central models, partnerships with development actors would not challenges facing the global community: reigniting growth, be necessary. It is not easy. Both companies and low-income delivering on the SDGs, and reducing climate risk in line with populations face a variety of market, infrastructure and public the Paris Agreement.” 34 policy constraints making it difficult for them to engage on a commercially viable basis. Project-level financing and Institutional investors, especially asset owners such as pension implementation partnerships can help to overcome some of funds, insurance companies and sovereign wealth funds these constraints at an operational level, while larger coalitions will have a crucial role to play. In many cases, governments can help to tackle the challenges more systemically. and development finance institutions will need to partner with them to share risks and costs. Large companies, local Since 2005, for example, “…the IFC has committed more than businesses and social entrepreneurs can be incentivized and $12.5 billion and worked with over 450 inclusive businesses supported to develop affordable and reliable delivery models. in over 90 countries. These companies have integrated more Hundreds of new project-level partnerships are possible in than 250 million people into their core business operations, sustainable infrastructure. including farmers, students, patients, utility customers, and micro borrowers.”36 In almost all cases, other partners have 2.2 Partnership projects to build inclusive business models been involved in the process, ranging from local banks and information technology companies to NGOs and research Sustainable infrastructure that is designed and priced to be organizations. The Inter-American Development Bank has more socially inclusive is one example of inclusive business also been a leader in this area. There is untapped potential models. Box 2 illustrates others. They include agribusiness for increasing the number and scale of such project-level, companies committing to include more smallholder farmers inclusive business partnerships. They are not easy, however. in their supply chains. Healthcare companies, developing new Even project-level partnerships between two or three partners pricing, packaging and business models to make essential can be challenging to implement. medicines and diagnostics more accessible and affordable to low-income consumers. Commercially viable models Appendix I, for example, illustrates the broader ecosystem of developed by consumer goods companies to sell their organizations that were needed to deliver a four-year US$11.5 products through small and micro-distributors and retailers. million partnership between The Coca-Cola Company, the Oil, gas and mining companies investing in comprehensive Bill & Melinda Gates Foundation and TechnoServe to enable local content programs in the communities and regions small-scale fruit farmers in Kenya and Uganda to double their surrounding their capital-intensive operations. And financial incomes by building inclusive value chains. At its conclusion institutions that develop market-based solutions to provide in 2015, some 54,000 farmers were engaged in a variety of micro-finance savings, credit and insurance products to micro- value chains, 30 percent of them women. Producer incomes entrepreneurs and low-income households. had increased by an average of 142 percent and two local processor companies were certified to meet Coca-Cola’s In short, as the IFC summarizes, “Inclusive business models quality standards as suppliers. Minute Maid Mango – the are those which integrate low-income consumers, suppliers, first product to use locally sourced juice as a result of Project retailers or distributors in their core business operations, on a Nurture – was launched in September 2010 in Kenya and May commercially viable basis. By adopting the models, companies 2011 in Uganda. In addition to the three project partners, build the capacity of low-income farmers and entrepreneurs; relationships with a variety of other companies, government increase access to finance for suppliers and consumers; create departments, banks and local NGOs were needed to deliver or adapt products to meet local needs and requirements; these outcomes. The three partners needed to understand and develop innovative distribution approaches to hard-to- the entire value chain and system in which they were working reach communities.”35 They offer great potential for helping to in order to deliver commercially viable results for both the achieve a number of the SDGs. farmers and the company.
22 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT II COLLABORATIVE PATHWAYS TO SCALE BUSINESS ENGAGEMENT IN SUSTAINABLE DEVELOPMENT
Another example is The Niger Delta Partnership Initiative, project-level and in the form of larger coalitions, can help to which was established with an initial $50 million commitment achieve these objectives. by Chevron in 2009 to develop collaborative solutions to economic and social challenges in Nigeria’s Niger Delta. Business leaders and entrepreneurs in sectors such as Its local implementing partner, the Foundation for Partnership information and communications technologies (ICT), Initiatives in the Niger Delta has worked with over 20 partners, biotechnology, nanotechnology, materials sciences, the from donor agencies to different levels of government and sourcing, storage and distribution of energy, construction, NGOs, as well as the company’s community investment transportation and manufacturing have a particularly vital and local content teams in Nigeria, to design and manage leadership responsibility. As do the investors and bankers programs. These range from agricultural value chain initiatives who are financing them. First is their role as innovators of new to peace building activities. An independent evaluation products, services, business models, financing mechanisms conducted by the Initiative for Global Development found and enabling platforms. Second, is their role as influencers these partnerships were essential not only for resource of public policy, job creation, consumer behavior and mobilization, setting rigorous standards and accountability, sustainability outcomes. Their ability to build unconventional but also in terms of spearheading innovation and new models. partnerships with each other and with academics, policy makers, and labor, civic and environmental leaders will be Hundreds of similar project-level partnerships are being crucial to harnessing technology for more inclusive and implemented to build more inclusive business models and sustainable growth. value chains. They require similar persistence, executive leadership and an ability to understand the full value chain Dramatic growth in the reach and penetration of mobile and variety of partners needed. technology alongside access to the Internet has transformed affordability and access to information and services in finance, 2.3 Technology partnership projects as scaling and education, health, agriculture, energy, water and other utilities. enabling platforms It has enhanced the effectiveness and speed of humanitarian response, improved women’s empowerment and provided A third category of project-level partnerships that is linked platforms for civic and political activism. According to GSMA, to all the others and offers substantial potential for scaling the industry association for mobile operators, “…two thirds of business engagement in the SDGs is partnerships among the world, or 4.7 billion unique subscribers, are now connected science and technology-based companies with other by mobile networks with approximately 200 million additional companies and institutions in other sectors. Breakthroughs people being connected each year.”37 in the research, development, deployment and application of new technologies and the convergence of existing Since GSMA established its Mobile for Development initiative technologies offer immense possibilities for achieving the in 2007, about 50 mobile operators have participated in SDGs. They also create risks, especially in terms of their more than 100 project-level partnerships with a variety of implications for the future of work, inequality and the threat development partners and companies in other sectors. of other unintended ethical, social and environmental These and similar initiatives are demonstrating the potential consequences. to reach underserved populations on a commercially viable or social investment basis, and to develop scalable mobile One thing is clear, the speed, scale, scope and disruptive platforms that have measurable social and economic impact. nature of technological change are unprecedented. This change needs to be harnessed as much as possible Most of the top mobile operators are engaged, sometimes for the public good. The drivers and beneficiaries of through their foundations, but increasingly on the basis of technological transformation need to spread the positive commercial or hybrid business models. Innovators include impacts as widely as possible, and to support people who are Vodafone, China Mobile, Airtel, MTN Group, Telefonica negatively impacted or excluded. Partnerships, at both the to name a few. Likewise, leading telecommunications
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equipment service providers, such as Huawei Technologies, 2.4 Project partnerships to build skills and capabilities Cisco Systems and Ericsson, and software companies, such as Microsoft and SAP are partnering with the operators Almost all companies have workplace and community alongside agribusiness companies, banks and insurance programs focused on educating and training people to companies, pharmaceutical companies, and national develop the skills and expertise needed either directly and municipal governments, to deliver socially inclusive, for the company’s own business and industry sector or to environmentally smart and economically viable development improve employability and empowerment more broadly. solutions. These range from partnerships focused on STEM (science, technology, engineering and math) education or on building Some of the world’s best scientists work in multinational entrepreneurial mindsets and skillsets, to those focused on companies in sectors such as energy, pharmaceuticals, developing basic literacy skills. They range from university- chemicals and agriculture and nutrition. There are level scholarships and college readiness partnerships to early opportunities for them to partner more with their childhood education programs. Some support students with counterparts in universities and research institutes, and with high potential, others focus on youth at risk. a growing variety of public-private product development partnerships, which to-date have been particularly effective in Corporate leaders in the field of education, such as Pearson, mobilizing blended finance and expertise to develop essential IBM, GE, Cisco Systems and Microsoft engage in a full medicines and vaccines. A number of leading universities are spectrum of partnerships, from providing financing or also establishing sustainable energy initiatives working in employee volunteers to education institutions and building partnership with companies in the energy, material sciences, the capacity of teachers to undertaking policy advocacy. They transport and construction sectors. have also established comprehensive and often independent initiatives to evaluate the efficacy and impact of their Donor agencies and private foundations can provide education partnerships. A growing number are setting up catalytic financing to support companies in developing innovation funds, such as Pearson’s Affordable Learning Fund new technologies, applications and/or business models that or flagship projects such as Cisco’s Networking Academies, have the potential to be quickly scaled up or replicated. GE’s Developing FuturesTM in Education program, Pearson’s The widely cited partnership between Vodafone/Safricom Project Literacy platform, and IBM’s Pathways in Technology and the Department for International Development’s (DFID) Early College High Schools (P-TECH), to name just a few. Going Financial Deepening Challenge Fund in 2006, is just one forward workforce development partnerships and alliances example. This enabled the company to pilot the technology between companies, educators and policy makers to explore solutions and business models that led to the first generation the future of work in a digital economy are likely to become of mobile banking in Kenya, reaching over 17 million increasingly important. users within five years. Since then numerous additional partnerships and applications have been developed on this In conclusion, there are thousands of project-level, financing platform from health information to support for smallholder and implementation partnerships already in existence farmers. USAID’s Global Development Lab and Grand between individual companies and partners in other sectors. Challenges Canada offer two other examples of this They range from commercially driven alliances to large-scale catalytic role. social investment commitments. Many major corporations have established flagship programs to serve as the platform or umbrella for dozens if not hundreds of project-level partnerships. Some examples of these are provided in Table 1. While many project-level partnerships already exist, there is an urgent need for more of them to achieve the SDGs and for companies and their partners to focus on leveraging resources as efficiently and effectively as possible and on being rigorous in assessing impact.
24 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT II COLLABORATIVE PATHWAYS TO SCALE BUSINESS ENGAGEMENT IN SUSTAINABLE DEVELOPMENT
Table 1 Examples of flagship company partnership initiatives and co-investment funds (illustrating a variety of core business and social investment models)
Financing, • Bank of America’s Environmental Business Initiative, a US$125 billion commitment made in 2015, which researching builds on a prior US$53 billion program, and focused on financing a wide range of energy efficiency and low- and developing carbon energy projects. Also the US$8 billion Catalytic Finance Initiative, which the bank launched in 2014 environmental and subsequently engaged a number of other commercial and development finance co-investors. projects and • Citi’s Environmental Business Goal, a US$100 billion commitment for solutions that meet criteria such as technologies renewable energy, energy efficiency, sustainable transportation, green buildings and water. Also, Citi for Cities, which partners with cities on financing advice, efficiency optimization and digitization of services. • Dow’s Breakthrough to World Challenges commitment that exceeded its 2015 goal of achieving at least three breakthroughs that will significantly help solve challenges in the areas of food, water, health, energy and climate change, working in partnership with companies, academics and NGOs.
Inclusive • Unilever’s Enhancing Livelihoods Fund, a partnership with Oxfam and Ford Foundation to provide loans, nutrition and guarantees and grants to incentivize suppliers to invest in new processes that meet sustainability criteria. agricultural Also, the Nutrition Intervention Programme, a partnership with the Global Alliance for Improved Nutrition value chain aiming to enhance nutrition and hygiene for 2.5 million smallholder farmers. initiatives and • Mars and Danone’s 3F Livelihoods Fund for Family Farming, which funds suppliers, impact investors livelihood and public development institutions to implement initiatives to improve the ecosystems, productivity and funds livelihoods of rural farming communities. To-date Euros 120 million have been invested and the aim is to work with some 200,000 farmers towards more sustainable practices. • Nestle’s Farmer Connect programme, which is committed to local sourcing of raw materials and works in a variety of partnerships to engage with about 780,000 mostly smallholder farmers, accounting for half the company’s dairy ingredients and significant violumes of coffee and cocoa. • DSM’s Improving Nutrition, Improving Lives partnership with the World Food Programme (WFP), which aims to improve the nutritional value of food delivered by WFP through product innovations, such as fortified rice. In 2015, WFP reached 28.2 million people with food that was improved by this partnership. • SABMiller’s 4e, Camino al Progreso (Path to Progress) partnership with FUNDES, Inter- American Development Bank and others, providing business and leadership skills and funding to reach 200,000 small retailers in Latin America by 2020.
Women’s • Walmart’s Global Women’s Economic Empowerment Initiative, which has committed to source US$20Billion economic from women-owned businesses in the US; double spend with women’s businesses globally; train one million empowerment women in farms and factories; and promote gender diversity among Walmart’s suppliers. partnerships • Coca-Cola’s 5by20 initiative aims to enable the economic empowerment of 5 million women entrepreneurs in its value chain by 2020 as producers, suppliers, distributors, retailers, recyclers and artisans, through partnerships with local NGOs and global partners such as UN Women, TechnoServe and others. The initiative has reached more than 1.2 million women across 60 countries. • Gap Inc.’s P.A.C.E (Personal Advance and Career Enhancement) workplace program, which trained 28,000 women factory workers between 2007 and 2015 on a variety of skills, working with CARE, International Centre for Research on Women (ICRW) and Swasti Health Resource Center.
Access • Abbott partnered with Tanzania’s Ministry of Health in 2001 in a joint effort to strengthen the country’s to health healthcare system. In the past decade, more than $100 million has been invested in modernizing services in partnership the country’s leading teaching and referral hospital and 23 regional-level hospitals, serving millions of people programs from urgent emergency care to laboratory tests and chronic disease management. • Merck for Mothers, a 10-year, US$500 million commitment to apply the company’s scientific, business and global health expertise and resources in partnership with others to reduce maternal mortality. To-date it has improved access to health services for an estimated 5.2 million women in 30 countries. • GSK and Save the Children’s partnership, which aims to help save one million children’s lives over five years. To-date working jointly on programs in 37 countries from improving access to basic healthcare, developing child-friendly medicines, training health workers and joint advocacy for child health policies. • AbbVie’s Neglected Diseases Initiative, which has shared the time and technical expertise of 160 of the company’s scientists, more than 120,000 compounds and scientific tests to partners such as Drugs for Neglected Diseases initiative, Medicines for Malaria Venture, and the TB Alliance and TB Drug Accelerator.
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3 Industry-level, precompetitive business alliances
There are a growing number of examples where groups Four notable examples that offer useful lessons for other of companies are coming together on a precompetitive trade and industry associations are summarized in Table 4. basis in either the same industry or across industries to These are just four examples from a possible universe of jointly address the risks and opportunities of sustainable hundreds of representative trade, industry and business development and drive change at an industry level. associations. If large numbers of trade and industry associations were to take a more strategic and ambitious Such business alliances now exist in most industry sectors. approach to encourage or even require their member To-date, the majority of them have focused on developing companies to support the sustainable development goals, common principles, and in some cases creating a level playing the multiplier effect would be substantial. Collectively, field for establishing standards and targets for improving these associations reach thousands of companies in almost sustainability performance and reporting on an industry-wide every country, with millions of employees, influence with basis. Today, a growing number are also focused on mobilizing governments, and substantial revenues and R&D spend. joint business resources to overcome systemic obstacles to scaling and replicating promising innovations and business A 2013 study of just five associations (the Consumer Goods models or undertaking policy advocacy targeted specifically Forum, IFPMA, CropLife International, the International at supporting sustainable development. A few of them are Fertilizer Industry Association and the European Chemical addressing all of these goals within the same alliance. Industry Council), for example, found that the annual revenues of their member companies were about US$4.3 trillion. Two broad types of precompetitive collective business action The authors concluded, “As trade associations advance their have emerged to drive sustainable development over the programming along a business and society trajectory, they past two decades: will not only increase their ability to be force multipliers on important issues; they will also simultaneously increase their 3.1 Representative industry bodies value proposition for their member companies.”38
Representative business organizations, such as Chambers The CEOs of leading companies are starting to put pressure of Commerce, Organizations of Employers or Trade and on their trade associations to take a more progressive stance. Industry Associations, have obviously been established for More CEOs should follow their lead. At the same time, given decades in most sectors and countries as well as at a global public distrust in the political lobbying activities of many level. They focus mainly on advocating for and promoting industry associations, such actions could raise additional direct, competitive business interests for their hundreds and concerns about ‘big business’ having undue influence. sometimes thousands of member companies. They are often These concerns must be understood and respected. criticized for playing to the “lowest common denominator” in Trade and industry associations can help to address them order to represent all their members, and for defending the by being transparent about their funding and activities, status quo or taking an obstructionist approach to policies setting public goals and commitments and being open to that further the goals of sustainable development. independent evaluations on progress. The four associations profiled above are demonstrating what is possible. A vanguard of these associations, however, is starting to take a much more proactive and progressive stance on key sustainability issues and are establishing dedicated units or programs focused on addressing them. In the vast majority of cases, a small cohort of influential member companies and their CEOs is spearheading this evolving leadership role.
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Table 2 Examples of trade and industry associatons leading on sustainable development
Making industry-wide The Consumer Goods Forum (CGF). CGF can trace its history back to 1953, and today has the public commitments to vision of “achieving better lives through better business”. With over 600 manufacturing and retail achieve sustainability member companies and a 50-member CEO-led Board, the CGF has established pillars of work goals and targets on environmental and social sustainability, health and wellness and food safety, among others. The work of each pillar is guided by public resolutions and commitments, with specific time bound targets that aim to drive industry-wide focus and performance on relevant challenges. They include commitments on addressing deforestation, the use of HFC refrigerants, food waste, forced labor and health and wellness. In 2016, the Global Social Compliance Programme was also integrated into CGF, which is a cross-industry effort to drive convergence in tools and reporting to improve social and environmental performance in consumer goods supply chains.
Establishing industry- The International Council of Chemical Associations (ICCA). Alongside some of its regional wide performance affiliates, ICCA was one of the first trade associations to publicly address issues of health, standards and a safety and environment. In 1985, in response to the Bhopal Disaster, the Canadian chemical Technology Roadmap industry established the Responsible Care program to drive continuous improvement in health, environmental and security performance and improve stakeholder engagement. A global charter was adopted in 2006 and the program is new implemented by national chemical associations and companies in more than 60 countries. In the past few years ICCA has also launched programs on sustainable development, focusing on the role of chemicals in improving access to health, food security and clean water, among other issues, and on energy and climate. This includes a Technology Roadmap initiative, focused on exploring and promoting technologies that can drive new business value while explicitly tackling global social and environmental challenges. ICCA’s members account for 90 percent of all global chemical sales and it points out that, “95 percent of all manufactured goods are touched by chemistry.”39
Producing an industry- The International Federation of Pharmaceutical Manufacturers and Associations (IFPMA). wide Code of Conduct IFPMA represents the world’s largest biopharmaceutical companies and regional and national and Health Partnerships associations. Its members include the world’s top ten biopharmaceutical companies by revenue Directory and the industry spends US$141.6 billion a year in R&D. In 2012, it produced an expanded Code of Conduct, which all its members are required to sign. It maintains a developing world Health Partnerships Directory profiling more than 250 partnerships examples from its members, which is the largest of its kind and has been evaluated by Business for Social Responsibility. In 2012, IFPMA made a pledge with some of its member companies to increase investment partnerships in Neglected Tropical Diseases (NTDs) and to provide about 1.4 billion annual treatments until 2020 targeted at nine diseases that account for some 90 percent of NTDs.
Establishing an industry- GSMA. GSMA, which represents 800 mobile operators and other companies in the mobile wide benchmark to ecosystem is the first representative industry association to produce a public report outlining assess contributions to the industry’s contribution to the Sustainable Development Goals. The 2016 Mobile Industry the SDGs Impact Report, “…establishes a benchmark through which the industry will assess its success in contributing to the SDGs. It serves as a blueprint for other industries as they commit to achieving the SDGs.” GSMA’s Mobile for Development initiative supports over 100 project partnerships that aim to test and spread scalable innovations and partnerships in mobile solutions to address a range of development priorities. These include solutions in mHealth, mAgri, Digital Identity, Mobile Money, Connected Women and Disaster Response.
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3.2 Dedicated corporate responsibility and sustainability In recent decades a number of interesting joint initiatives leadership groups have also emerged where business leadership coalitions have achieved an even greater multiplier effect by combining Although representative business associations at the global, their efforts to spread good practices, mobilize resources regional and national level reach the largest number of and/or advocate for policy reforms related to sustainable companies, a second group of business-led, precompetitive development. alliances has emerged over the past two decades that includes a smaller number of companies, but has been One of the most successful examples and models to date has more influential in driving the agenda for sustainable been the We Mean Business coalition. This coalition consists development. These are self-selected business leadership of other business-led groups working together on a sector groups or corporate responsibility coalitions.40 They are and cross-industry basis, as well as several hundred individual business-led, business-funded and self-governed and they companies and investors. They are jointly advocating for have a dedicated focus on addressing sustainability issues specific public policies and jointly committing to specific relevant to their industry or countries of operation. In almost business actions aimed at accelerating and scaling the all cases they have been established by a relatively small transition to a low carbon economy. The coalition played start-up cohort of business champions at the CEO level, and a key role as a collective voice of business in supporting the most successful ones remain CEO-led. the negotiations leading to the Paris Climate Agreement, advocating on both a global basis and with key national A notable, but by no means comprehensive list of sector- governments. It is profiled on page 36. focused examples is profiled in Box 3. They all demonstrate the multiplier effect of large companies working together Another example is the Cross-Sector Biodiversity Initiative, on a precompetitive basis to drive sustainable development where ICMM from the mining sector, IPIECA for the oil and in their own industry sector and along their key global gas sector and the Equator Principles banks have joined supply chains. Several of them have undergone independent forces to develop tools and guidance and share good reviews or evaluations to assess their impact and to help practices related to biodiversity and ecosystem services in strengthen their collective role. the extractive industries.
There are also a number of global cross-industry initiatives Another development over the past few decades has been the with a dedicated focus on working collaboratively to achieve growth in country-level, cross-industry corporate responsibility sustainable development at both the global and national and sustainability coalitions. Research in 2013 carried out by levels. Four notable examples are: the Doughty Centre for Corporate Responsibility at Cranfield University and the Corporate Responsibility Initiative at • The CEO-led World Business Council for Sustainable Harvard Kennedy School, found that, “Around 70 countries Development, which brings together more than 200 have some form of business-led corporate responsibility leading multinational companies and a network of some coalition, including more than two-thirds of the world’s 100 70 national business councils; largest economies.” 41 • Business for Social Responsibility, which is a collaborative network of some 250 companies across major Notable examples include: Business in the Community in industry sectors and countries; the United Kingdom; Swedish Leadership for Sustainable • The World Environment Center, which spreads good Development; the National Business Initiative in South Africa; practice on environmental management; and Philippine Business for Social Progress; Maala-Business for Social Responsibility in Israel; the Vietnam Business Forum; • The B Team a group of about 20 entrepreneurs, the Dutch Sustainable Growth Coalition; Instituto Ethos in business leaders and thought leaders who are working Brazil; and the Council for Better Corporate Citizenship in collaboratively to catalyze a better way of doing business. Japan.
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Box 3 Examples of sector-specific corporate leadership coalitions focused on sustainable development
The International Council on Mining (arable and vegetable crops, beef, coffee, IPIECA: This alliance brings together and Metals: This is a coalition of 23 of the dairy, fruit and water), aiming to share 36 multinational corporations and 16 world’s leading mining companies and 34 knowledge on ley issues and generate industry association representing a further regional and national mining associations, business solutions and investments that 400 companies to improve environmental which together are responsible for a affect the lives of millions of farmers. and social performance in the oil and significant proportion of global minerals gas industry. Its members account for The Global Agribusiness Alliance: and metals production, and is dedicated 60% of the world’s production in some In 2016, a new alliance was established fully to improve safety and sustainable 146 countries. Working groups focus on involving 36 agribusiness companies development in the sector. Founded issues such as climate change, health, headquartered mainly in Asia, Africa in 2001, membership is at the CEO- biodiversity and ecosystems services, ad the Middle East, with an explicit level and all members are required water, social responsibility and health. commitment to support the SDGs and to commit to a set of 10 Sustainable tackle some of the major environmental GBCHealth: This is a cross-industry Development Principles, supporting and social challenges facing agricultural coalition with a dedicated focus on position statements and transparent and supply chains and rural communities. investing business resources and accountable reporting practices. technology in improving global health. The Equator Principles: In 2006, the IFC The Electronic Industry Citizenship Created in 2001 by a small group of co-convened a small group of seven Coalition: EICC was established in 2004 17 companies and initially focused banks to develop a joint risk management by eight companies to develop and on tackling HIV/AIDS and then also framework, modeled on the IFC implement a Code of Conduct aimed at tuberculosis and malaria, GBCHealth has Performance Standards to identify and driving industry-wide improvement on worked with hundreds of companies to manage social and environmental risk in social, environmental and ethical issues establish workplace, community and projects. Today, the principles have been in the electronics supply chain. Today, it national-level health partnerships. It officially adopted by about 84 financial has some 110 member companies in the also provides a private sector platform institutions and cover over 70 percent electronics, retail, auto and toy sectors, for global multi-stakeholder initiatives of international Project Finance debt in and a strong focus on workers’ rights and such as The Global Fund to Fight AIDS, emerging markets. wellbeing, and set of working groups Tuberculosis and Malaria, the Roll Back targeted at addressing challenging issues The Principles for Responsible Malaria Partnership, and Every Woman in the value chain. Investment: Created in 2006, with Every Child. support from the UN Global Compact The Sustainable Agriculture Platform: Global Business Coalition for Education: and UNEP, the PRI established a set of six SAI Platform was created in 2002 by a Created in 2012 by a founding group of 15 principles to accelerate the integration small group of seven food and drinks companies, GBC-Education now has more of ESG factors into financial investment. companies with a dedicated focus on than 30 corporate members. It is focused Today, it has 1,500 signatories, mainly achieving sustainable production and on mobilizing the voice, capabilities, asset managers but also a growing sourcing of agricultural raw materials. resources and innovations of the business number of asset owners, which Today, its 50 members include seven of community to accelerate progress in collectively manage an estimated the world’s top agribusiness companies delivering quality education. $60 trillion. and are focused on six working groups
In summary, over the past few decades a relatively small important in industries and value chains that have a major number of industry-level, precompetitive business alliances impact on the environment or the human rights, quality of have demonstrated the potential to spread industry-wide life and opportunities for poor people. Examples include standards, mobilize financial resources and expertise, infrastructure, health, nutrition, energy, water, agriculture, and influence market trends and public policies towards forestry, metals and mining, information technology, more responsible, inclusive and sustainable growth. financial services, manufacturing, logistics, transportation These precompetitive, business-led models offer untapped and automotives, and tourism. potential going forward. They are likely to be especially
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4 Multi-stakeholder institutions, platforms and networks
the Ethical Trading Initiative; the Global Network These are formal institutions or informal platforms and Initiative; the Garment Industries Transparency Initiative; networks where groups of companies are collaborating the Better Work program; the Bangladesh Accord and with governments, donors, investors, NGOs, trade unions, Alliance initiatives; and the ACT (Action, Collaboration, producer associations and/or academic and research Transformation) initiative on living wages. institutions – and in some cases a combination of all these together. They are often multi-dimensional in nature and • Improving natural resource governance and impact on aimed at overcoming broad market failures or governance people and the environment: the Extractives Industries gaps to achieve more transformational change nationally, Transparency Initiative; the Voluntary Principles on Security globally or on a sector-wide basis. and Human Rights; Marine and Forest Stewardship Councils; the Water Resources Group; and a number of They demonstrate wide variance in terms of leadership, commodity-specific certification programs in agriculture, funding and governance. Some are independently funded forestry and minerals. and governed institutions, while others are dynamic • Tackling corruption and money laundering: the networks, communities of practice and open-collaboration Partnering Against Corruption Initiative hosted by the and innovation platforms. Despite their diversity, most share World Economic Forum; Transparency International’s a common goal of combining the resources, capabilities sector and country-based Integrity Pacts, especially in and interests of many actors across sectors to achieve more large-scale construction, infrastructure development and systemic change than any group could achieve on its own. public procurement; the Wolfsberg Group (an association of thirteen major banks focused on developing frameworks Although no comprehensive or exhaustive database exists, and guidance to tackle financial crimes); and the UN Global in part due to definitional challenges, there are likely several Compact’s Working Group on Anti-Corruption. hundred multi-stakeholder initiatives operating at global and national levels. Since 2002, there has been an estimated fourfold increase in the number of multi-stakeholder 4.2 MSIs to mobilize public and private finance and initiatives (MSIs) at the global level.42 Many of these have expertise for sustainable development country-level implementation bodies or affiliates. Other global MSIs have been established with the primary 4.1 MSIs to spread responsible business standards goal of mobilizing financing, expertize and other resources to meet crucial sustainable development needs, such Some of the global MSIs have focused primarily or as improving the productivity, incomes, livelihoods and exclusively on developing principles for responsible resilience of low-income producers and improving access to business and spreading responsible business standards health, food security, nutrition, energy, education, training, along global supply chains. Well-established MSIs in this technology and financial inclusion. Well-known examples, area that have been in existence for eight years or more and most of which have been independently evaluated, include: that have undergone independent evaluations include: • Health and nutrition: GAVI – the vaccine alliance; the • Spreading universal principles: the UN Global Compact Global Fund to Fight AIDS, Tuberculosis and Malaria; and its principle-based framework for business in human the Global Alliance for Improved Nutrition; Scaling Up rights, labour, the environment and anti-corruption. Nutrition; and a number of other disease specific or population-specific global health funds (examples include • Improving human rights, social and environmental Medicines for Malaria Venture; the TB Alliance and TB performance in consumer goods, electronics and Accelerator; Every Women Every Child, among many). apparel supply chains: the Fair Labor Association;
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Box 4 Examples of multi-stakeholder city alliances
Established and still largely funded The Smart Cities Council brings The 100,000 Opportunities Initiative is by the Rockefeller Foundation, 100 together more than 20 companies a US-based network based in key cities Resilient Cities is a network of 100 that are leaders in digital technology, that aims to demonstrate a scalable cities from around the globe, selected industrial design and construction, with model for connecting the 5.5 million on a competitive basis and focused on advice from universities, laboratories young Americans aged 16-24 who are taking a systems approach to building and standards bodies, to support local not in education or work with skills economic, social and environmental governments. Their goal is to share and jobs. It is focused on a group of resilience and sharing and spreading policy frameworks, detailed guidance demonstration cities and supported by good practices with each other. Over and financing templates with cities about 50 leading companies, mostly in 1,000 cities applied to be part of the to improve three core goals: livability; consumer goods and retail, with a goal network. Although the initiative has a workability; and sustainability. to support 100,000 young people to number of corporate partners, there is prepare for and gain jobs.
massive untapped potential for many more companies and local chambers of commerce to get engaged.
• Biodiversity, food, agriculture and forestry: the Global the Bill & Melinda Gates Foundation, Rockefeller Foundation Environment Facility; the New Vision for Agriculture (Grow and UN Foundation playing particularly active leadership Africa and Grow Asia); the New Alliance for Food Security roles. The engagement of private sector companies and and Nutrition; Alliance for a Green Revolution in Africa; the business champions has grown overtime in many of them, Tropical Forest Alliance; and commodity-specific value- although large companies and investors have played a key chain coalitions (the World Cocoa Foundation; Aquaculture role in establishing a few of these initiatives, ranging from Stewardship Council, Better Cotton Initiative, Roundtable EITI and the Global Network Initiative to the New Vision for on Sustainable Biofuels, Global Roundtable on Sustainable Agriculture. Beef, Roundtable on Sustainable Soy, Bonsucro, Forest Stewardship Council, and Marine Stewardship Council, There are also a growing number of city-based MSIs that are among others). bringing together diverse public, private and civic actors. Box 4 illustrates three examples, among many. • Clean water and sanitation, energy access and infrastructure: Sustainable Energy for All; the Global Most of these MSIs have been subject to critiques by scholars Infrastructure Facility; the Global Alliance for Clean Cook and NGOs. Not surprisingly, MSIs are the most challenging Stoves; the Global Water Partnership; the Water Resources types of partnership to build and sustain. They face particular Group; and Power Africa. challenges in terms of governance and accountability, • Financial and digital inclusion: the Consultative Group especially given the power dynamics that are often involved to Assist the Poorest; the Better Than Cash Alliance; the and the combination of public sector resources with Alliance for Affordable Internet. potential private sector benefits. They are also operationally • Training and education: the Global Partnership for challenging to manage and usually require a backbone Education; Let’s Work coalition. organization or intermediary to facilitate alignment, mediation, communication and coordination of the many • Humanitarian assistance: NetHope; Logistics Emergency participants and levels of engagement. Team; Partnership for Quality Medical Donations. Despite these challenges, emerging evidence suggests Most of the global MSIs and their country platforms, whether that they offer ongoing potential to drive the type of focused on spreading responsible business practices or transformational or systemic change that is needed. mobilizing financial and other resources, have been initiated This is especially the case with those that are targeted at a and led by intergovernmental bodies such as the United specific sector and/or a clearly defined set of sustainability Nations and the Word Bank. Several have also had goals, and that cover a range of both market interventions substantial start-up support from private foundations, with and financing mechanisms with public policy engagement.
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Box 5 What works in multi-stakeholder institutions, platforms and networks
Multi-stakeholder initiatives are not to Country ownership is key in most cases: Identify common performance be entered into lightly. All alternatives Where global MSIs are delivered through and impact metrics and commit to should be considered, especially before country-level platforms, it is essential independent evaluations: Due to the establishing an independent institution that they are publicly championed existence or potential of public distrust and governance structure. If a decision is by the Head of Government and/or and the diversity of participants, interests made to proceed, the following factors relevant Ministers in these countries, and expectations associated with most have been highlighted in a number of and aligned to relevant national plans. MSIs, it is important to agree on common studies on MSIs and are reflected in the Likewise, business and NGO participants metrics for performance at the outset and experiences of the MSIs listed in this should work through and empower their also be willing to invest in independent section: country-level subsidiaries or affiliates evaluations on a mutually agreed time wherever possible and/or engage local table. Such evaluations should be used for Strong and credible governance is private sector and civil society actors. joint learning as well as accountability. paramount: MSIs need to demonstrate strong governance and accountability Recognize and leverage the Be willing to invest resources in a mechanisms, with participating complementary leadership roles of backbone organization or secretariat: companies, governments and NGOs all senior champions and practitioners: Given the complexity of many global required to report publicly on progress Complex MSIs often require the support MSIs, most of them need dedicated and with a strong focus on assessing of top-level leaders to ensure sustained and preferably independent support relative costs and benefits for end-users funding and attention, given the time and to coordinate the diverse levels, or beneficiaries. resources needed to build them. Regular interventions, projects and players galvanizing and milestone events can involved. At a minimum, such support is Creating a shared vision for change is be used to keep them engaged. At the required at the global level, but is often essential to align diverse participants: same time, participating organizations also necessary at country-levels where It is worth investing substantial time must allocate talented and respected relevant. and resources upfront to build mutual practitioners to manage relationships and understanding and trust and to develop engagement on a day-to-day basis. Different types of entity can act as a a joint and clearly stated shared vision, backbone organization. In some cases strategy and goals for achieving scale and Take a holistic ecosystem or whole of an independently governed and funded transformational change. These should be value-chain approach: Understanding secretariat can be established, as was based on a rigorous consultation process, the ecosystem and its key players, the case with GAVI, the Global Fund and with participants of the partnership as constraints and leverage points is GAIN. In others a trusted foundation, well as pother stakeholders, and where often crucial to success – and is usually intergovernmental body or nonprofit relevant, science-based targets. required on a country-by-country organization can play this role. The United basis given the importance of context. Nations, for example, acts as the host A set of operating principles and/ Linked to this, most of the longstanding for the UN Global Compact, Sustainable or comprehensive guidance MSIs combine innovative financing Energy for All and Every Woman Every provides a foundation for effective mechanisms and operational delivery Child, among others. The World Economic implementation: Establishing some with some element of public policy Forum serves as the backbone for “rules of engagement” in addition to engagement or advocacy. Likewise, even initiatives such as the New Vision for outcome-based goals can be essential if they are aiming to address a specific Agriculture, the Tropical Forest Alliance, for setting and managing expectations, sustainable development challenge and Internet for All. Foundations such as clarifying roles and responsibilities and or set of challenges, they usually look the Rockefeller and UN Foundations have ensuring effective communications and at the range of social, economic and also incubated and served as backbone conflict resolution. environmental outcomes and potential support for new multi-stakeholder unintended consequences in designing initiatives. and implementing their interventions.
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5 Coordination among different levels and types of partnerships to drive systemic change
It is important to note that none of these partnerships at consumption or demand dynamics of the market in order to different levels are mutually exclusive. If impact at scale is achieve change that is sustained and effective. to be achieved, the following three types of linkages will be essential: Linkages between the different SDGs: It is also important to note the systemic relationships between the SDGs themselves. Linkages between different levels of partnership: Leading Although framed as 17 separate goals, almost all of them have companies are often participating or playing a leadership the potential to either reinforce or undermine each other role in all levels simultaneously. They are engaging in dozens depending on how they are addressed. Many companies and of different partnerships within their own supply chains, partnerships are focused on identifying one or a small number for example, and with other companies and non-business of SDGs to prioritize; usually those aligned most closely with partners at the project-level. At the same time, most large their core business risks, opportunities and capabilities. At the companies are participating in between five to 30 partnerships same time, it is essential to understand the linkages between at the industry-level and in multi-stakeholder platforms and all the different SDGs, at a minimum in order to avoid negative networks. impacts and ideally to leverage positive relationships. When a company or partnership is focused on SDG#3 to improve Likewise, almost all of the most effective global-level multi- health and wellbeing, for example, it should also explicitly stakeholder initiatives are effective primarily because they have assess how this supports SDG#5 on gender equality. Or a either country-level implementation networks and/or because partnership prioritizing SDG#7 on affordable and clean energy, they are explicitly aimed at empowering diverse innovation for example, should also understand its relationship to SDG#3 and implementation through many separate project-level on health and wellness, SDG#5 on gender equality, SDG#8 on partnerships and collaboration along specific supply chains. decent work and economic growth, and so on.
Diagrams 2 to 4 illustrate what this cascade effect looks like In summary, individual companies are increasingly part of a in practice in the cases of the New Vision for Agriculture, the dynamic ecosystem of sustainable development partnerships. Global Alliance for Improved Nutrition and We Mean Business. Some of these are led by business, others by governments Similar diagrams would be relevant for most of the major or civil society. Many are at the project-level, while a smaller global multi-stakeholder initiatives such as the vaccine alliance number are industry-level, business alliances or global and GAVI, the Global Fund to Fights AIDS, Tuberculosis and Malaria, national-level multi-stakeholder initiatives. Most of these the Global Alliance for Clean Cookstoves, and the Extractive different types and levels of partnership are constantly evolving Industries Transparency Initiative, to name a few. and non-traditional in nature. Business leaders increasingly need to be system leaders. They need to understand and be Linkages between different types of interventions: In addition, more actively engaged in shaping the partnership ecosystem the most effective partnerships usually involve a set of different in which they participate, and its relationship to their own interventions, even at the project-level. For example, those corporate strategies, cultures and performance. that are focused on spreading responsible business standards may also be exploring new business models and/or innovative Appendices 2 to 6 illustrate examples of the evolving financing mechanisms. Many of the most effective market- partnership ecosystem in the cases of: food and agriculture; based partnerships that are focused on delivering commercial health and wellbeing; financial services for sustainable business results are also engaged in public policy advocacy or development; and metals and mining. technology innovation. Initiatives focused at the production or supply end of a value chain usually need to understand the
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Diagram 2 The New Vision for Agriculture and its network of partnerships
The New Vision for Agriculture (NVA) the leaders of farmer organizations to By the end of 2015, the organizations was launched by the World Economic operational practitioners) and more than and partnerships involved in NVA Forum (WEF) in 2010, with initial support 500 different institutions were engaged had committed over $10.5 billion in from 17 champion companies and their in the NVA network. The backbone teams investments, of which almost $1.9 billion CEOs. A small team in WEF and a couple at the Forum, and in Grow Africa and had been realized. More than 90 value of regional secretariats (Grow Africa Grow Asia, helped to build and support chain projects had been established in and Grow Asia) provide the backbone independent national and state-level a variety of agricultural commodities. support, playing a vital role in mobilizing, platforms in 19 countries with a strong They had reached 9.6 million smallholder aligning and coordinating the diverse commitment to country ownership and farmers, most of them in Africa. efforts of numerous institutions and action. In each location, market-driven Project evaluations showed participating individuals in the network, across sectors, projects were established, led by private farmers had increased yields and incomes countries and agricultural commodities. sector companies. These are rooted in between 10% and 75%, as well as Between 2010 and 2015, some 1,400 viable business cases and take a holistic improving technologies, farming individuals (ranging from Heads of State, approach to understanding the full value and environmental practices. the CEOs of companies and NGOs, and chain for the commodities in question.
Mozam- Nigeria Rwanda bique Cambodia Malawi Private Sector Senegal Indonesia Linkages More than 30 of the world’s Kenya with other leading agribusiness companies Tanzania Myanmar WEF platforms and local business partners, with The NVA team also coordinates senior level executives and country Ghana a network of corporate trustees, Grow Grow directors serving as champions a Global Future Council on Africa Asia Philippines and operational practitioners and Ethiopia Food Systems and Security functional experts supporting (composed of leading topic project-level partnership building Vietnam experts) and a Transformational Côte and implementation. d’Ivoire New Vision Leaders Network (consisting of Karnataka Burkina for about 150 system leaders who Faso Agriculture Maharashtra play a crucial implementation Benin role). In addition, NVA is building Government linkages with other relevant WEF Heads of State, Ministers of Mexico Other states* initiated platforms such as the Agriculture and their teams, as Latin 2030 Water Resources Group well as some State Governments Other India countries America and the Tropical Forest Alliance. in partner countries, have been crucial champions and co-funders. Donor governments, notably the Netherlands, Canada, Switzerland, Australia, the U.K. and the U.S. have provided support, alongside Civil Society intergovernmental organizations Key farmers associations, NGOs such as ASEAN, the African Union, and academic and research NEPAD, the G20, World Food organizations have provided on- Programme, FAO, IFAD and the-ground knowledge, expertise, the World Bank. outreach capacity and legitimacy.
Source: Nelson, Jane and Beth Jenkins (2016), Tackling Global Challenges: Lessons in System Leadership from the World Economic Forum’s New Vision for Agriculture Initiative
34 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT II COLLABORATIVE PATHWAYS TO SCALE BUSINESS ENGAGEMENT IN SUSTAINABLE DEVELOPMENT
Diagram 3 The Global Alliance for Improved Nutrition and its network of partnerships
The Global Alliance for Improved Nutrition implement scalable interventions to (SUN) Business Network, co-convened by (GAIN) was established in 2002 during overcome micronutrient deficiencies. Two GAIN and the UN World Food Programme. a Special Session of the UN General core pillars of action have been supporting GAIN also catalyzes private investment Assembly on Children, with support from large-scale, country-led national food and innovation through other funding and some donor governments and the Bill & fortification programs and catalyzing research alliances, examples of which are Melinda Gates Foundation (BMGF). It is an innovative market-based solutions aimed outlined below. independent non-profit foundation with a at leveraging the financial, technical and As of 2016, GAIN had helped 892 million multi-stakeholder governance and funding operational capabilities of the private people to access affordable, nutritious structure, as well as a strong technical sector. food – about 350 million of whom are advisory component. To facilitate its engagement with the women and children, and its work to fortify GAIN has focused primarily on building private sector GAIN established a Business staple foods and condiments with essential partnerships with governments, UN Alliance in 2005, which more recently micronutrients reaches more than 30 agencies, NGOs and companies to evolved into the Scaling-Up Nutrition countries worldwide.
EXAMPLES OF GAIN’S ALLIANCES TO ENGAGE BUSINESS
SUN Business Network (SBN): As of 2015, The GAIN Nordic Partnership: Established The Global Alliance SBN had over 100 corporate participants, in 2014 with support from Arla Foods for Improved both multinationals and domestic Ingredients, Tetra Pak, DanChurdhAid, and Nutrition (GAIN) companies in target countries. They have the Confederation of Danish Industry, this made some 160 public commitments to alliance aims to support nutrition initiatives implement and track a variety of market- along key food value chains in Africa, based approaches to improving nutrition, starting with dairy. with a combined goal of reaching 125 The Marketplace for Nutritious Foods: EXAMPLES OF GAIN’S GLOBAL million consumers every year by 2020. AND NATIONAL MULTI- Initiated in 2012 with USAID and local STAKEHOLDER PARTNERS Business Platform for Nutritious Research: food companies in Mozambique, Kenya Founded in 2013 with 10 companies and Rwanda, this initiative aims to support • The Micronutrient Initiative (Ajinomoto, Arla Foods, BASF, Britannia, small and medium-size food production, • The Iodine Network Royal DSM, GlaxoSmithKline, Mars Inc., processing and distribution companies • The Flour Fortification Initiative Nutriset, PepsiCo, and Unilever) and support along local agricultural value chains to from the Government of Canada, this aims improve the availability and affordability of • National Fortification Alliances: to identify and address evidence gaps that nutritious food. Country-led public-private platforms constrain business investment in nutrition. in over 30 countries The Malnutrition Mapping Project: The Amsterdam Initiative Against An initiative co-lead by GAIN and Amway Malnutrition: Founded in 2009 with Corporation to compile malnutrition data support from the Dutch Ministry of Foreign at the country-level and make it available Affairs, the Dutch NGO ICCO, multinational and relevant for policy makers, public health PROJECT-LEVEL PARTNERSHIPS companies Unilever, DSM, AkzoNobel, officials and companies. WITH BUSINESS the Wagenigen University, and GAIN. AIM Access to Nutrition Index: Launched in GAIN has provided a combination of now has more than 30 partners exploring 2009 with support from the BMGF and co-funding, technical assistance and innovative and sustainable solutions to the Wellcome Trust, the Index ranks the convening support to more than 50 address malnutrition, using market-based nutrition-related policies, practices and multinational and domestic companies, approaches and financially sustainable, social disclosures of about 20 of the world’s alongside donor governments and business models. Projects in Kenya, Tanzania, leading food and beverage manufacturers. foundations to develop, deliver and Ethiopia and South Africa have a goal of scale a variety of new technologies, reaching 100 million people. The Rabobank products and business models focused Foundation is working on a fund to support tackling malnutrition. small and medium nutrition enterprises.
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 35 II COLLABORATIVE PATHWAYS TO SCALE BUSINESS ENGAGEMENT IN SUSTAINABLE DEVELOPMENT
Diagram 4 The We Mean Business Coalition and its approach to scaling private sector leadership and impact
In the lead up to the crucial negotiations effectiveness of the We Mean Business a mechanism for reporting progress, for the Paris Agreement on Climate, a core coalition is fourfold: and delegates coordination to specific group of seven of the leading business and coalitions and/or technical initiatives • It has galvanized the most relevant investor coalitions dedicated to sustainable that have extensive expertise in each and progressive business and investor development and tackling climate change commitment area. leadership groups as well as individual decided to combine their joint efforts. CEOs around a common platform. • Since the Paris Agreement, the coalition They were: Business for Social has continued to be a mobilizing Responsibility; the Carbon Disclosure • The platform has a clear two-pronged platform for the private sector around project; CERES; the B Team; the Climate approach – in addition to delivering key challenges and issues as they Group; The Prince of Wales Corporate a clear set of seven policy priorities emerge. Leaders Group; and the World Business to governments, it also includes a Council for Sustainable development. set of specific corporate and investor At the end of 2016, We Mean Business had commitments. In short, it is based on mobilized some 1100 public commitments They created We Mean Business as a mutual responsibility and accountability from 494 companies with over US$8.1 coalition of coalitions, as well as a common by both the public and private sector. trillion in revenues and from 183 investors platform for individual companies and with over US$20.7 trillion in combined investors to make public commitments • It offers clear guidance on how assets under management. around their own efforts to move toward companies and investors can take low-carbon economy. The strength and action on these commitments, provides
CORE PARTNERS
We Mean Business Coaliton
NETWORK PARTNERS OVER 490 COMPANIES AND 180 INVESTORS
Asset Owners teri Companies are encouraged to commit Investors can take action by Disclosure Project EPC to one or more of these initiatives: making one or kore of these CKC UNEP Finance Initiative 1. Adopt a science-based emissions commitments CEBDS Japan-CLP reduction target 1. Sign the Montreal Pledge PRI NBI 2. Put a price on carbon for carbon transparency in WWF 3. Commit to 100% renewable power investment portfolios 4. Responsible corporate engagement in 2. Join the Portfolio WORKING WITH climate policy Decarbonization Coalition 5. Report climate change information in 3. Invest in low carbon assets Carbon Tracker Initiative IIGCC mainstream reports as a fiduciary duty 4. Report climate change Carbon War Room Rocky Mountain Institure information in mainstream Climate and Clean Air Coaliton The Business Council for 6. Remove commodity-driven deforestation from all supply chains by 2020 reports as a fiduciary duty Climate Markets & Sustainable Energy Investment Association New Climate Economy 7. Reduce short-lived climate pollutant E3G The Shift Project emissions Forum for the Future United Nations Global Compact 8. Commit to improve energy productivity Global Alliance for Energy World Bank Group 9. Improve water security Productivity IETA World Resources Institute 10. Join the Low Carbon Technology Partnerships Initiative
36 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT III An Agenda for Action: Recommendations for coalitions to achieve scale and transform markets
All companies can do more individually to cooperate with their commercial business partners on sustainability and to build project-level, financing and implementation partnerships with NGOs, governments and other companies. At the same time, collective action or coalitions involving larger numbers of actors will be needed to achieve scale and transform markets.
Every company can take immediate action to strengthen institutions, platforms and networks that bring together its influence, leverage and cooperation with commercial groups of companies with government entities and/or NGOs. business partners in its own value chain. Whether these Based on the experience and lessons of building coalitions are joint venture partners, investors, investees, suppliers, to-date, the following five areas of collective action offer high distributors or retailers, commercially driven cooperation potential for achieving scale and transforming markets: along existing value chains can be a valuable multiplier for spreading responsible business standards and collaborating #1 Strengthen precompetitive business alliances to on research and innovation for sustainable development. leverage industry-wide standards and joint action
#2 Participate in joint financing and innovation platforms to Most companies also have existing experience in building deliver specific goals project-level, financing and implementation partnerships with public and private funders, NGOs, governments and #3 Support collective initiatives to harmonize sustainability other companies. They should continue to invest time data and reporting and resources in these – scaling or replicating existing #4 Expand coalitions that are integrating sustainability partnerships or investing in new ones. The focus should be criteria into capital markets on aligning opportunities to contribute to the SDGs with a clear focus on maximizing positive impacts on people and #5 Coordinate policy dialogue and investment in key cities, identifying ways to improve risk management, lower costs, landscapes and countries of operation enter or build new markets, enhance brand equity and reputation, engage employees, improve productivity and Underpinning all of these recommendations is the crucial profitability, and achieve competitive advantage. need to build leadership skills for effective multi-sector The specific projects, partners and SDGs involved will vary partnering. As The Partnering Initiative (TPI) comments, depending on the industry sector and context in question, “Partnerships are likely to succeed or fail based on the skills, but almost every company has the potential knowledge and competencies of the individuals building and to do much more in this area. running them.”42 TPI, alongside other initiatives such as the Partnership Brokers Association, the Collective Leadership The above types of collaboration can make a measurable Institute, Wageningen University’s Center for Development contribution to achieving the SDGs and to business Innovation, the Partnership Resource Centre at Rotterdam success, whether from a value protection or value creation School of Management and Singapore Management perspective. Yet, they will rarely be sufficient to achieve University’s Master of Tri-Sector Collaboration program have the type of scale and systemic impact that is required to developed valuable partnership tools and training programs transform value chains and markets to work better for people for mid-career managers from government, business and and the environment. To achieve this, companies need to civil society.43 A substantial increase in capacity building engage in coalitions involving a larger numbers of actors. is needed to develop the individual and institutional In particular, there is a need for business-to-business alliances partnering skills required for the future. within and across industry sectors and for multi-stakeholder
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 37 III AN AGENDA FOR ACTION
RECOMMENDATION #1
Strengthen precompetitive business alliances to leverage industry-wide standards and joint action
There is substantial untapped potential to raise the bar on sustainability leadership in all trade and industry associations and through sector-focused corporate responsibility coalitions. This can be achieved by establishing industry-wide standards, setting shared goals or roadmaps for investing in the sustainable development goals, agreeing common metrics, reporting and benchmarking members’ performance against these, sharing lessons and good practices, supporting precompetitive research and development consortia, and undertaking joint policy advocacy. CEO-level leadership and champions will be essential for success.
What’s the challenge and What’s been achieved so far Set shared goals or roadmaps for opportunity for scaling impact? and what type of collective 2 the SDGs: Coalitions can identify and promote One of the most effective ways of action has high potential? sector-wide priorities and plans for accelerating and scaling change is addressing the most material sustainable through industry-wide coalitions. All trade and industry associations, development risks and opportunities If competitors can work together as well as business-led coalitions for their industry sector. While members to establish and spread common focused more specifically on corporate can act on these goals individually and standards and goals for sustainable responsibility and sustainability in their value chains, participating in development, while still competing on can dramatically raise their level collective action with other companies in their ability to executive and innovate, of ambition on the sustainable their industry sector can leverage better collectively they can have far more development goals by calling and more sustained outcomes in relation substantial and systemic impact than for increased action and greater to systemic problems. each acting alone. accountability from their members. Specific actions they can take include Emerging models of this approach A vanguard of sector-specific, business- the following: include: the public commitments of led trade and industry associations and the Consumer Goods Forum on key corporate responsibility coalitions has Establish industry-wide sustainability targets; GSMA’s initial already demonstrated high potential standards: 1 identification of priority SDGs and its for achieving such impact. They have Business-led coalitions can develop a set Mobile for Development initiative; similar shown what is possible. In almost all of industry-relevant principles, a code of work on prioritizing the SDGs by the cases, a core group of 20-50 CEOs conduct and/or performance standards Electronic Industry Citizenship Coalition; and their companies have played a for sustainable development and require IFPMA’s Health Partnerships Directory; crucial role as champions, role models their members to commit to these as and ICCA’s Technology roadmap. and influencers, actively encouraging part of their membership obligation. their business partners, peers and competitors to get engaged. Different models of this being done in practice include: The International Council on Mining and Metals’ (ICMM) Principles for Sustainable Development; The International Federation of Pharmaceutical Manufacturers and Association’s (IFPMA) Code of Conduct; and The International Council of Chemical Associations’s (ICCA) Responsible Care program.
38 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT III AN AGENDA FOR ACTION
RECOMMENDATION #1
Agree on common metrics Undertake joint policy advocacy In December 2016, 193 members of the 3and report on and benchmark 5for sustainable development: UN General Assembly granted Observer members’ performance against these: Status to the International Chamber of A key function of most trade and industry Commerce, which is the world’s largest Business-led coalitions can agree on a set associations is to lobby governments business association representing more of common metrics or key performance on behalf of their members’ common than 6 million members in over 100 indicators for sustainable development. business interests. At a minimum, such countries. This is the first time in the 71- They can then require or encourage activities should not directly undermine year history of the United Nations that their members to report regularly and policies for sustainable development. a business-led and funded organization publicly on their progress against these, There is also untapped upside potential has been given an official role and direct preferably with independent assurance. for business-led coalitions to play a voice in the UN General Assembly. Such activities are not only valuable more proactive and ambitious role in to increase transparency, mutual advocating for policies and regulations accountability and credibility with that drive economic growth that is more stakeholders, but can also form the basis inclusive and sustainable, while also for competitive benchmarking, sharing being of benefit to their members. lessons learned and spreading good At the global level, the private sector practices to improve performance. is playing a more proactive advocacy ICMM and ICCA are two examples where role in international dialogues. Since this is starting to happen in practice the Business Council for Sustainable around specific environmental and social Development (now WBCSD) and the metrics. International Chamber of Commerce worked collaboratively to bring a Support precompetitive research business perspective and voice to the 4and development consortia: Rio Earth Summit in 1992, companies Joint R&D efforts can be focused on and business associations have become addressing specific sustainability increasingly effective at coordinating their opportunities or market failures with participation in major inter-governmental high potential impact on an industry- conferences. wide basis. One notable example was the creation IFPMA and GSMA offer models of of the We Mean Business coalition business-led coalitions that are already in the lead up to the Paris Climate undertaking such collective research and Agreement. This is profiled in more learning activities on a collective basis. detail on page 36. It brought together dozens of cross-industry and sector- specific business alliances as well as several hundred leading companies to call for specific public policies and make specific commitments in support of the climate negotiations. Likewise, the Business 2030 coalition played a role in coordinating business input into the development of the SDGs, with support from the UN Foundation and key donor governments.
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 39 III AN AGENDA FOR ACTION
RECOMMENDATION #2
Participate in joint financing and innovation platforms to deliver specific goals
Companies should focus their engagement on issue, sector or commodity specific financing mechanisms and innovation platforms that most closely align their core business priorities and capabilities with specific SDGs. In particular, there are opportunities to create blended finance partnerships among companies, investors, development finance institutions, donor agencies, research institutes and philanthropic foundations with the goal of developing and scaling new technologies, products, business models and sustainable infrastructure.
What’s the challenge and viable for certain essential goods such What’s been achieved so far and opportunity for scaling impact? as medicines, fortified foods and clean what type of collective action energy and/or a real or perceived There is an urgent imperative to mobilize, inability to pay for these goods; and has high potential? catalyze and channel more, and different lack of skills and access to finance and Over the past decade there has been types and sources of funding and markets for low-income producers. encouraging growth in multi-stakeholder expertise for sustainable development. partnerships and innovation hubs aimed Project-level partnerships can play a While domestic and international public at mobilizing public and private finance role in addressing these challenges, finance will remain essential, we need to alongside expertise to achieve specific but targeted multi-stakeholder financing dramatically increase the level of private environmental and social goals. mechanisms and innovation platforms finance and investment in the SDGs in can be particularly effective in all countries and in key sectors. In particular, development finance achieving scale and systemic impact. This includes: institutions, bilateral donor agencies They can help to share risks and costs and philanthropic foundations have • Portfolio investment and direct over a larger number of public and demonstrated that they can play a vital investment, both domestic and foreign; private actors, support capability catalytic role in mobilizing and scaling and building and catalyze new products, private finance and expertise to support • Private sector capabilities and scaling services and technologies in the sectors the SDGs. They can do so through a platforms, ranging from science, or value chains that have high potential combination of providing advisory technology and research skills to to deliver the SDGs while also delivering services to governments to improve the innovation, implementation and measurable business benefits. policies for private sector investment operational capacities of business. as well as offering risk mitigation instruments, co-investment vehicles and Sufficient levels of finance and expertise other innovative financing mechanisms. exist in the private sector on a global basis, These in turn can help to catalyze but they are not currently being directed additional research, innovation, financing to the projects, sectors and countries and implementation by companies and where the need and opportunity for institutional investors. sustainable development is greatest. This is due to factors such as: the reality Often described as ‘blended finance’ and perception of high risks; lack of models, these public-private partnerships business knowledge about the markets can be especially important in scaling or opportunities involved; small markets up investment and impact in sectors that are not commercially such as energy, water and transportation infrastructure, food security and agriculture, financial inclusion, digital access and infrastructure, health and education.
40 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT III AN AGENDA FOR ACTION
RECOMMENDATION #2
After several decades of experimentation, Support product development private finance and expertise in this area. there is now extensive knowledge on 2partnerships There are a growing number of examples what is required to implement effective of both public-private partnerships and Over the past two decades a number of blended finance partnerships in different business-to-business alliances in this research-based product development sectors. Going forward there is an urgent area. Much more can be achieved by partnerships have emerged, especially in need to scale up action. In particular, focusing collective action on specific the areas of global health and nutrition. there are opportunities to develop sectors, commodities and regions. Notable examples include the GAVI blended finance partnerships and joint Alliance focused on Vaccines; the Drugs for innovation hubs to: Finance and deliver sustainable Neglected Diseases initiative (DNDi); and infrastructure projects the Global Alliance for Improved Nutrition 4 Pilot and scale high-potential and its Business Platform for Nutritious Building on lessons learned from previous technologies in areas such as 1 Research. There is also a growing number decades, there is an encouraging clean technology, biotechnology, of global and national multi-stakeholder resurgence in innovative financing and information technology and fintech research and development (R&D) risk-mitigation mechanisms to drive Partnerships can include government- platforms focused on the development investment in sustainable infrastructure. hosted platforms and innovation labs of medicines and delivery mechanisms This includes: that work with companies, research to tackle specific diseases and strengthen • project preparation facilities, such as the institutes and private investors and donors. health systems. These include Medicines Global Infrastructure Facility; Existing examples include: The Global for Malaria Venture (MMV), the TB • co-investment and pooling Development Lab hosted by USAID to Accelerator and National Food Fortification mechanisms, such as IFC’s managed discover, test, and scale breakthrough programs, among many others. Additional co-lending portfolio program and the solutions to end extreme poverty; Grand examples are provided in Appendix 4. Sustainable Development Investment Challenges Canada, focused on catalyzing Partnership, supported by WEF and There is ongoing potential to scale some innovation in global health; and a variety the OECD to mobilize $100 billion in of the existing product development of Social Innovation Funds at both a global private financing for infrastructure partnerships in the field of health and national level. projects in developing countries using and nutrition, while also exploring development assistance to reduce risk.; There are also a growing number of opportunities for such partnerships • debt-based and right-timing private-led consortia – ranging from high in other sectors such as education, instruments, such as carbon and net worth individuals to institutional agriculture and energy. infrastructure bonds and long-term loan investors and companies – that are and equity finance; and collaborating around a specific set of Invest in and scale inclusive • financial risk management instruments, sustainability challenges and solutions in 3business models that explicitly such as guarantees and insurance, a dynamic and flexible manner. Examples include low-income producers, better market data and benchmarks. include the Catalytic Finance Initiative, workers and consumers the Breakthrough Energy Coalition, As outlined on page 21 and 22, there Given the importance of sustainable and the Circular Economy 100 (CE100) is enormous untapped potential to infrastructure to tackling the three precompetitive innovation platform. implement inclusive business models central challenges of reigniting economic growth, delivering on the SDGs, and Prizes, competitions and challenge funds in many sectors and value chains. reducing climate risk, this is another area offer a related set of instruments that can Organizations and initiatives such as that calls for intensified collective action help to scale private sector financing and the IFC, the World Business Council for by governments alongside private sector innovation targeted at delivering specific Sustainable Development, Business Call investors and companies. SDGs. Examples include the XPrize, the to Action, WWF’s Market Transformation Finance for Resilience (FiRe) Awards and Initiative, and WEF’s New Vision for DFID’s Innovation Prizes for Environment Agriculture have been active in raising and Development. business awareness and catalyzing
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 41 III AN AGENDA FOR ACTION
RECOMMENDATION #3
Support collective initiatives to harmonize sustainability data and reporting
Collaboration is needed among providers and users of corporate sustainability data and reporting to drive greater convergence and harmonization. This is necessary to make information more comparable, consistent and useful to investors, regulators and other stakeholders as well as to companies themselves in order to improve decision-making, performance and accountability.
What’s the challenge and methodology and are time consuming What’s been achieved so far opportunity for scaling impact? and costly to complete. Investors are and what type of collective frustrated by the lack of comparability Improving the quality and rigor as well and reliable data on the sustainability action has high potential? as the comparability and consistency of performance of companies, either The evolution of sustainability reporting business and sustainability data, metrics within or across sectors. and data collection platforms over the and reporting is essential. It is necessary past two decades reflects a growing The challenge now is to ensure for improving corporate decision-making trend towards greater sector and issue greater harmonization and preferably as well as investor and other stakeholder specificity: standardization of sustainability evaluations of business. In turn, these reporting requirements, indicators are key to increasing transparency, • Broad and largely aspirational cross- and frameworks for companies. accountability and trust. industry reporting frameworks led No one group can do this alone. the way in the late 1990s, including Over the past two decades there has The ecosystem for sustainability updates of the OECD Guidelines been a plethora of new initiatives to reporting alone consists of a multitude of on Multinational Enterprises, the develop corporate reporting standards requirement developers, implementers, creation of the UN Global Compact, and frameworks for sustainability, to support mechanisms, reporting channels the first generation of the Global benchmark corporate sustainability and audiences.45 In order to be effective, Reporting Initiative (GRI), and other performance, and to develop tools and the largest and most influential players in accountability frameworks such as auditing protocols for sustainable supply the system are going to need to take the AA1000. chain management. It is estimated, for lead on collaboration. example, that, “At present, more than • More prescriptive reporting criteria 100 sustainability raters administer and rigorous analysis of corporate questionnaires to thousands of companies data followed, including frameworks worldwide, comprising a mix of investor such as the IFC Performance Standards and consumer-facing instruments ranging for project finance, which were from issue-specific (e.g., climate change) launched in 2006, and the next to multi-issue (integrated environmental, generation of GRI requirements. social, and corporate governance factors) Emerging sustainability benchmarks ratings, rankings, and indices.”44 and indices were also important Individual companies can receive more in driving greater rigor and than twenty detailed questionnaires a sophistication in data collection and year from different research and rating analysis. Leading examples included organizations, which are all slightly the Dow Jones Sustainability Index different in terms of their focus and family (DJSI), which was first launched
42 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT III AN AGENDA FOR ACTION
RECOMMENDATION #3
in 1999 and is now the S&P Dow Yet, the challenge remains that there Strengthen the Corporate Jones; the FTSE4Good, launched in is no globally agreed or consistent 2Reporting Dialogue 2001 and now the FTSE Russell Index approach to sustainability reporting. The Corporate Reporting Dialogue series; the MSCI ESG Index family; the Two examples of recent collective was established in 2015 to address STOXX ESG and Sustainability indices; action offer potential for taking the challenge of convergence or and Solactive (which in 2016, was the collaboration to the next level, where standardization of sustainability reporting. first of the global indices to launch greater consistency may be possible. It is currently an informal coalition of a ‘Sustainable Development Goals Key actors in the fields of corporate eight of the principal organizations that World Index’). reporting and corporate governance are charted with establishing reporting can take action related to both of these There have also been some NGO and standards and guidelines, including collaborative initiatives: foundation-led initiatives in this area financial reporting standards. Several such as Access to Medicines Index, Support implementation of of the organizations are themselves the Access to Nutrition Index and 1the FSB’s Task Force on Climate- multi-stakeholder coalitions. They Oxfam’s Behind the Brands ranking related Financial Disclosures (TCFD) are: IFRS, the International Financial initiative focused on the supply Reporting Standards committee of the The Financial Stability Board was chains of leading food and beverage International Accounting Standards established by the G20 in 2009, in brands. Board (IASB); ISO (the International response to the financial crisis. In 2015, Organization for Standardization); GRI, • The past decade has seen the it created the TCFD to develop a set of (the Global Reporting Initiative); SASB emergence of greater specificity consistent and voluntary disclosures (the Sustainability Accounting Standards through targeted sector, issue and on climate-related risks for use by Board); the Integrated Reporting initiative; even commodity reporting criteria companies in providing information to CDP, the Climate Disclosure Project; and and benchmarks. These have investors, insurers, lenders and other CDSB, the Climate Disclosure Standards included: the Greenhouse Gas (GHG) key stakeholders. The initiative has been Board. Protocol; the Carbon Disclosure supported by a group of leading financial Project (CDP); the Science-Based institutions, responsible for assets worth Between them, these platforms already Targets initiative; the UN Guiding a combined $20 trillion, and companies influence the reporting quality of many Principles Reporting Framework; the from diverse industry sectors, with a of the world’s largest companies. They Corporate Human Rights Benchmark: combined market capitalization of are an obvious coalition to take the the Natural Capital Coalition; GRI’s some $1.5 trillion. It has undertaken a standardization of sustainability reporting industry sector guidance, to name process of extensive research and multi- further. A few additional partners should a few of the major initiatives. stakeholder consultation to develop a set be invited to the table, such as the The creation of the Sustainability of recommendations on climate-related Financial Accounting Foundation(the Accounting Standards Board (SASB) disclosure. The goal now is to integrate home of the Financial Accounting in 2011, with its focus on identifying these in major stock exchange listing Standards Board, FASB, and the GAAP material sustainability risks within requirements, credit rating agencies, framework); the Global Initiative for key industry sectors, has been an principles of corporate governance, and Sustainability Ratings (GISR); and the important development in the field. relevant government policies. UNGP Reporting Framework, based on the UN Guiding Principles on Business Almost all of the above initiatives While specifically focused on climate- and Human Rights. Together, this group are the result of extensive multi- related risk disclsoure, this type of could agree on standardized, or at stakeholder consultation and often multi-stakeholder consultative approach, least more harmonized, sustainability collaboration among companies, which has also been used by SASB; GRI accounting and reporting standards investors, research entities and in most and the UNGP Reporting Framework, and guidelines, including sector-specific cases NGOs and governments or inter- offers a useful model for the way forward. criteria. governmental organizations.
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 43 III AN AGENDA FOR ACTION
RECOMMENDATION #4
Expand coalitions that are integrating sustainability criteria into capital markets
Coalitions can accelerate and scale the integration of sustainability criteria, longer-term horizons and greater financial inclusion into the decision-making and impact of capital market institutions. Concerted efforts are needed to expand the membership and influence of existing coalitions focused on scaling responsible, inclusive and sustainable finance, such as the Sustainable Stock Exchanges Initiative, Principles for Responsible Investment and Global Impact Investing Network, among others. In particular, there is a need to increase the participation and leadership of major asset owners such as pension funds, sovereign wealth funds, endowments and insurance companies.
What’s the challenge and health, education etc.) and in high-risk • Improve financial transparency opportunity for scaling impact? locations (such as fragile states and and accountability: Concerted and locations most threatened by climate coordinated efforts are needed to Apart from government policies and change). tackle corruption, money laundering, regulations, there is no more important and tax evasion and avoidance, all of • Spread the integration of set of institutions and platforms for which seriously undermine efforts to environmental, social and accelerating and scaling private sector achieve sustainable development. governance (ESG) criteria: engagement in the SDGs than the The financial sector has a crucial There is growing empirical evidence capital markets and financial institutions role to play in this area by spreading of the correlation between good that drive them (central banks, zero-tolerance for such activities in ESG performance and good financial commercial and investment banks, all financial services from consumer performance. As such, there is a need insurance companies, institutional and commercial banking to asset for ESG risks and opportunities, to investors – both asset owners and asset management. be better integrated into the design managers – rating agencies and stock and delivery of financial products and • Make financial products and exchanges). services, and into investment analysis services more inclusive: Many small Five key areas of transformation that are and decision-making. And lined to businesses still find it difficult to needed in financial institutions and the this, as outlined in Recommendation access financial services and millions capital markets for them to support #3, there is a growing need to agree of people remain unbanked. more responsible, inclusive and on and spread common standards New business models, technologies sustainable growth are summarized for reporting on ESG performance and partnerships are needed to below. In all cases, collective action will by both corporations and financial improve access and affordability be essential for achieving substantial institutions. for lower-income households and change: communities, and for small, medium • Promote longer-term horizons: and micro-enterprises (SMMEs) in • Dramatically scale the amount of There is growing momentum among the design and delivery of financial funding for the SDGs and climate both investors and corporations of products and services. commitments: There is a need to the need to reward patient capital leverage an additional $5-7 trillion and long-term performance as well in new investment per annum from as short-term results. This is going a combination of public, commercial to require changes in government and philanthropic sources of capital, policies and regulations as well as especially in key sectors (such as market incentives, institutions and sustainable infrastructure, agriculture, governance frameworks.
44 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT III AN AGENDA FOR ACTION
RECOMMENDATION #4
What’s been achieved so far exchange listings, while enabling the SSEI The UNEP Finance Initiative and and what type of collective to continue serving as a convener of best the UNEP Inquiry into the Design practices, awareness raising and advocacy. of a Sustainable Financial System: action has high potential? UNEP has been one of the pioneers in Financial institutions adopting the Progress has been made in all of sustainable finance. It first established the IFC Performance Standards: The IFC these areas over the past decade. UNEP Finance Initiative in 1992, which Performance Standards have played a The establishment and growth of today is a platform of more than 200 transformational role in sustainable finance multi-stakeholder initiatives and diverse financial institutions focused on over the past decade. In 2006, they were industry-led alliances has played a promoting sustainable finance. In 2014, first developed and adopted by the IFC, valuable convening, catalyzing and UNEP launched another multi-stakeholder accounting for some US$7 billion in agenda-setting role. The ecosystem initiative to explore ways to better align the financing. Today, they have been adapted of partnerships that is evolving in the financial system to the resilience and the by 15 International Finance Institutions, 84 financial sector is profiled in more long-term success of the real economy. It’s Equator Principles member banks, 270 of detail in Appendix #5. Two key areas of initial involved collaborative research and IFC’s client banks and funds and 32 export collective action that are needed going consultation to identify good practices, credit agencies, and have influenced an forward are as follows: especially in policies and regulatory aggregate of US$4.5 trillion in financing innovations. Its next phase is focused on Expand the membership and between 2006 and 2016. There is potential delivery by identifying key levers to embed influence of existing coalitions to apply this model to other financial assets 1 sustainability into financial architecture at focused on scaling responsible, and investments. national levels and globally. inclusive and sustainable finance. The Principles for Responsible Promising multi-stakeholder initiatives Investment: Created in 2006, the Emerging Markets Private Equity already exist in a number of areas and Principles for Responsible Investment Association: Established in 2004, EMPEA could have a valuable role to play going (PRI) has been one of the most successful promotes the role of private equity in forward. In most cases, much of the initial industry-led coalitions in promoting emerging markets. It has played a key role ‘heavy lifting’ has been done in establishing responsible investment and supporting in driving more private capital flows to them, improving their governance its signatories to integrate ESG criteria into key markets and sectors, and spreading structures, and enhancing their value their investment and ownership decision- industry-wide standards in areas such as proposition for members. A few of the making. As of August 2016, it had 1553 ESG. Today, it has over 300 members, who most notable examples include: signatories with more than US$60 trillion together manage more than US$1 trillion in assets under management. There is of assets and have offices in more than The Sustainable Stock Exchanges potential to grow both the membership 100 countries. As private equity grows in Initiative (SSEI): Established in 2009, the and the policy influence of the PRI. importance as an asset class, EMPEA’s role partners in this voluntary network include in promoting sustainability and impact 48 exchanges in 52 countries, representing The Financial Stability Board: Created by investing can continue to grow. some 3,800 issuer corporations and $48 the G20 in 2009 in response to the financial trillion in market capitalization. The network crisis, FSB has already demonstrated an The Global Impact Investing Network: aims to share best practices, engage in interesting approach to collective action Established in 2009 with initial support policy dialogue and support joint efforts through its multi-stakeholder Task Force from the Rockefeller Foundation, GIIN is to increase the integration of ESG into on Climate-related Financial Disclosure now a network of more than 200 asset business and investment practices. The (which was profiled in Recommendation owners, asset managers and service International Organization of Securities #2). FSB, or the G20 more broadly, could providers drawn from major institutional Commissions (IOSCO) could play a vital play a valuable role in convening other investors to foundations and family role in taking this voluntary collaborative sustainability-related financial task forces offices. Its goal is to spread awareness and initiative to the next level by making ESG and/or calling for the establishment of new good practice on investments made in disclosure a requirement for all stock facilities and funds to support the SDGs. companies, organizations and funds, which
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 45 III AN AGENDA FOR ACTION
RECOMMENDATION #4 aim to achieve social and environmental • Better Than Cash Alliance (founded asset owners and between them and the impact as well as financial returns. Interest in 2012 as a global coalition of companies they invest in. in impact investing continues to grow governments, private sector, and ESG or sustainability criteria could be among both institutional and retailer development organizations committed added to the Santiago Principles, or a investors, and GIIN has potential to play a to moving from cash to electronic related set of new principles, developed role in continuing to build standards, share payments). by the International Forum of Sovereign lessons and strengthen capabilities in this There is potential for all of these Wealth Funds. Its 30 members represent area investing. collaborative initiatives to continue more than 80 percent of all assets Coalitions to increase financial shaping the policy agenda and mobilizing managed by Sovereign Wealth Funds. inclusion: There has been substantial new financial resources, assets and Coalitions of asset owners could also progress in this area, starting from growth technologies in order to accelerate and make specific pledges to establish new in commercially viable microfinance scale financial inclusion. funds or add their support to existing institutions in the 2000s to the dramatic blended financing mechanisms that enabling potential of mobile banking Increase the leadership focus on investing in specific sectors platforms in the past five years. Notable and participation of major 2 and/or companies that are explicitly and coalitions that have been part of this asset owners measurably advancing specific SDGs. progress include the following: The leadership and active engagement • Consultative Group to Assist the of asset owners (sovereign wealth funds, Poorest (established in 2000 as a global pension funds, insurance companies, partnership of 34 public and private endowments) will be particularly organizations that seek to advance important in driving transformational financial inclusion); change towards more sustainable development. Their actions will be key • Global Banking Alliance for Women not only in further integrating ESG criteria (established in 2000 as a consortium of into investment management, and hence public and private financial institutions corporate decision-making, but also in interested in promoting women’s access unlocking the trillions of additional dollars to finance, today operating in 135 in private capital needed each year to countries); achieve the SDGs. • Global Partnership for Financial Several high-potential coalitions of Inclusion (created in 2010 as an asset owners are emerging. They inclusive platform for all G20 countries, include coalition building by nonprofit interested non-G20 countries, private organizations such as CERES and the and nonprofit stakeholders to carry Cambridge Institute for Sustainability forward work on financial inclusion); Leadership, as well as actions being • Alliance for Financial Inclusion taken by asset owners themselves. In July (established in 2011, as a knowledge 2016, for example, Japan’s Government network of central banks and Pension Investment Fund (GPIF), which other financial regulatory bodies in is the world’s largest, announced the developing countries); and establishment of the Global Asset Owners’ Forum and the Business and Asset Owners’ Forum, aimed at dialogue and shared learning on ESG among major
46 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT III AN AGENDA FOR ACTION
RECOMMENDATION #5
Coordinate policy dialogue and investment in key cities, landscapes and countries of operation
Spatial and location-specific coalitions that bring together companies, investors, governments, civil society and citizens to agree on shared priorities and develop common plans for action offer high potential to achieve scale and systemic impact. In particular, there is a need to increase business participation and collective action in: • City-based alliances dedicated to increasing urban sustainability and resilience; • Integrated landscape management initiatives, especially in vulnerable watersheds, biodiversity and ocean ecosystems; • Country-level multi-stakeholder platforms, chaired by government ministers that systematically engage leading companies, business associations and NGOs in setting national priorities for the SDGs.
What’s the challenge and policy reform and supporting efforts to • Convening a more effective and opportunity for scaling impact? strengthen the enabling environment influential business voice than any for both business and the SDGs. one company can achieve alone; Effective government leadership will This requires transparent and • Sharing the political risks sometimes be essential to achieving the SDGs. accountable business engagement associated with individual companies It will be national, and increasingly in policy dialogue, advocacy, data or business leaders speaking out state and city-level governments that collection and analysis, In particular, on their own about complex and will determine if appropriate policies, there is a growing need for companies, challenging public policy issues and regulations and incentives are in especially those that are industry constraints; place to drive market transformation or national leaders, to provide • Addressing policy-related issues toward sustainable development public support for rule-of-law, more in a more comprehensive and and if they are being implemented predictable, inclusive and transparent coordinated manner; and and monitored through effective trade, taxation, and financial systems, institutions. And it will largely be • Ensuring greater public and and efforts to tackle corruption and these policies, regulations, incentives private sector transparency and strengthen public governance. At a and institutions that will create the accountability for results. minimum, there is growing pressure enabling environment and market on companies to demonstrate signals needed to accelerate and scale greater transparency and coherence business and investor engagement in with respect to their own lobbying the SDGs. activities relative to their sustainable Yet, the reality is that progress towards development commitments. sustainable development in too many Once again, coalition and partnerships countries, regions and municipalities is can play a useful role. Industry-wide undermined by either a lack of political collective action, either through will or weak public administrative representative business organizations capacity or bad governance in terms of or business-led corporate responsibility corruption and failure to meet the basic coalitions, as well as multi-stakeholder needs of citizens. In all cases, business platforms can be especially important in: leaders and business associations have a role to play in advocating for
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 47 III AN AGENDA FOR ACTION
RECOMMENDATION #5
What’s been achieved so far Increase business investment in Participate in integrated and what type of collective 1city-based alliances dedicated to 2landscape management urban sustainability and resilience initiatives, especially in the most action has high potential? vulnerable watersheds, biodiversity Given demographic and urbanization There has been encouraging growth in and ocean ecosystems trends, the future of the world’s cities, the number, scale and impact of both especially those that are growing most Growing population pressure and rapid business-led policy advocacy alliances rapidly in many developing countries, is urban growth, alongside increased and multi-stakeholder platforms over going to determine whether or not we agriculture, fishing, forestry, mining, oil the past few decades with a dedicated achieve the sustainable development and gas, and infrastructure activities in focus on either advocating for or goals and global climate commitments. water stressed regions or areas of high coordinating with governments to There are a number of longstanding biodiversity value continues to put major advance the sustainable development city-led and focused sustainability pressure on these fragile ecosystems. agenda. Some examples of policy initiatives, including Local Agenda 21 Such ecosystems are essential to advocacy by business coalitions at the and the International Council for Local sustaining local livelihoods and cultures, global level are provided on page 39. Environmental Initiatives, which date back achieving national resilience and ensuring In addition, there is potential for much to the 1990s, and various UN-supported global sustainability. A growing number greater business participation and platforms through UN-HABITAT. Most are under serious threat. Collective action collective action in the following of these are government-led and have is urgently needed to overcome some of three areas: limited private sector engagement. the systemic governance gaps and market failures that are undermining their ability At the same time, a number of new to survive. initiatives have emerged in the past decade with a strong focus on engaging In the past, relationships between leading the business sector and private finance. environmental and indigenous peoples Interesting examples include the 100 NGOs and large companies relating to Resilient Cities Initiative, the Global this issue were largely antagonistic. Platform for Sustainable Cities, the Cities In recent years, however, substantial Climate Finance Leadership Alliance, the progress has been made in starting to C40 Cities Climate Leadership Group, build more constructive location-based the Smart Cities Council and the 100,000 coalitions between business, NGOs, Opportunities Initiative. governments and community-based organizations. NGOs such as Conservation Almost all major companies have International, the Nature Conservancy, headquarters or regional operations WWF and the World Resources Institute, in cities around the world. There is as well as IUCN have led the way. massive untapped potential to expand or replicate some of the collective action Business leadership coalitions such as models that are starting to emerge to WBCSD, the Consumer Goods Forum, the support more strategic and coordinated Oceans Council, the Sustainable Shipping approaches to urban planning and design, Initiative and the Cross-Sector Biodiversity physical, digital and social infrastructure initiative (ICMM, IPIECA and the Equator development, education, training and Principles banks), plus individual job creation, and urban sustainability and companies have also increased their resilience. level of urgency and engagement.
48 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT III AN AGENDA FOR ACTION
RECOMMENDATION #5
Emerging multi-stakeholder initiatives Support country-level multi- There are also good examples of national include the 2030 Water Resources Group, 3stakeholder platforms that public and private agenda-setting the Tropical Forest Alliance, Conservation systematically engage leading coalitions in specific sectors, most notably International’s Green Compacts, companies, business associations in health and agriculture. Examples and a variety of innovative financing and NGOs in setting national include the country platforms for global mechanisms. priorities for the SDGs partnerships such as The Global Fund to Fight AIDS, Tuberculosis and Malaria, GAVI Landscape-based collective action Over the past few decades a number Alliance, Scaling Up Nutrition, and the New has become an area of growing focus of business-led policy initiatives have Vision for Agriculture. for companies in the agricultural, emerged at the national-level, which are manufacturing and extractives sector. focused on promoting more sustainable These business-led coalitions offer useful In particular, they are recognizing the need or inclusive growth. They are being driven models for all companies, governments to support more collaborative approaches by a combination of progressive chambers and donors to review and potentially to watershed management and integrated of commerce and corporate responsibility adapt to support implementation of the landscape planning in areas of high coalitions or multi-stakeholder platforms. SDGs at the country level. biodiversity value. And they have brought a more In summary, every Head of State should coordinated and transparent business This is a nascent field, but sufficient meet with the most influential business voice to the table to engage in dialogue examples of good practice now exist for associations and individual companies or with government. In most cases they focus a more ambitious and strategic coalition business leaders in her or his country to on advocating for and helping to design building. A dialogue in 2016 supported explore opportunities to establish more and coordinate national agendas around by the New Vision for Agriculture structured, strategic and collaborative key sustainable development goals. proposed the launch of a 100 Sustainable approaches to support the SDGs. Landscapes initiative analogous to the 100 Notable cross-industry examples have These can focus on setting national Resilient Cities Initiative. This is a proposal emerged in both developed and priorities, developing strategic plans that warrants serious consideration. developing countries. Some are focused and mobilizing resources. The can do so on setting national policy agendas across all industries and SDGs or focused and taking joint action within their on specific sectors that offer the greatest own country, such as: Business in the potential for impact in that country. Community in the UK; the National Business Initiative in South Africa; the Confederation of Indian Industry’s development initiatives; and Philippine Business for Social Progress. Others are focused on working with their governments to promote support for international development, such as the U.S. Global Leadership Coalition; the Dutch Sustainable Growth Coalition; and Swedish Business for Sustainable Development.
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 49 IV Conclusion
Partnerships are a valuable tool to drive change toward more responsible, inclusive and sustainable growth. They can help to address some of the market failures, governance gaps and trust deficits that undermine the acceleration and scaling of business engagement in sustainable development. They can also serve as a platform for convening and coordinating the diverse actions of numerous actors and for building mutually reinforcing linkages between different sectors and sustainable development goals.
There is an ongoing need to better understand what works officials that are recipients of a global partnership or low- and what does not in building effective partnerships at income communities and citizens. A related issue is the different levels. Numerous studies have been undertaken to challenge of dealing with power dynamics and making evaluate and learn from individual partnerships, but there sure that appropriate grievance mechanisms and conflict is currently no common database to review and compare resolution approaches are in place if needed. these diverse studies and no commonly agreed framework of analysis. Likewise, very little comparative analysis has • Operational efficiency and effectiveness: A number of been undertaken of larger datasets of partnerships, whether studies have concluded that the high transaction costs and within particular industry sectors or to address particular specific types of skill sets needed to build effective public- development goals and sustainability issues.46 private partnerships, especially complex multi-stakeholder initiative make them more costly and time consuming and As a result, it is difficult to draw empirical conclusions ultimately less efficient and effective than governments or on the overall contribution, reach and impact of existing companies simply working on their own. Studies also point partnerships for sustainable development. This is the case to the fact that many initiatives fail to deliver on the goals even within one sector let alone more broadly for all the they set at the beginning of the partnership. SDGs. Rigorous evaluation is challenged by lack of common definitions, enormous diversity of partnership models, and These and other assessments of the operational, governance, the fact that, other than longstanding infrastructure projects and accountability challenges of multi-stakeholder and some of the global health partnerships, most cross-sector partnerships point to the ongoing need to improve initiatives did not exist 15 years ago. This is especially the case evaluation and transparency in assessing their development for system-level business alliances and multi-stakeholder outcomes relative to their transaction costs, business benefits initiatives at the global, national or industry sector level, and and political influence. These critiques should not, however, for market-oriented partnerships, blended finance and hybrid detract from the untapped potential of building partnerships business models at the project or value chain level. between business and other sectors in order to achieve more inclusive, responsible and sustainable growth. Some of the studies that have been undertaken in the past decade are listed in the References. Many of these studies Synthesis of what works on building partnerships for offer encouraging feedback on the potential of partnerships. sustainable development At the same time, they highlight some common critiques and The eight success factors in Table 3 are a synthesis of over challenges. These include: forty academic and practitioner studies on partnerships, ranging from global multi-stakeholder institutions and • Leadership, governance and accountability: precompetitive sector-based business alliances to more Many critics point to concerns about governance and traditional public private infrastructure partnerships, funding of MSIs, which is not sufficiently transparent where collaboration is transactional in nature and more or accountable in terms of measuring, evaluating and narrowly defined. reporting on performance and progress. Linked to this are concerns about representation of beneficiaries in governance structures, whether these are government
50 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT CONCLUSION
Table 3 Success factors in building partnerships
SHARED PURPOSE and A compelling agenda for change led by strong champions who are leaders in their own UNDERSTANDING OF 1 organizations and are able to take decisions, allocate resources, motivate and mobilize THE ECOSYSTEM and others, and support a long-term commitment. its STAKEHOLDERS Jointly agreed public commitments and a strategic plan for achieving them, based 2 on rigorous consultation and relevant baseline evidence, with clearly defined roles and responsibilities for each participant.
Understanding of the full value chain or ecosystem required for transformation and 3 ability to either holistically coordinate activities or stakeholders across this system or target specific interventions that mutually reinforce those of others.
RIGOROUS PROCESS Effective implementation capability, enabled by dedicated and well-resourced and OPERATIONAL 4 ‘backbone support’, committed practitioners from participant organizations who ALIGNMENT have the necessary authority and skills to engage, and effective communication and conflict resolution processes that enable regular and rigorous dialogue and feedback. 5 Strong alignment with and leverage of partners’ core competencies and interests. GOOD GOVERNANCE Mutually agreed metrics and governance mechanisms to track performance and ensure and MUTUAL 6 rigorous oversight and accountability, both within the partnership itself and externally ACCOUNTABILITY with relevant stakeholders, including beneficiaries and vulnerable groups where relevant. for PROGRESS Participatory monitoring and independent evaluation approaches that facilitate 7 shared learning and better decision-making in addition to ensuring transparency and accountability.
Flexibility to “course correct” and be adaptive based on evolving circumstances, 8 disruptive events, failures, stakeholder feedback and lessons learned.
In conclusion, partnerships are a tool. They are a means to responsible standards and practices, identifying and an end, not an end in themselves. In the majority of cases, mitigating shared risks, finding opportunities to create shared that ‘end’ is to achieve greater scale, greater legitimacy, value, and contributing to a sound enabling environment. greater systemic or transformational impact and/or greater sustainability than the participants would be able to achieve Above all, partnerships require outstanding individual on their own. They are driven by a shared recognition leadership. Effective partnership building, especially across that many development problems are too complex and sectors, requires new mindsets and skill sets on the part of interdependent, and the financial, technical and managerial individuals and new capabilities and incentives on the part of resources for tackling them are too scarce or too widely institutions. It requires patience, persistence and a long-term dispersed among different actors, not to search for new commitment in an era of short attention spans, accelerating approaches that draw on the resources, skills and capacities of and disruptive change and short-term performance all sectors. pressures on companies and governments alike.
Partnerships are by no means a panacea and are often costly None of this is easy. Yet, it is essential work if we are to make and time consuming to build and sustain. Yet, they offer one progress at the scale and systemic impact that are required. of the best tools available for business to work with other The ability to galvanize and convene other stakeholders to sectors in delivering the sustainable development goals in co-create effective partnerships for sustainable development a way that makes good business sense. The business case has become one of the essential leadership imperatives for for partnerships is increasingly clear in terms of spreading the 21st Century.
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 51 Appendices
1 Example of the diversity of local partners needed to implement partnership: The case of Project Nurture p53
2 A sample of major sector-based business alliances and multi-stakeholder platforms p54
3 The evolving partnership ecosystem for food and agriculture p55
4 The evolving partnership ecosystem for health and wellbeing p56
5 The evolving partnership ecosystem for financial services for sustainable development p58
6 The evolving partnership ecosystem for metals and mining p60
52 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT Appendix 1 Example of the diversity of local partners needed to implement partnership: The case of Project Nurture
PARTNERS MANGO and PASSION FRUIT VALUE CHAINS End Consumers MANGOES PASSION FRUIT PASSION PROCESSING CHANNEL PROCESSING Hotels Retailers and Kiosks Small Shops Supermarkets
DOMESTIC & REGIONAL & DOMESTIC CHANNEL MARKET FRESH
Micro Micro Centers
DOMESTIC & REGIONAL & DOMESTIC CHANNEL MARKET FRESH CHANNEL EXPORT Traditional Traditional Distributors Distributors Distribution Grove 2 Glass Grove End Consumers The Coca-Cola Company Coca-Cola The (Kenya) End End Consumers Consumers Retailers Nairobi Bottlers Nairobi
and 5 Others (Uganda) (DRC, Distributors Chains Retailer Supermarket Supermarket
High-end Outlets (Kenya) Other Bottlers Coca-Cola Juices Coca-Cola South Zimbabwe) Africa, Century Bottlers
Beverage Beverage
Manufacturers (Kenya) Regional Regional Sunny Allfruit (Kenya) (Kenya) Britania East African East African (Uganda) Wholesalers Domestic and Other Exporters Growers Growers Processors Agent Agents Traders Traders Traders Traders Marketing
TechnoServe (Uganda) Associates Agribusiness Agribusiness Management
Bill & Melinda Gates Foundation Bill & Melinda Gates
Over (Kenya) GROUP 50,000 farmers involved International Farm Concern Farm PRODUCER BUSINESS BUSINESS PRODUCER
Uganda) (Kenya & (Kenya / Real IPM (Uganda) Private Private (Kenya) (Kenya) (Kenya) / (Kenya) (Uganda) Nurseries Equity Bank National Crops National Centenary Bank Centenary Institute Institute Research Institute Research Kenya Agricultural Agricultural Kenya Resources Research Resources
Source: Jenkins, Beth and Lorin Fries (2013). “Project Nurture: Partnering for Business Opportunity and Development Impact.” Cambridge, MA: The CSR Initiative at the Harvard Kennedy School.
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 53 Appendix 2
A sample of major sector-based business alliances and multi-stakeholder platforms
SECTOR EXAMPLES Food and Agriculture Consumer Goods Forum (CGF) Scaling Up Nutrition (SUN) (See Appendix 3 for Sustainable Agriculture Initiative Alliance for a Green Revolution in Africa more examples) Platform (SAI) (AGRA) Global Agribusiness Alliance Ethical Trading Initiative (ETI) AIM Progress New Alliance for Food Security and Nutrition New Vision for Agriculture (NVA) 20-30 commodity-specific alliances Global Alliance for Improved Nutrition (GAIN)
Health and Wellbeing Global Alliance (GAVI) Over 40 disease-specific product (See Appendix 4 for Global Health Workforce Network development partnerships and/or product more examples) GBCHealth donation alliances, with key diseases being Every Woman Every Child HIV/AIDS, malaria, tuberculosis, diabetes, cancer and NTDs, including the Global Fund Uniting to Combat Neglected Tropical Diseases Partnership for Quality Medical Donations
Finance and Capital Markets Sustainable Finance Inclusive Finance (See Appendix 5 for Principles for Responsible Investment (PRI) Consultative Group to Assist the more examples) Sustainable Stock Exchanges Initiative (SSE) Poorest (CGAP) Global Impact Investing Network (GIIN) Alliance for Financial Inclusion Equator Principles (for project finance)/ Women’s World Banking (WWB) Carbon Principles/Green Bond Principles Global Banking Alliance for Women (GBA) Carbon Pricing Leadership Coalition SME Finance Forum Insurance Development Forum Better Than Cash Alliance Emerging Market Private Equity Association GSMA Mobile for Development
Metals and Mining/ International Council on Mining Responsible Mineral Development Initiative Extractives and Metals (ICMM) Voluntary Principles on Security and (See Appendix 6 for Partnering Against Corruption (PACI) Human Rights more examples) Extractive Industries Transparency Business and Biodiversity Offsets Program Initiative (EITI) 10-20 commodity specific alliances Responsible Jewelry Council Electronics Industry Corporate Citizenship Coalition /conflict minerals work (EICC)
Cities and Mobility Global Platform for Sustainable Cities EMBARQ 100 Resilient Cities Partnership for Clean Fuels and Vehicles Cities Climate Finance Leadership Alliance Sustainable Shipping Initiative C40 Cities Climate Leadership Group Partnership on Sustainable Low Carbon Transport Low Carbon Technology Partnerships Initiative Global Road Safety Partnership
54 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT Appendix 3
The evolving partnership ecosystem for food and agriculture
CORE OBJECTIVES FOR PARTNERING Increasing farm-level productivity – Increasing resource efficiency and decreasing emissions – Improving farmer incomes, livelihoods and resilience – Respecting human rights of workers and producers – Investing in climate smart platforms – Decreasing post-harvest loss and waste – Producing and manufacturing nutrient fortified food
INDUSTRY-LEVEL, PRECOMPETITIVE COMMODITY-SPECIFIC SYSTEM-LEVEL, MULTISTAKEHOLDER INITIATIVES COLLECTIVE ACTION ALLIANCES • Alliance for a Green Revolution Africa (AGRA): Engaged with • Consumer Goods Forum: 400 manufacturer and (some industry-led, hundreds of partners in the public and private sector and reached retailer members across 70 countries, over 10 million many MSIs) over 17 million African farmers and thousands of African businesses in 13 countries employees and Euro2.5trillion in sales – programs on • World Cocoa Initiative sustainability; product safety; health & wellness; end-to- • New Vision for Agriculture (NVA): Over 500 organizations, • Bonsucro end value chain & standards, with specific targets and mobilized over US$10.5 billion in commitments since 2009, of (Better Sugarcane industry commitments; governed by board of 50 CEOs which $1.9 billion have been implemented, reaching some 9.6 Initiative) • Sustainable Agriculture Initiative (SAI) Platform: million farmers to improve economic opportunity, food security Over 50 food and drink companies and affiliate • Better Cotton Initiative and environmental sustainability) members, reaching millions of farmers with a focus on • Roundtable on • Ethical Trading Initiative (ETI): Trade unions, NGOs and improving sustainable practices in arable and vegetable Sustainable Palm Oil companies, with public donor support focused on labor standards crops, beef, coffee, dairy, fruit and water • Roundtable on in apparel and agriculture. Companies across the value chain with • The Global Agribusiness Alliance: 36 agribusiness Sustainable Soy turnover of over US$250 billion companies headquartered mainly in Asia, Africa and the • Sustainable Beef • Scaling Up Nutrition Network (SUN): Global platform with Middle East, established in 2016, with a commitment to Roundtable SUN Business Network consisting of over 160 companies with support the SDGs and tackle major environmental and • International Women’s commitments to reach 125 million consumers each year by 2020 social challenges facing agricultural supply chains and Coffee Alliance with improved nutrition rural communities • African Fertilizer and • Global Alliance for Improved Nutrition (GAIN): Multi-stakeholder • AIM Progress: A forum of over 40 Fast Moving Agribusiness Partnership funding and governance; engaged with hundreds of partners Consumer Goods (FMCG) manufacturers and common across sectors at global, micronutrient/vitamin and national levels, suppliers, to promote responsible sourcing practices • Marine Stewardship with business network of more than 100 companies (including and sustainable supply chains through building Council a Business Platform for Nutrition Research), jointly committed to capability and aligning practices, standards and metrics • Global Salmon Initiative reach over 1 billion people with improved nutrition • International Agri-Food Network: An informal • Aquaculture Stewardship • New Alliance for Food Security and Nutrition: Coalition of coalition of 13 international trade associations involved Council African governments, donor governments, companies, research in the agri-food sector. Aims to increase private sector • Forest Stewardship institutes, NGOs and farmer associations aimed to leverage private commitment to addressing global poverty and food Council investments, public funding and policy reforms to address key security. Member associations reach thousands of constraints to inclusive, agriculture-led growth. Engaged with over • Tropical Forest Alliance international companies, and hundreds of national 180 companies (majority of which are African) and investment associations which represent tens of thousands of small • Flour Fortification Initiative commitments made of $10 billion and medium sized enterprises (SMEs), thousands of • Iodine Global Network • The Sustainable Food Lab: This is a global network of companies, co-operatives, and millions of farmers NGOs, and other orgnizations working collaboratively to address some of the systemic challenges that are preventing progress toward a more sustainable food system
REGIONAL AND COUNTRY-LEVEL NETWORKS AGRA Continental platform with programs GAIN Working with National Fortification in 13 countries Alliances in about 20 countries; NVA Grow Africa and Grow Asia regional Supported by the Amsterdam Initiative Against platforms, plus 19 country platforms malnutrition, the GAIN Nordic partnership. SUN Network operating in 57 countries, with New Alliance Working in 10 countries in Africa SUN Business Network having established National commodity trade associations In national business networks in 11 countries many key producing countries linked to global commodity-specific platforms
The initiatives outlined above have catalyzed and/or helped to scale or replicate thousands of PROJECT-LEVEL, FINANCING AND IMPLEMENTATION PARTNERSHIPS, anchored by individual agribusiness companies partnering with individual (or small numbers of) suppliers, producers, input providers, financial institutions, ICT companies, manufacturers, retailers, NGOs, government entities, donors or research institutes and focused on specific commodities, specific agricultural corridors and/or specific production/manufacturing sites
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 55 Appendix 4 The evolving partnership ecosystem for health and wellbeing
OBJECTIVES FOR PARTNERING DISEASE BURDEN or PATIENT-SPECIFIC FUNDS and PLATFORMS (multi-stakeholder global partnerships, some with national structures) Leveraging additional public, private and philanthropic resources, pooling AIDS, TB and Malaria: Global Fund for AIDS, First 1000 Days campaign; New Alliance for and spreading risks and costs, spreading 1TB and Malaria (GFATM or the Global Fund); Food Security and Nutrition; Micronutrient responsible practices; and/or transforming UNITAID; International Drug Purchase Facility; Initiative; Flour Fortification Initiative; Iodine markets and policy environments to: Campaign [RED] Initiative…. • Diabetes: International Diabetes Federation; • Accelerate drug and vaccine discovery and • Tuberculosis: TB Alliance; TB Drug Accelerator (TBDA); Stop TB Partnership; Global Diabetes Research Innovation development for key disease burdens; Aeras Global TB Vaccine Foundation Partnership; Diabetes Research Institute • Strengthen reliability and lower the costs of • Malaria: Roll Back Malaria; Medicines for Foundation; Global Partnership for Effective manufacturing, supply chain management Malaria Venture (MMV); European Malaria Diabetes Management… and delivery systems for drugs, vaccines, Vaccine Initiative; Malaria No More; Malaria • Cancer: Stand Up to Cancer; International inputs and devices; Elimination Group; United Against Malaria; Cancer Control Partnership; various multi- NetsforLife; Corporate Alliance on Malaria in stakeholder alliances focused on specific • Tackle counterfeiting and improve product Africa… types of cancer and on women… safety and efficacy; • HIV/AIDS: International AIDS Vaccine • Cardiovascular Diseases: World Heart • Harness information and communications Initiative; Pepfar; African Comprehensive HIV/ Federation; Initiative for Cardiovascular technologies to support tele-health and AIDS Partnership (ACHAP)… Health Research in Developing Countries… patient management, including electronic • Chronic Respiratory Diseases: Global medical records, remote access and big data Neglected Tropical Diseases (NTDs): Alliance Against Chronic Respiratory analytics, and to increase the reach of public 2London Declaration on NTDs; Uniting Diseases; Global Alliance for Clean Against NTDS; Global Network for NTDs; Cookstoves (which has merged with the health promotions and behavior change Drugs for Neglected Diseases initiative (DNDi); Partnership for Clean Indoor Air); initiatives; Mectizan Donation Programme; International • Mental Health: Mental HealthNOW… • Build capacity, voice and strength of Trachoma Initiative; Global Alliance for the • Environmental Health Challenges: Global healthcare workers, especially Elimination of Lymphatic Filariasis; Global Polio Road Safety Partnership; Global Public- community health workers, nurses, Eradication Initiative; Stop Transmission of Private Partnership for Handwashing; Global doctors and health administrators and Polio; STH Coalition - Children without Worms; Water Partnership; Water, Sanitation and policymakers in resource-constrained at least 20 other global or regional platforms Health Partnership; Water and Sanitation for and funds focused on specific NTDs… settings; the Urban Poor; International Federation of Biosafety Associations; International Program Non-Communicable Diseases (NCDs) and • Improve the speed, quality and on Chemical Safety; Global Collaboration to Health Burdens: accountability of humanitarian 3 Develop Pesticides for Public Health… assistance and disaster relief; • General: NCD Alliance; Global Non- Communicable Disease Network; Healthy Maternal and Child Health: Every Woman • Strengthen health systems in a more holistic, Cities Movement; Be Healthy, Be Mobile 4Every Child; Partnership for Maternal, integrated and sustained manner; Initiative; Workplace Wellness Alliance… Newborn and Child Health; Alliance for • Increase policy and practitioner focus • Micronutrient deficiencies and under- Reproductive, Maternal and Newborn Health; on prevention and wellness, not only nutrition: Global Alliance for Improved Pink Ribbon Red Ribbon partnership; Sexual treatment and disease by implementing Nutrition; Micronutrient Initiative; Violence Research Initiative; Coalition for Adolescent Girls; various pediatric more integrated and strategic approaches Scaling Up Nutrition network; vaccine initiatives… to environmental health; population health; health insurance; household incomes COUNTRY-LEVEL STRUCTURES or NETWORKS and economic resilience; and lifestyle management programs Many of the disease burden or patient specific global funds and platforms have country- level structures, affiliations and networks to coordinate and advocate with governments …with the overarching goal of improving and donors, mobilize additional funding, technical and managerial resources, and facilitate universal access, affordability and reliability delivery on-the-ground. A few examples include: of drugs, vaccines, diagnostics, surgery and The Global Fund mobilizes financial resources for country-level programs, working through other treatment regimes (both primary and Country Coordinating Mechanisms, which are nationally appointed and consist of public and secondary care), and especially improving private actors. There are also some 30 Business Coalitions addressing AIDS at the country level; health equity for low and moderate income The Scaling Up Nutrition Network operates through country-led coalitions in 57 countries, families and/or remote populations, while with the SUN Business Network having established national business networks in 11 countries; effectively managing public health budgets. and GAIN is working with National Fortification Alliances in about 20 countries, with additional private sector support provided by the Amsterdam Initiative Against malnutrition and the GAIN Nordic partnership.
56 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT APPENDIX 4
BROADER HEALTH SYSTEM and OPERATIONAL-LEVEL, FINANCING and HUMANITARIAN PLATFORMS IMPLEMENTATION PARTNERSHIPS The global and country-level funds and Examples of company-led financing and MULTI-STAKEHOLDER INITIATIVES platforms have in turn helped to catalyze implementation partnerships #1 Focused on coordinating diverse initiatives that and/or scale or replicate thousands of This is a small sample of strategic mobilize public, private and philanthropic resources to programmatic and operational-level partnerships drawn from some of the largest catalyze the development of innovative market-based financing and implementation partnerships pharmaceutical and healthcare companies solutions and technologies, strengthen health policy and led by an individual company or small as well as health partnerships initiated by number of companies, usually with health systems, build capacity and voice of healthcare non-healthcare companies. They are a other partners. IFPMA, for example, combination of commercially viable, hybrid workers, improve humanitarian crisis response and/or documents over 250 partnerships led by and strategic social investment partnerships. spread responsible practices on access to healthcare. some 20 research-based pharmaceutical Most of the 30 companies listed have a companies engaging with more than number of strategic partnership programs • General: Global Health Innovative Vector Control 1,000 other partners around the world. covering a range of disease burdens, patient Council; Global Health Consortium Since 2005, GBC Health has recognized Partnership; Alliance for Health groups and/or geographic locations, as • Product donations and more than 100 company-led partnerships Policy and System Research well as supporting dozens of other health humanitarian relief: for its ‘Business Action on Health’ awards, (AHPSR); International Medical partnership initiatives led by NGOs and Partnership for Quality judged by independent panels. Since Products Anti-Counterfeiting participating in more systemic multi- Medical Donations 2010, Every Women Every Child, has Taskforce (IMPACT); P4H stakeholder and industry-level platforms. • Catalyzing innovation in mobilized partnership commitments from – Social Health Protection new health technologies, more than 300 organizations, including Network John & Johnson Bayer Contraceptive products and services: many companies. Almost every multi- Safe Kids Worldwide Security Initiative/ • Vaccines and Immunization: Health Enterprise Fund; Global stakeholder and industry-level fund or Initiative/ Campaign NTDs program GAVI Alliance Health Innovative Technology platform described on this page can point for Nursing’s Future DSM Improving • Health Workers: Global Fund (GHIT); Foundation for to hundreds of such operational-level Merck Mectizan Nutrition Improving Donation Program / Lives initiative Health Workforce Alliance Innovative New Diagnostics; partnerships. Merck for Mothers Unilever Sustainable (GHWA); One million PSP4H (Private Sector They are being led not only by GSK Africa Malaria Living Plan (includes Community Health Worker Innovation Programme Initiative/ GSK- improving health and Campaign; World Health for Health); Global pharmaceutical and healthcare Save the Children wellbeing as a core Professions Alliance Innovation Fund (USAID, companies, but also companies in other Partnership pillar) industry sectors. Companies in other • Disease surveillance and DFID, SIDA, Australia Pfizer International Danone Nutriways industry sectors, such as financial institutions, control: Global Outbreak and Omidyar Network); Trachoma Initiative/ initiative/ social information and communications Diflucan Partnership innovation funds Alert and Response Network; PATH technology (ICT) companies, manufacturers, Program Nestlé Creating retailers, and companies that employ large Eli Lilly MDR-TB Shared Value model Partnership / NCD (nutrition, water and INDUSTRY LEVEL, BUSINESS-TO- local workforces and reach large number of Partnership rural development) BUSINESS ACTION people along their value chains can act as #2 Novartis Dow Breakthrough Business leadership groups or trade and industry federations extremely valuable platforms for supporting Africa Health Innovations platform better access to healthcare, personal safety and associations that bring together companies active in the Alliance/ Malaria BASF Accelerator and wellness. They include apparel and toy Initiative/ Solutions in health healthcare sector and different parts of the health research manufacturing companies, fast moving Social Ventures and wellness and development, manufacturing, and delivery value chain consumer goods companies, and large-scale Novo Nordisk Coca-Cola Wellness, as well as companies that have a potentially large health- infrastructure, energy and mining projects. Cities Changing Women and Water Diabetes initiative strategic goals related footprint (food and beverage, ICT, mining, apparel Most of these business-led, operational Bristol Myers IBM World manufacturers etc.) health and wellness partnerships are also Squibb Secure the Community Grid/ Future program partnering with: host government ministries Health Corps • International Federation (including mHealth and AbbVie Neglected of public health or national public health Vodafone, IBM and of Pharmaceutical Disaster Response) Diseases Initiative Novartis SMS for Life institutions; health or development NGOs Manufacturers and Abbott Tanzania Google Google Earth • International Council on (such as PATH; CARE; Save the Children; Associations (IFPMA) Health Partnership/ health maps and Mining and Metals, which World Vision etc.); private philanthropic Improving Child surveillance/ impact • Guiding Principles on Access has a health focused foundations (such as the Bill & Melinda Nutrition initiative awards to Healthcare workstream Gates Foundation; Rockefeller Foundation; BD Global Health ExxonMobil Malaria Omidyar Network and Skoll Global Threats Initiative/ US Building Initiative • GBC HEALTH: (Formerly the • Responsible Care; Healthy Communities Fund etc.); inter-governmental agencies BHP Billiton Global Business Coalition International Cyanide Code program and development finance institutions Sustainable Against HIV, (and other chemical industry GE Communities (such as the WHO, World Bank, other UN TB & Malaria) safety codes) Healthymagination Initiative agencies and the EU); bilateral donors (such / Sustainable • BSR’s Healthcare Working Sumitomo Malaria • International Food and as United States, Canada, Australia, Japan Healthcare Solutions/ Bednets partnerships Developing Health Beverage Alliance Group and HERProject and European countries and their donor Abraaj Global Health Globally program • Partners in Food Solutions • Gates CEO Roundtable agencies); and scientific research institutes Fund and academic institutions. • GSMA Mobile for focused on NTDs Development program
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 57 Appendix 5 The evolving partnership ecosystem for financial services for sustainable development
OBJECTIVES FOR PARTNERING TRANSFORMATIONAL CHANGE PLATFORMS
Dramatically scale the amount of funding MULTI-STAKEHOLDER or INDUSTRY-LEVEL COLLECTIVE ACTION 1for the SDGs and climate commitments: Coalitions that aim to spread more responsible, inclusive and sustainable Leverage an additional US$3 to 6 trillion in new practices in the financial sector and transform capital markets investment per annum from a combination of • Financial Stability Board: Established in and service providers to spread awareness public, commercial and philanthropic sources 2009 to promote international financial and good practice on investments made in of capital especially in key sectors (such as stability, including work to develop companies, organizations and funds which sustainable infrastructure, agriculture, health, requirements for climate-related financial aim to achieve social and environmental education etc.), in high-risk locations (such as disclosures. impact as well as financial returns. fragile states and locations most threatened by • Carbon Pricing Leadership Coalition: • Global Banking Alliance for Women: climate change) and in high-potential innovation Established in 2014, with support from Established in 2000 as a consortium of public clusters, corridors and cities (where there is some 74 governments and more than 1,000 and private financial institutions interested in potential for synergies, positive externalities corporations and financial institutions as well promoting women’s access to finance, today and a greater multiplier effect than through as business leadership networks, to advocate about 46 banks, nonprofits, microfinance for effective carbon pricing policies. institutions and development finance individual projects). institutions operating in 135 countries. • Sustainable Stock Exchanges Initiative: Established in 2009, partners include 48 • Consultative Group to Assist the Poorest: Spread the integration of environmental, exchanges in 52 countries, representing Established in 2000 as a global partnership of 2social and governance (ESG) criteria: some 3,800 issuer corporations and $48 34 public and private organizations that seek Consider ESG risks and opportunities as well trillion in market capitalization. to advance financial inclusion. as financial ones in the design and delivery of • Principles for Responsible Investment: • Global Partnership for Financial Inclusion: financial products and services, investment Established in 2006, signatories include Established in 2010 as an inclusive platform analysis, decision-making and capital markets. 245 asset owners and 691 investment for all G20 countries, interested non-G20 And spread standards for public reporting on managers with about $59 trillion in assets countries, private and nonprofit stakeholders ESG performance by both corporations and under management. An estimated 63% of to carry forward work on financial inclusion financial institutions. professionally managed assets are managed • Alliance for Financial Inclusion: Established by PRI signatory investment managers, but in 2011, as a knowledge network of central just 19% of assets are held by PRI signatory Promote longer-term horizons: banks and other financial regulatory bodies asset owners. in developing countries 3Change regulations as well as fiscal and • Equator Principles: Established in 2004 • Better Than Cash Alliance: Founded in 2012 market incentives to reward patient capital and as an ESG risk management framework for long-term performance as well as short-term as a global coalition of governments, private project finance adopted by 85 financial sector, and development organizations results. institutions in 35 countries and accounting committed to moving from cash to electronic for over 70 percent of international Project payments. Improve financial transparency and Finance debt in emerging markets. • GSMA Mobile for Development initiative: 4accountability: Concerted and coordinated • Carbon Principles; Climate Principles and Established in 201x to bring together mobile efforts are needed more than ever before to Green Bond Principles: Established by operators, the wider mobile community and tackle corruption, money-laundering and tax small groups of banks since 2008 to establish development organizations to deliver mobile industry guidelines in climate finance and services with social impact to underserved evasion and avoidance, all of which seriously green bond markets. undermine efforts to achieve sustainable populations. To-date 50 mobile operators have partnered with others on 104 initiatives development. The financial sector has a crucial • Banking Environment Initiative: Established in 2010, now 13 CEOs of global across 49 countries. role to play in this area by embedding and banks focused on developing guidelines spreading zero-tolerance standards for such • Wolfsberg Group: Created in 2000 as for sustainable banking and compacts an association of thirteen global banks activities in all financial services from consumer on specific issues, such as deforestation to develop frameworks and guidance for and commercial banking to asset management (developed in cooperation with the the management of financial crime risks, and capital markets. Consumer Goods Forum). particularly with respect to Know Your • Emerging Market Private equity Customer, Anti-Money Laundering and Make financial products and services more Association: Established in 2004 to Counter Terrorist Financing policies. inclusive: Improve access and affordability promote role of private capital in emerging • Extractive Industries Transparency 5 markets, now over 300 members including for lower-income households and communities Initiative: Created in 2002 by governments, institutional investors, fund managers and and for small, medium and micro-enterprises oil, gas and mining companies, institutional industry advisors, who together manage investors, NGOs and international (SMMEs) in the design and delivery of financial more than US$1 trillion of assets and have organizations, to spread standards for products and services (ranging from consumer offices in more than 100 countries. revenue transparency in resource-rich and small business finance to more inclusive • Global Impact Investing Network: countries. To-date 45 countries have infrastructure funding). Established in 2009, now a network of more published data, disclosing more than than 200 asset owners, asset managers $1.8 trillion in revenues.
58 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT APPENDIX 5
INNOVATIVE FINANCING MECHANISMS GLOBAL or SECTORAL ‘BLENDED FINANCE’ OPERATIONAL-LEVEL FINANCING and #1 FUNDS and FACILITIES #2 IMPLEMENTATION PARTNERSHIPS Funds that combine public, private and/or philanthropic sources of Thousands of partnerships now exist between one or a small capital and different risk appetites in order to achieve greater scale number of funders (commercial, philanthropic or public) and societal impact. and an individual company or project. These combine commercial capital, development finance/public funds and/ a) PUBLIC SECTOR-LED: Funds anchored by public/donor or philanthropic funds to achieve more inclusive and/or finance that aim to make innovative use of concessional or more sustainable business models and value chains or to non-concessional public funds to leverage private financing scale the reach and impact of corporate social investments by de-risking investments; supporting technical assistance; and humanitarian programs. promoting policy reform; and/or enhancing public goods Examples include: and positive externalities. Examples include: • IFC’s Inclusive Business Unit • Climate and Green Growth Food Security Program (GAFSP); Funds and Facilities: Global New Alliance for Food Security and • USAID’s Global Development Alliances Environment Facility and over 20 Nutrition… • GE Ventures and Sustainable Healthcare Solutions multilateral Climate Investment • SMME Funds: Global SME • Citi for Cities Initiative Funds and Initiatives (including Financing Facility; SME Finance • Bank of America’s Environment Business Initiative the Green Climate Fund)… Forum, including g-20 SME • Global and Regional Finance Challenge; Microfinance • Danone Social Innovation Funds Infrastructure Facilities: Global Capacity Building Fund… • Dow Breakthrough Innovations platform Infrastructure Facility; IFC’s • Inclusive business model • Abraaj Growth Markets Healthcare Fund Global Infrastructure Fund and challenge funds (mostly • Pearson Affordable Learning Fund Infraventures; Public Private technical assistance and grant): Infrastructure Advisory Facility Africa Enterprise Challenge (PPIAF); Power Africa… Fund; Business Call to Action; • Other Sector Funds (Health, Global Innovation Fund; BMZ Nutrition, Food Security): Over DevelopPPP.de; Dutch Good 50 vertical, disease-specific global Growth Fund; DFID Trade in health funds (some with national Global Value Chains Fund; coordination or implementation USAID Global Innovation platforms); Global Agriculture and Ventures…
b) PRIVATE SECTOR-LED: Funds created by coalitions of private funders that attract different types of capital to deliver better sustainable development results as well as good commercial or financial returns. Examples include: • Breakthrough Energy Coalition: • Finance for Resilience Platform: Launched in 2015 by Bill Gates Initiated in 2013 by Bloomberg and other high-net worth New Energy Finance and led by investors to catalyze research and the Climate Policy Initiative, this investment in clean technologies open and action-oriented platform in electricity generation and collects and helps to implement storage, transportation, industrial ideas to accelerate private finance use, agriculture, and energy fo clean energy, climate and green system efficiency. Collaborating growth. with a group of countries • responsAbility AG: Established making major public research in Switzerland in 2003 as an asset commitments aligned with the manager making investments private investments via the Mission in development oriented SMEs. Innovation Initiative. Partners include, founding partner • Catalytic Finance Fund: Launched Credit Suisse and currently in 2014 by Bank of America, with an Baumann & Cie., Raiffeisen additional eight private and public Switzerland, Swiss Re Foundation, financial institutions joining in 2015 and Vontobel Beteiligungen AG. to direct US$8 billion in capital for high-impact sustainability projects
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 59 Appendix 6 The evolving partnership ecosystem for metals and mining
CORE OBJECTIVES FOR PARTNERING Spreading responsible performance standards to identify and mitigate negative impacts of mining (human rights, water, waste management, reclamation etc.) – promote health and safety in mining – improve revenue and tax transparency – enhance socio-economic contribution and benefit sharing - increase local employment, job creation and skills development – improve local procurement and enterprise linkages – address climate change and energy efficiency – support artisanal and small-scale mining – strengthen shared infrastructure – improve dispute resolution and community engagement – enhance social investments
INDUSTRY-LEVEL, PRECOMPETITIVE COLLECTIVE ACTION COMMODITY-SPECIFIC SYSTEM-LEVEL, MULTISTAKEHOLDER • International Council on Mining & Metals (ICMM): A coalition of ALLIANCES INITIATIVES 23 leading mining companies and 34 national and regional mining (some industry-led, many MSIs) • Extractive Industries Transparency Initiative associations, to enhance the contribution of mining to sustainable (EITI): Overseen by representatives from development through public reporting on a common framework and • Aluminum Stewardship governments, oil, gas and mining companies, identifying and sharing good practices. Together, ICMM’s members Council institutional investors, NGOs and international operate at over 950 sites in about 58 countries across the globe, organizations, EITI aims to spread standards for • Better Gold Initiative excluding exploration activities, and are responsible for a significant revenue transparency in resource-rich countries. percentage of global minerals and metals production. They employ • Conflict Free To-date 45 countries have published f=data, approximately 800,000 of the 2.5 million workers in the formal mining Gold Initiative disclosing more than $1.8 trillion in revenues. industry. Through the 34 associations, ICMM is connected to another • Voluntary Principles on Security and Human 1,500 companies in the sector. • Conflict Free Tin Initiative Rights (VPs): A coalition of about 50 oil, gas and • Partnering Against Corruption: Hosted by World Economic Forum • Kimberley Process mining companies, NGOs and governments, with initial extractive sector leadership, now a cross-industry alliance (for diamonds) which implements principles and reporting of more than 80 major corporations developing guidance and requirements to ensure respect for human rights in • Diamond Development commitments to tackle corruption and a coordinated industry voice the use of public and private security providers by Initiative at national and regional levels participating companies. • Responsible Jewelry Council: A whole-of-supply chain standard • International Cyanide • Responsible Mineral Development Initiative setting and certification initiative with more than 100 participants, Management Code (WEF): A multi-stakeholder framework drawing and a focus on gold and diamonds on inputs from mining companies, NGOs and • Electronics Industry Citizenship Coalition (EICC), more than governments in 13 countries to strengthen mining 100 electronics companies with combined annual revenue of as a more proactive and responsible partner in over $4.5 trillion to promote responsible supply chain standards, national and community development including a program on conflict-free minerals • Initiative for Responsible Mining Assurance • Automotive Industry Action Group (AIAG), a coalition of (IRMA): A multi-stakeholder initiative that professionals in the automotive value chain aimed at improving is developing an independently verifiable supply chain standards and corporate responsibility, and including a responsible mining assurance system to improve program on conflict-free minerals social and environmental performance in the mining sector. • Equator Principles, a banking-led initiative to spread better environmental and social risk management in project finance, • Business and Biodiversity Offsets Program including for large mining projects. Initiated by les than 10 banks, (BBOP): A collaboration of more than 75 different today more than 80 financial institutions in 36 countries have companies, financial institutions, government publicly adopted the principles, covering over 70 percent of agencies, civil society organizations and service international Project Finance debt in emerging markets. providers to develop standards for biodiversity offsets and conservation banking
REGIONAL AND COUNTRY-LEVEL NETWORKS • National chambers of mining and commodity associations – In many key producing countries linked to global commodity-specific platforms • Industry networks such as the Prospectors & Developers Association of Canada and the Multi- stakeholder Devonshire Initiative based in Canada – also active in developing and spreading responsible business practices among their members operating globally.
Thousands of PROJECT-LEVEL, FINANCING AND IMPLEMENTATION PARTNERSHIPS, anchored by individual mining companies partnering with individual or small numbers of financial institutions, NGOs, government entities, donors or research institutes and focused on specific commodities, specific resource-rich regions and or mine sites and communities.
60 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT Endnotes
Foreword World” rankings, Access to Medicines Index, Access 17 Global Development Incubator (2015) More than 1 Rees, Caroline. (2017). Respect for Human to Nutriton Index, Behind the Brands, various UN the Sum of its Parts: Making Multi-Stakeholder Rights: Creating a holistic framework for business and IFC award programs and the ACCA Awards Initiatives Work. USAID, GDI and Omidyar contribution to the SDGs. Shift. for sustainability reporting) and as key members Network. of the major corporate responsibility coalitions 2 Nelson, Jane and Beth Jenkins. (2016). Tackling 18 Nelson, Jane (2002) Building Partnerships: during this period. There was strong overlap, for Cooperation between the United Nations Global Challenges: Lessons in System Leadership example, in the corporate membership of the from the World Economic Forum’s New Vision for system and the private sector. United Nations, five business-led coalitions that spanned industry Department of Public Information, NY. Agriculture Initiative. Corporate Responsibility sectors and national boundaries and Initiative, Harvard Kennedy School. were described by Grayson and Nelson (2013) See also: 3 UN Press Release. (1991). Secretary-General as “the global field-builders” that helped to The Partnering Initiative. proposes global compact on human rights, promote and embed responsible practices into http://thepartneringinitiative.org labour, environment, in address to World core business in the decade from 1991 to 2001. 19 Professor John Ruggie, “Keynote Address to the Economic Forum in Davos. http://www.un.org/ Namely, the World Business Council for Sustainable United Nations Forum on Business and Human press/en/1999/19990201.sgsm6881.html Development, the UN Global Compact’s Rights” exploring the relationship between 4 http://www.ipsnews.net/2001/01/development- LEAD group of companies, Business for Social the Sustainable Development Goals and the globalisation-must-work-for-all-or-none-warns- Responsibility, the former International Business UN Guiding Principles on Business and Human annan/ Leaders Forum, and CSR Europe. Likewise, many Rights, 14 November 2016. of the same companies have played a leadership 20 GE Ecomagination 2020 Partnerships. www. role in the global development and sustainability- ge.com/about-us/ecomagination/partnerships Report related initiatives of the World Economic Forum (Accessed October 10, 2016) 1 For a framework to think about a company’s and of the International Chamber of Commerce development multipliers see: Nelson, Jane. and its affiliates. 21 Ibid (2003) Development Multipliers: Revisiting the 7 KPMG (2015) Currents of Change: The KPMG Survey 22 Gradl, Christina and Beth Jenkins. (2011) Tackling core responsibility and contribution of business of Corporate Responsibility Reporting. Barriers to Scale: From Inclusive Business Models to development. IBLF Policy Paper, Number 4. to Inclusive Business Systems. Corporate Social 8 http://www.sustainability-indices.com International Business Leaders Forum. Responsibility Initiative, Harvard Kennedy School. (Accessed August 25th 2016) For a framework to think about ensuring that 23 World Bank Group (2016) Private Sector 9 www.unglobalcompact.org the various activities through which a company Development: Recent Lessons from Independent (Accessed August 25th, 2016) influences sustainable development are aligned Evaluation. What Works 10 Principles for Responsible Investment. Annual to maximize positive outcomes for people see: See Also: Rees, Caroline (2017). Respect for Human Rights: Report 2016. The PRI is an investor initiative in Creating a Holistic Framework for Business partnership with UNEP Finance Initiative and World Bank Group and PPIAF (2016) The State Contributions to the SDGs. www.shiftproject.org UN Global Compact of PPPs: Infrastructure Public-Private partnerships in Emerging Markets and Developing Economies 11 UNCTAD. Handbook of Statistics 2016; World 2 From Billions to Trillions: Transforming development 1991-2015 finance Post 2015 Financing for Development: Federation of Stock Exchanges (http://www.world- Multilateral Development Finance. Prepared exchanges.org/home/index.php/statistics); and World Bank Group (2013) World Bank Support jointly by the African Development Bank, the World Bank Indicators (http://data.worldbank. to Public Private Partnerships - Lessons from Asian Development Bank, the European Bank org/indicator/CM.MKT.LDOM.NO) Experience in Client Countries (FY02-12) for Reconstruction and Development, the 12 Ideas for Action for a Long-Term and Sustainable 24 World Bank Group (2016) Private Sector European Investment Bank, the Inter-American Financial System (2017) Paper commissioned Development: Recent Lessons from Independent Development Bank, the International Monetary by the Business and Sustainable Development Evaluation. What Works Fund and the World Bank for the April 18, 2015 Commission. 25 Ibid. Development Committee Meeting. 13 For more details on of the challenges and 26 https://sustainabledevelopment.un.org/ 3 For more information on systemic change and successes of scaling corporate responsibility partnerships/ Accessed September 25th, 2016) system leadership see: and sustainability, see: Grayson, David and Jane 27 http://www.businessfor2030.org (Accessed Nelson (2013). Corporate Responsibility Coalitions: Nelson, Jane and Beth Jenkins (2016) Tackling September 25th, 2016) Global Challenges: Lessons in System Leadership The past, present and future of alliances for 28 Ingram, M. George, Johnson, Anne E. and Helen from the World Economic Forum’s New Vision for sustainable capitalism. Greenleaf Publishing and Moser. (2016) USAID’s Public-Private partnerships: Agriculture Initiative. Harvard Kennedy School, Stanford University Press. A data picture and review of business engagement. CSR Initiative (and other system leadership 14 The UN Global Compact-Accenture Strategy CEO Global Economy and Development Working publications cited in the endnotes of this report). Study 2016 Paper 94. Brookings. 4 WWF. Market Transformation Initiative. 15 GE 2016 Global Innovation Barometer. 29 Clinton Global Initiative (2015) CGI Commitment Fact Sheet 2015. http://www.gereports.com/innovation- Portfolio Analysis. https://www.clintonfoundation. barometer-2016/ 5 2016 Edelman Trust Barometer. Although trust in org/clinton-global-initiative/about-us/ business has improved since the global financial 16 SustainAbillity (2016) Orchestrating Change: commitments-action crisis and is higher than trust in government, Catalyzing the Next generation of Multi-Stakeholder (Accessed September 25th, 2016) it remains low in most countries, and there is a Collaboration for Sustainability. 30 International Civil Society Centre (2014) growing gap in attitudes between the informed See also: Multi-Stakeholder Partnerships: Building Blocks public and mass population. The 2016 Sustainability Leaders Survey. for Success. A GlobeScan/ SustainAbility Survey in partnership 6 A core group of about 250 to 300 companies See Also: with Sustainable Brands has played an active role over the past two Pattberg, Philipp and Oscar Widerberg (2014): GlobeScan and SustainAbility (2013) decades, both as individual leaders (recognized Transnational Multi-Stakeholder Partnerships Collaborating for a Sustainable Future. by awards and ranking systems such as the Dow for Sustainable Development. Building Blocks A GlobeScan/SustainAbility Survey Jones Sustainability Index, Corporate Knights, for Success. IVM Report, R-14/31. Amsterdam: FTSE4Good, the World Environment Center’s Gold Institute for Environmental Studies. Medal Award, Fortune Magazine’s “Change the and
PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 61 ENDNOTES
Dodds, Felix (2015) Multi-Stakeholder Partnerships: 42 See the Partnering Alliance; Collaborate2030 and Making them work for the Post-2015 Development other partnership tools, frameworks and reports Agenda. produced by The Partnering Initiative at 31 International Civil Society Centre (2014) Among other frameworks and toolkits, TPI has Multi-Stakeholder Partnerships: Building Blocks also developed a five-level framework outlining for Success. the following actions that are needed to achieve 32 See the three flagship reports of the Global partnership impact at scale: building capacity Commission on the Economy and Climate. for individuals’ partnering skills; ensuring In particular: The Sustainable Infrastructure organizations are fit for partnering; ensuring Imperative: Financing for Better Growth and collaboration reflects latest good practice Development. (2016) thinking; investing in professional backbone systems to catalyze partnerships; and ensuring 33 McKInsey&Company (2016) Financing Change: enabling partnering policy. How to mobilize private-sector financing for sustainable infrastructure. McKinsey Center for 43 For information on partnership tools and training Business and Environment. programs at these organizations see: 34 The New Climate Economy (2016) The Sustainable Partnership Brokers Association: http:// Infrastructure Imperative: Financing for Better partnershipbrokers.org/ Growth and Development. The 2016 New Climate Collective Leadership Institute: http://www. Economy Report, The Global Commission on the collectiveleadership.de/apex/cli/home/ Economy and Climate. SMU Master of Tri-Sector Collaboration: https:// 35 For more information on inclusive business www.smu.edu.sg/programmes/postgraduate/ models see: IFC’s Inclusive Business website and master-tri-sector-collaboration the project-level partnerships and investments, The Partnership Resource Centre at Rotterdam publications and awards program supported by School of Management, Erasmus University: the IFC: http://www.ifc.org/wps/wcm/connect/ https://www.rsm.nl/the-partnerships-resource- Topics_Ext_Content/IFC_External_Corporate_ centre/ Site/Inclusive+Business The Center for Development Innovation, Business Fights Poverty: Wageningen University: http://www.wur.nl/en/ www.businessfightspoverty.org Expertise-Services/Research-Institutes/centre-for- Business Call to Action (2015) Implementing development-innovation.htm Inclusive Business Models: How business can work 44 Why GISR? The Global Initiative for Sustainability with low-income communities. Ratings. Launched in 2011, GSIR is an impartial 36 http://www.ifc.org/wps/wcm/connect/Topics_ multi-stakeholder initiative which aims “to drive Ext_Content/IFC_External_Corporate_Site/ transparency and excellence in environmental, Inclusive+Business social, and governance (ESG) research, ratings 37 GSMA (2016) 2016 Mobile Industry Impact Report: and indices to improve business performance Sustainable Development Goals and investment decision-making.” http:// ratesustainability.org/about/ 38 Flaherty, Margaret and Ann Rappaport (2015). Agents of Change: Sustainability and Industry 45 ACCA (2016) Mapping the sustainability reporting Trade Associations – An Evolving Value Proposition. landscape: Lost in the right direction Business School Lausanne and Tufts University. 46 One of the major challenges in comparing, 39 ICCA’s website on sustainable development. analyzing and evaluating partnerships for https://www.icca-chem.org/sustainable- sustainable development is the vast array of development/#sub-3 (Accessed October 10, 2016) different partnership models and purposes, and the lack of any commonly agreed definition or 40 Grayson, David and Jane Nelson (2013). Corporate set of principles or criteria for what constitutes Responsibility Coalitions: The past, present and an effective partnership. Numerous academic future of alliances for sustainable capitalism. and practitioner organizations have proposed Greenleaf Publishing and Stanford University categorizations and criteria, but none of these Press. frameworks are universally agreed upon, See also: although many identify common lessons and International Chamber of Commerce (ICC) and UN success factors for building partnerships. Global Compact (2015). Scaling Up Sustainability Collaboration: Contributions of Business Associations and Sector Initiatives to Sustainable Development. Flaherty, Margaret and Ann Rappaport (2015). Agents of Change: Sustainability and Industry Trade Associations – An Evolving Value Proposition. Business School Lausanne and Tufts University. 41 Grayson, David and Jane Nelson (2013). Corporate Responsibility Coalitions: The past, present and future of alliances for sustainable capitalism. Greenleaf Publishing and Stanford University Press.
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PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT 65 Acknowledgments
The author would like to thank the following colleagues who Terri Toyota, Head of the Foundations Community and have provided valuable input and feedback on the paper or on Development Finance at WEF, our co-chairs, Charlotte Petri the topic of partnerships for sustainable development more Gornitzka and Bertrand Badre, and to the GFC colleagues who broadly in preparation of this report: have informed my work on partnerships over a number of years, Ann Florini, Professor of Public Policy and Director of Harvard Kennedy School: Professor John Ruggie, Berthold the Master Tri-Sector Collaboration at Singapore Management Beitz Professor in Human Rights and International Affairs and University; Heerad Sabati, CEO of the Fourth Sector Group; Faculty Chair of the Corporate Responsibility Initiative; David Heather Grady, Vice President, Rockefeller Philanthropy Wood, Executive Director of the Initiative for Responsible Advisors; Gavin Wilson, CEO, IFC Asset Management Company; Investment; and nonresident senior fellows, Beth Jenkins, and David Nabarro, Special Advisor to the UN Secretary- Insights Director at Business Fights Poverty; Caroline Rees, General on the 2030 Agenda for Sustainable Development President of Shift; Mark Kramer, Managing Director of FSG; and Climate Change. Scott Jerbi, Senior Advisor Policy and Outreach at the Institute for Human Rights and Business; and Simon Winter, Senior The Partnering Initiative: Darian Stibbe, Executive Director Vice President of Development at TechnoServe. Thanks also to and Dave Prescott, Senior Advisor for their feedback on the Scott Leland and Minoo Ghoreishi in the Mossavar-Rahmani paper and the important work they and their colleagues Center for Business and Government for their support, and to are doing to develop tools and training programs to build our designer, Alison Beanland, for all her work in producing individual and institutional capacity for partnerships. the paper. Thanks also to Ros Tennyson, a former colleague at the International Business Leaders Forum and founder of Business and Sustainable Development Commission: Jeremy Oppenheim, Programme Director and Melinda George, what have now become The Partnering Initiative and the Alex Evans, Dinah McLeod and Clare Oh. Thank you also to Partnership Brokers Association, whose work continues to several colleagues supporting the work of the Commission inform and inspire my own. who have provided useful examples, feedback or insights: Business Fights Poverty: Zahid Torres Rahmin, Co-Founder Amanda Gardiner from Pearson; Fred Sicre from the Abraaj and Director, and Richard Gilbert, Stakeholder Engagement Group; Barry Parkin, Marika McCauley Sine and Kate Wylie Director. from Mars Inc.; Albena Melin from the IFC; Andrew Steer from David Grayson, my co-author of the book Corporate the Word Resources Institute; John Elkington from Volans; Responsibility Coalitions: The past, present, and future of and Elizabeth Cousens from the United Nations Foundation. alliances for sustainable capitalism; Ira Jackson, my co- And to the Co-Chairs of the Commission, Mark Malloch-Brown author of the book Profits with Principles: Seven Strategies for and Paul Polman, and the Commissioners who have provided Delivering Value with Values; and Simon Zadek, my co-author practical examples of personal leadership and collective action of the report Partnership Alchemy, all of which have informed towards sustainable development. the research and writing of this paper. Brookings Institution: Homi Kharas, Senior Fellow and Co-Director in the Global Economy and Development And importantly, to the many inspiring colleagues around program, and Senior Fellows, George Ingram and John the world who are implementing partnerships in practice McArthur, for their feedback on the paper and as longstanding – in particular, the individuals and institutions behind the colleagues who have provided many valuable insights and more than 100 examples of collaboration that are briefly critiques on the role of the private sector and public-private profiled in this paper, ranging from value chain and project- partnerships in global development. level partnerships to industry-wide business alliances and city-based, national and global multi-stakeholder platforms. World Economic Forum: Lisa Dreier, Head of Agriculture Almost all of these partnerships could have been the subject and Food Security, and Lorin Fries, Head of Food Systems of detailed analysis and a stand-alone paper in their own Collaboration plus other members of the New Vision for right, and this overview report could not do them full justice. Agriculture team. Thank you also to my colleagues on the Thank you for your leadership, the lessons you have shared WEF’s Global Future Council on International Governance, with me on what works and what doesn’t, and the example Public-Private Cooperation and Sustainable Development, you are setting for many others to follow. who have provided valuable examples and insights on partnerships for sustainable development, especially Jane Nelson
66 PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT Useful websites focused on partnerships for the SDGs
These provide tools and examples across diverse industry sectors, geographies and all the SDGs. In addition there is a growing number of sector-specific industry associations or platforms that focus on the relevance of the SDGs and examples of business leadership and partnership for a specific industry sector or in specific geographies or to address specific SDGs.
Partnerships for SDGs (Hosted by the United Nations) https://sustainabledevelopment.un.org/partnerships/ Business and Sustainable Development Commission http://businesscommission.org SDG Compass (Supported the UN Global Compact, World Business Council for Sustainable Development and Global Reporting Initiative) https://sdgcompass.org SDG Industry Matrix (Supported by the UN Global Compact and KPMG) https://www.unglobalcompact.org/library/3111 Business for 2030 (Supported by the United States Council for International Business) http://www.businessfor2030.org SDGs Zone (Hosted by Business Fights Poverty) http://businessfightspoverty.org/blog/category/sdgs- zone/ SDG Guide (Hosted by the Sustainable Development Solutions Network) https://sdg.guide SDG Index and Dashboard (Supported by the Sustainable Development Solutions Network and Bertelsmann Stiftung) http://www.sdgindex.org SDG Philanthropy Platform (Supported by the Foundation Center, UNDP and Rockefeller Philanthropy Advisors) http://sdgfunders.org UN Foundation: Sustainable Development Goals Reports and Resources http://www.unfoundation.org/features/globalgoals/the- global-goals-reports-and-resources.html The Partnering Initiative http://thepartneringinitiative.org Corporate Responsibility Initiative Business & Sustainable Development Commission Harvard Kennedy School c/o Systemiq 79 John F. Kennedy Street 1, Fore Street Cambridge, MA 02138 USA London ECY 5EJ
CRInitiative.org. [email protected] www.hks.harvard.edu/centers/mrcbg/programs/cri www.businesscommission.org