Executive Update: After the Dust has Settled
Global Compact Network Australia | October 6, 2017
(New York, 6 October 2017) The UN General Assembly week in New York last month was an important and inspiring gathering of leaders from Government, business, civil society and academia from all corners of the world to debate how to create the world we all want. Or, more specifically, how to take action on the 17 Global Goals and turn inherent risks into opportunities before 2030.
The United Nations Global Compact started the week in a big way by gathering 25 chief executives from the world’s most influential businesses at the inaugural CEO Roundtable to take stock of the Global Goals two years after their adoption. The message that emerged loud and clear from this meeting was that climate change and inequality form the two major challenges to society, with both lacking behind the indicators set up to track progress on the Global Goals.
Efforts to slow the pace of climate change have come up short, as global temperatures and natural disasters continue to rise. At best, we have 1,000 days to create a turnaround. On the social front, widening inequalities among people across the world have resulted in dangerous divides, conflicts and social unrest. And despite important progress, half of the world’s population is still living on less than USD 2 a day, with only a third of the extremely or moderately poor employed.
Progress on gender inequality, too, still lags far behind, and women continue to face significant economic, social and legal barriers to equality. Indeed, if women’s participation in the formal economy were equal to that of men’s, an estimated USD 28 trillion would be added to global GDP. Furthermore, 30 per cent of the world’s 1.8 billion young people are neither employed nor in school or training programmes; and over 57 million children of primary school age are still out of school. With less than 5,000 days to go to meet the Global Goals by 2030, time is running out to create a fair and equitable world where everyone prospers.
But what is the business contribution to these enormous global challenges? According to the UN Global Compact’s new 2017 Progress Report: Business Solutions to Sustainable Development, more than 75 per cent of companies that take part in our initiative have already started addressing the Global Goals. In 69 per cent of these companies, this effort is led by the CEO as a strategic innovation agenda driving long-term sustainable growth.
This is a very positive result, but it also raises the question of exactly how companies are integrating the Global Goals into their business strategies. Is it a superficial selection of a couple of goals, or is it an in-depth analysis of the meaning of these Global Goals to the company and its stakeholders? The Progress Report also demonstrates that only a few companies are actually measuring the societal impact of their work with our Ten Principles and the Global Goals.
Building on this observation, we had the pleasure of launching a set of very important resources at the UN Global Compact Leaders Summit, held later on during the week. First, the Blueprint for Business Leadership on the SDGs guides ambitious companies on how to fully embed the thinking behind the Global Goals as a whole into business strategy development. The Blueprint builds upon the Ten Principles as a foundation for responsible business and addresses the interconnectedness among the Global Goals, their systemic nature and how each interacts throughout the economic, social and environmental dimensions.
Together with the Global Reporting Initiative (GRI), we also launched the Business Reporting on the SDGs: An Analysis of the Goals and Targets resource that will lead to a sister document, A Practical Guide to Defining Priorities and Reporting, to be released in the new year. With such a huge business interest in the Global Goals, guidance on how to report is critical. Measurement, reporting and action are closely connected, and the companies that invest in directing their business towards the Global Goals should be recognized for doing so. Here, the financial sector plays a hugely important role, and reporting on the Global Goals must make sense for the financial analysts and investors.
Innovative financing for the Global Goals was the top priority at the UN Private Sector Forum, an event organized by the UN Global Compact together with key partners. Hosted annually by the UN Secretary-General, this 2017 Forum marked the first for Secretary-General António Guterres, and focused on the theme of Financing the 2030 Agenda: Unlocking Prosperity.
It is estimated that we will need USD 5 to 7 trillion annually to deliver the Global Goals by 2030. It is crucial that the financial sector joins the growing global movement aligning behind these goals by developing innovative financial products channel private funding where it is needed most. The crucial role for the investment community cannot be understated: if the financial sector does not enroll in the movement, we will lose the race for the last 5,000 days.
Fortunately, it looks like the sector is moving towards bold action, with companies like Pimco announcing plans to issue SDG bonds, based on requests from their clients. In sum, over 25 new commitments to finance the 2030 Agenda were made public by CEOs at the Forum, signaling the emergence of a much-awaited tipping point.
But short-termism and the “business-as-usual” mindset needs to be thrown overboard if we are to match the scope and scale of action needed now. After all, surely, the role of the financial sector is to facilitate positive development in the society — not only to optimize its own profits and returns. In a year from now, the Secretary-General will host a full-day event on innovative financing for the Global Goals to carry forward the conversations from this year’s Forum. It represents a significant opportunity for the financial sector to step up and take responsible business seriously.
At the UN Global Compact, we are already working to support business in taking this opportunity through our Innovative Financing for the SDGs Action Platform. Together with our sister initiative, the Principles for Responsible Investment (PRI), and the United Nations Environment Programme Finance Initiative (UNEP FI), as well as finance companies and other businesses spanning diverse sectors, we have joined in service of a shared mission to rethink the focus on financing in the light of the Global Goals.
So let’s think “business unusual” and kick up some more dust…