ChakravortiB.2015Nov20.WhatBusinessesNeedtoKnowAboutSustainableDevelopmentGoals..pdf

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ARTICLE
GLOBAL STRATEGY
What Businesses Need
to Know About
Sustainable
Development Goals
by Bhaskar Chakravorti

For the exclusive use of A. Jean, 2021.

This document is authorized for use only by Alex Jean in SOS 509-1 taught by Jessica Morrison, Arizona State University from May 2021 to Nov 2021.

GLOBAL STRATEGY

What Businesses Need to
Know About Sustainable
Development Goals
by Bhaskar Chakravorti
NOVEMBER !”, !”#$

DAVE WHEELER FOR HBR

The UN General Assembly held its regular meeting in New York this fall. But this year its purpose was
di!erent – and with signi”cant implications for the future of the human condition. More than 190
member countries committed to “eliminate poverty in all its forms everywhere” by 2030, together
with 16 other “big, hairy, audacious goals” — to use Jim Collins’ memorable phrase. Coming out of
the meeting, the hashtag #2030Now, meant to drum up ground-level support, made a combined total
of more than 1.6 billion impressions on Twitter and Instagram and was the top trending topic in the

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For the exclusive use of A. Jean, 2021.

This document is authorized for use only by Alex Jean in SOS 509-1 taught by Jessica Morrison, Arizona State University from May 2021 to Nov 2021.

U.S. during the assembly. Cultural icons from Shakira to Queen Rania of Jordan were brought in to
lend a certain pizzazz to the goals’ rollout.

If you are running a business, you’re probably asking right about now: “Why should I care?” I believe
there are three reasons why you should.

First, the global goals campaign represents a signi”cant new opportunity for companies that view
emerging and frontier markets as their source of long-term growth. According to estimates from
McKinsey, consumers in these markets could be worth $30 trillion by 2025 — a signi”cant step up
from the 2010 value of $12 trillion. Since 2011, as emerging markets have su!ered from slower growth
and fresh social unrest, that $30 trillion prize seems more distant. Taking action on the global goals
could help address several of these obstacles that are giving rise to “trapped value” in the emerging
markets.

Second, with the public declarations by many companies to help with the goals, there is likely to be
competitive pressure. Some companies could get a jumpstart in their industry in organizing
partnerships and even positioning themselves as leaders in sustainable development using the goals
as a branding anchor. Being slow to take action could lead to the risk of being left out of these
relationships and a source of competitive disadvantage from a brand equity perspective.

Third, the goals cannot be realized without business participation. The price tag for accomplishing
these global goals is estimated to be up to $3 trillion a year for 15 years. For most governments,
“nancing the global goals campaigns will be a stretch; governments have already reneged in the past
on commitments for similar targets.

The UN anti-poverty campaign had been boiled down to 5 P’s: Prosperity, People, Planet, Peace, and
Partnership. But I see a missing sixth P: Pro”ts. Businesses do stand to gain if they get involved in the
right ways. And UN Secretary-General Ban Ki-moon called directly on the business community to get
involved:

I’m counting on the private sector. Now is the time to mobilize the global business community as
never before. The case is clear. Realizing the Sustainable Development Goals will improve the
environment for doing business and building markets.

My colleagues from Citi Foundation, Monitor Institute, and I have conducted research to understand
the primary reasons behind why companies do and don’t invest in the kinds of sustainable and
inclusive business activities embodied by the UN’s new campaign. The most frequently cited
motivation was the mitigation of business risk from potential disruption of operations, supplies, or
reputational damage, cited 38% of the time, followed by the motivation to adhere to industry norms
of transparency, traceability, environmental responsibility, and other accepted standards, cited
27.6% of the time. Winning share in current markets and establishing a beachhead with future

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This document is authorized for use only by Alex Jean in SOS 509-1 taught by Jessica Morrison, Arizona State University from May 2021 to Nov 2021.

customers was cited 25.3% of the time. Building goodwill with key internal stakeholders was the least
frequently cited motivation at 9%.

Our research also highlighted several common barriers. Some are external, such as weak
infrastructure in emerging markets, lack of capacity among target customers and suppliers, and
regulatory and policy complexities. Others are internal to the company: di#culty of monitoring,
measuring, and communicating impact; alternative investment opportunities that take priority; long
time horizons for pro”table payback; and lack of clear funding mechanisms.

But innovating for sustainable development is actually quite close to the processes of “traditional”
innovation. Unlike the case of the latter, where the bene”ts of innovation accrue mainly to the
company, here the bene”ts are shared widely, potentially even with competitors. This can make
the case for innovating in sustainable development more challenging.

Consider these examples of companies using sustainable development practices to enhance social
good or strengthen their own business practices:

• IMPACT 2030 is a recently launched business coalition designed to unite corporate volunteering
e!orts to address the global goals, with founding members that include the likes of IBM, UPS, GSK,
Dow Chemical, Medtronic, Google, and Chevron, among others. A public commitment to such an
e!ort creates an incentive to follow through. Furthermore, if membership of this club develops
signi”cant cache, then it becomes a powerful branding tool and a lever for competitive advantage.

• Mars Incorporated, one of the world’s leading food manufacturers has two key initiatives that
require active involvement with its supply chain and wider ecosystem: a genomics program to
enhance the productivity of farmers in its supply chain and a move towards 100% certi”ed
sustainable sourcing. Simultaneously, it is keen to ensure that certi”cation does not constitute an
additional economic burden on the farmers. In to “nd the right balance, Mars engages with
the Rainforest Alliance to train farmers in sustainable cocoa practices. Moreover, sequencing the
cacao genome led to Mars’ formation of the African Orphan Crops Consortium (AOCC) comprising
African governments, companies, NGOs, and international agencies, to sequence and re-sequence
the genomes of 101 African “back-garden” food and tree crop varieties crucial to 600 million people
who live in rural Africa.

• Olam, an agri-business with seed-to-shelf operations across 65 countries, has already organized its
e!orts around two of the global goals. These include Goal 2 (“End hunger, achieve food security
and improved nutrition and promote sustainable agriculture”) and Goal 17 (“Strengthen the means
of implementation and revitalise the global partnership for sustainable development”).
Speci”cally, Olam’s e!orts to further these goals are in three areas: driving positive change in the
communities in which it operates through its supply chains; partnerships with key organizations,
including its customers, donor groups, and governments, that focus on sustainable development;
and knowledge sharing to create opportunities to extend the impact beyond Olam’s direct zone of
in$uence.

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For the exclusive use of A. Jean, 2021.

This document is authorized for use only by Alex Jean in SOS 509-1 taught by Jessica Morrison, Arizona State University from May 2021 to Nov 2021.

There are, of course, many challenges to a wider mobilization of private sector e!orts around the UN
global goals. One is that the UN-led exercise itself is too large and unfocused and loses momentum
because there are far too many goals and targets and too much fragmentation of e!ort, which makes
the task of coordination harder rather than easier.

But awareness of the challenges is the “rst step toward managing them. The UN global goals o!er a
new chance to bring global development issues to the surface. It also happens to o!er a powerful
mechanism to create multi-sector coordination on solving complex problems.

To my mind, the biggest risk with the project is if companies “nd it too lofty and too much of a “UN
initiative” – and decide not try at all.

Bhaskar Chakravorti is the Dean of Global Business at The Fletcher School at Tufts University and founding Executive
Director of Fletcher’s Institute for Business in the Global Context. He is the author of The Slow Pace of Fast Change.

$COPYRIGHT © !”#$ HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.

For the exclusive use of A. Jean, 2021.

This document is authorized for use only by Alex Jean in SOS 509-1 taught by Jessica Morrison, Arizona State University from May 2021 to Nov 2021.