Opinion: Transforming Globalisation

Colourful Market Tents Thailand

A version of this op-ed appeared in the Global Environment Facility Hub on The Guardian website.

Mid 2016 may be remembered as the summer of globalisation’s discontent, one that has arguably been decades in the making. Though it helped bring about a golden era of growth, trade, and foreign direct investment, globalisation has not benefited society equitably, and it has forged ahead at calamitous expense to the environment.

On the upside, extreme poverty declined by more than 50% from 1990 to 2015. But the chasm between rich and poor is widening. Oxfam reports that the combined wealth of the richest 1% will overtake the remaining 99% of humanity by the close of this year. Climate change will only exacerbate this perverse inequality. Unabated, it threatens to push more than 100 million additional people into poverty by 2030.

Against this backdrop, the global economy is facing strong headwinds: stagnating wages, stuttering growth and job creation, decreasing trade and cross-border capital flows, and increasing environmental impacts. There is also the enormous task of creating 600m new jobs in the next 15 years to absorb a growing global workforce.

All this has led to a perfect storm that has heightened social and economic uncertainty, and (in some places) instability. We urgently need a new kind of globalisation—one that brings billions more people to sup at its table, rather than just the elite few, and ensures future environmental abundance.

The Importance of the Global Goals

The Business and Sustainable Development Commission (BSDC), launched in January 2016, was founded on the belief that the Sustainable Development Goals are the world’s roadmap to a more inclusive globalisation that ensures no one is sidelined by economic progress. Backed by 193 countries, the Global Goals, as they are popularly known, consist of 17 objectives for ending poverty, closing the gap on inequality, effectively tackling climate change and protecting our finite resources by 2030.

The dominant perception is that the responsibility for achieving these ambitious objectives rests with government alone. This is a fallacy. It will take government, business and society working in concert to achieve the transition. And, in truth, it will particularly require the capital, innovation and capacity that only the private sector can unleash. What we need— and urgently—is a radical shift in perception by the private sector to view the global goals as the greatest economic opportunity any generation has had, rather than a burden and constraint to growth.

The Business Commission’s core purpose is to achieve this shift by making a compelling case for the private sector to put the Global Goals at the heart of its business, and thus accelerate the world’s transition to sustainable and inclusive markets. As part of our argument, our flagship report—to be launched in January 2017—will quantify the economic value of achieving the goals. Our early findings show that pursuing innovative, sustainable business models could unleash trillions of dollars in new opportunities across four key systems—food and agriculture, cities and mobility, energy and materials, and health and wellbeing—alone.

Change is already underway. Companies are spawning ground-breaking innovations and new ways of operating—and not just the innovative newcomers that we call global disruptors, or their local counterparts. Some long-established companies like Unilever—whose CEO, Paul Polman, is a founding member of the Commission—are also leading the charge. By shunning short-term goals, which prioritise immediate profit over creating shared value, these radical incumbents are benefiting from their focus on sustainability. Indeed, Unilever’s sustainable living brands are growing 30% faster than the rest of its business, and delivered nearly half of its total growth in 2015.

A United Approach

But these companies remain the exception. Our commissioners—representing major multinational corporations as well as civil society—have joined the Business Commission because they believe the world can achieve the goals with a critical mass of CEOs, investors and entrepreneurs who see these challenges as opportunities of substantial value.

New financing approaches will be needed to bridge the estimated $2-3tn annual funding gap required to fulfil the Goals. This will involve a combination of new financial models, and investors who recognise both the risk of social and environmental externalities affecting asset values, and the higher, long-term returns generated by strong environmental and social performance.

Unless the private sector earns the social license it needs to unlock these new opportunities, the global goals risk being remembered as just good intentions. The essential foundation is for business and government to gain trust with society. This will require business to relinquish short-term thinking and the relentless drive for profit without purpose—and to engage with government and society in an entirely new way through a social contract that reinforces all of their abilities to thrive.

The sustainable development agenda is about better markets and better government. The Business Commission argues that business, government, and society can work together to ensure a fair transition to stem the tide of global turbulence and instability, and to bring the market shift that is already underway to both speed and scale. Together they can encourage environments that foster new enterprise and employment, do more to support small- and medium-sized enterprises, and create policies that provide greater economic security for everyone, particularly the most vulnerable.

The Business Commission’s ultimate goal is to create the sea change needed to make sustainable development the new business norm. Our commissioners represent a number of industries, but they are just the start of what we hope will be a business-led movement that will help to transform the private sector and achieve the Global Goals by 2030.