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Making the case for engaging private sector in SDGs

Ashfaqul Chowdhury | December 11, 2018 00:00:00

Workers are busy at a private textile mill: Private sector is the main driver of the economy. — FE Photo

Sustainable Development Goal or SDGs are the buzzword that reverberates around the development sector these days. From halls of the United Nations to the newspapers sold in local buses- all of them have something to discuss any of the 17 goals. However, except for generating interest, there is essentially nothing extraordinary about these goals. Private corporations set targets themselves all the time. Since the introduction of Millennium Development Goals (MDGs), the UN has been taking a similar approach and SDGs embody the goals and targets it has set for itself with year 2030 as a deadline. These goals have two important properties: Ubiquity and ambition. SDGs are ubiquitous as they are applicable to both developed and developing countries and touch almost every aspect relevant to development discourse. For example, goals like affordable and clean energy (goal 7), sustainable cities (goal 11), climate action (goal 13), etc. are as much about developed countries as they are about developing countries. This is an important differentiating factor between SDGs and MDGs. MDGs focused on developing countries only. In terms of ambition, let us just look at goal 1. Sustainable Development Goal 1 is a vision of a world entirely free from poverty: no poverty, anywhere. In contrast, MDGs were supposed to halve the rate of poverty. In many ways, MDGs were halfway goals while SDGs are about finishing the job.

An important aspect of the SDGs is that the UN or the development sector is not supposed to achieve these goals by itself. The goals are also for the partners- global governance regime (governments), multilateral institutions like the World Bank and the IMF and the third sector that includes civil societies and NGOs. But perhaps the most important cog in development is not the government or the complex net of NGOs and INGOs but something we almost never associate with it-the private sector. Seen as profit makers and not social changers, it is actually the private sector which has the means to spark the greatest social changes. We can just look at Bangladeshi mobile operators or bKash to see how instrumental the private sector has been in transforming the society.

Given the impact of the private sector in almost any economy today, it is indeed a classic case of head in the sand if the UN thinks it can achieve the SDGs without actively partnering with the them. The wheel of growth runs on the private sector impetus and if they are not on board then economic growth and sustainable development will remain as estranged as they now are in many parts of the world.

Unfortunately, partnering with the private sector to implement SDGs is easier said than done. The problem is quite straightforward, if not most businesses look at SDGs as a hindrance. For example, responsible production (SDG 12) can impose extra costs on sourcing materials and also hamper long established supply chain relationship. Affordable and clean energy (SDG 7) is seen as an enemy by the traditional energy sector and myriad upstream and downstream companies associated with this industry. Some of the biggest or most influential global companies like Foxconn, a company infamous for labor abuses in their iPhone making factories, or BP, still leaking wounds from the Deepwater Horizon saga, would not embrace SDGs with open arms. But it is important to realise that not everyone is a BP or a Foxconn. There are companies who protect the environment rather than harming it. And then there are companies who make business out of developing the society and environment around them.

Let us look at an up-and-coming company named AlterYouth. This is still a small company with ambitious but achievable objectives. Their business goal is to eradicate illiteracy from Bangladesh. They believe the biggest challenge in our primary education system is dropouts. Some 98 per cent of all children start school but 19 per cent of them (around 2 million) drop out before the PSC exams. This is because poorer families feel that these kids will be more useful if they can earn 500-600 taka per month by working as child labourers. On the other hand, there are at least 10 million people in Bangladesh to whom a thousand taka is not that much. AlterYouth connects these people at the higher rungs of society with poor families via a web application: A Consumer2Consumer Scholarship Platform. At AlterYouth you can sponsor a child's education for only 950 taka per month. Tk 800 is paid to the child via mobile banking as an incentive to stay in school while the rest is used for operational expenses, including buying a mobile phone for the child's parents so that you can directly communicate with them. AlterYouth is quickly graduating with success from a pilot phase with successful companies like Grameenphone already a shareholder of the company. It is fair to say that every taka earned by AlterYouth takes the country a bit further towards achieving SDG 4 on education.

Talking about a more common example, bKash now handles 4.5 million (Fortune report) transactions each day facilitating financial transformation for people without bank accounts. This is a huge achievement in terms SDG 1 (No Poverty) and 10 (Reducing Inequality). And there are plenty others who integrate sustainable practices in their business- garments factories who don't pollute the environment and pay workers regularly, agribusinesses who train farmers on the proper use of fertilisers or a soap maker who raises awareness about handwash are all benevolent sponsors of SDGs agenda even when they are making profit. Sadly though, these businesses are not always in a level-playing field with those who conduct their business unethically. A factory that dumps their waste into nearby river spends less in the short-run than a factory with proper waste management. The development sector should work in a way that the ethical business receive enough value for their environmental awareness and remain competitive against their unethical competitors.

The biggest agents of change are the private sector and they should receive support in form of funds, capacity development, policy and advocacy support etc so that they can survive and thrive competing against unethical businesses. In a world as capitalistic as this, SDGs will only is a buzzword until capital is not engaged in development. The purpose of this article is to tell that capital, or businesses per se, is already is engaged in development- it is not just mainstream yet.

It is reassuring to see that the development sector has begun to take note of this and has started programmes to encourage responsible business. The UNDP provides international recognition and branding support to responsible businesses while also helping in impact measurement. They also support SDG-aligned startups by providing training on financial management and marketing. SNV Netherlands works with insurance companies to provide low-cost insurance to garments workers. UK Aid provides seed funding to financially inclusive products. However, a lot still needs to be done- till today our garments factories struggle to earn 1.0 per cent more for all their sustainability efforts. The development sector must work on these issues so that SDG aligned businesses and sustainability efforts in general are recognized and rewarded. Providing responsible businesses a competitive edge now will make responsible business the new mainstream in future. And that will go longer in achieving SDGs more than anything else.


Ashfaqul Chowdhury is a Development Consultant.

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