Engaging private sector in SDGs

Author: Ali M Jadoon

In 2015, the United Nations General Assembly presented the Sustainable Development Goals (SDGs), a set of 17 global goals, along with 169 associated targets to achieve by 2030. These post-2015 development agendas have goals of tackling poverty, bringing sustainable environmental changes and promoting peace and prosperity. SDGs differ from the Millennium Development Goals (MDGs) in two ways; firstly, SDGs inculcate new development areas, such as economic equality, innovation, sustainable consumption, climate change, peace and justice along with many other priority areas.

These goals and targets are multidimensional; success of one usually leads to other. Secondly, the UN adopted an inclusive approach, which was neglected in MDGs. For example, the rationale of SDG goal number seventeen is to build strong partnership for achieving goals. In order to achieve that, a government partners with other development sectors, including philanthropic organisations, civil society organisations (CSOs), businesses, academia, and media, to achieve sustainable outcomes.

In SDGs, a special emphasis was given to private sector involvement in the development arena that was largely neglected in MDGs. That significance was also highlighted in 2015Addis Ababa Action Agenda, which is the International Conference on Financing for Development. It stated: “Private business activity, investment and innovation are major drivers of productivity, inclusive economic growth and job creation. We call on all businesses in solving sustainable development challenges. We invite them to engage as partners in the development process, to invest in areas critical to sustainable development.”

Involvement of private sector benefits a country’s development programmes in several ways. Firstly, it helps in mitigating the environmental hazard and risk of industries. Secondly, it increases corporate understanding on subjects of economic equality, job creation, climate change and their role in social development. Thirdly, it assists government in financing socioeconomic development activities. Fourthly, private sector promotes activities of economic growth and development through public-private partnerships and helps in achieving targets of SDGs.

Private sector has a pivotal role in the economic growth and economic development, but it needs government support in building an effective policy that helps in enhancing a business environment. In this way, benefits of private sector growth reach citizens. Private sector is the engine of growth, creating jobs, paying taxes, reducing inequality, fostering innovation, and building infrastructure.

Along with many other economic benefits, private sector has the social side of contribution through its corporate social responsibility (CSR) programmes. Through CSR, companies’ contributions are in billions on different social development projects, including health, education, women empowerment, gender equality, sports and youth affairs.

Private sector also supports government initiatives that have large-scale public benefits -supporting government work during times of disaster (floods, earthquake), and in times of need (fundraising for Diamer-Bhasha Dam).

Private sector is the engine of growth, creating jobs, paying taxes, reducing inequality, fostering innovation, and building infrastructure

In Pakistan, the private sector actively participated in community development. It has increased its contribution by 33 times since 2000, but these contributions could be further enhanced and promoted through better policy actions. The publicly listed companies (PLCs) have the highest share of corporate giving, although it has less than one percent share in the entire corporate composition. Despite all the prevailing challenges, the contribution of PLCs in socio-development are massive-Rs7.5 billion in 2017. But their impact has yet to be explored. In 2017, a PCP research report mapped the corporate sector philanthropy, along with SDGs, in order to understand the CSR programme alignment towards international goals. A survey-based activity was conducted; only 32 percent companies responded. That showed companies’ lack of interest and motivation towards building effective policy actions. Although these 32 percent contributed around 68 percent in the total giving (Rs. 5.1 billion), which is significant in terms of coverage by total giving. It is interesting to note here that the top 25 PLCs by volume contributed 80 percent, while the remaining441 companies have 20 percent share on annual corporate philanthropy.

The survey assessed the corporate awareness on two levels, firstly, at organisational level, and secondly, at management level within the organisation. Encouragingly, an overwhelming majority (62 percent) of companies are aware about SDGs. The percentage could be a bit on the higher side given the fact that the sampled companies were bigger and operate nationwide.

Regarding awareness within an organisation, 55 percent of top management was aware of the SDGs. On the other hand, SDGs are not well understood at middle management level, and even within CSR teams. Just 17 percent of CSR teams were aware of SDGs. The response emphasised creating more awareness about SDGs. A team not well versed with the goals can do little to achieve.

Interestingly, an overwhelming majority of survey respondents agreed that the corporate sector has a huge role in achieving SGDs. This is an encouraging finding and hints towards a huge potential that can be tapped into if the corporate sector is motivated and encouraged to effectively contribute towards social development.

The other factor to highlight is to understand the practical alignment of CSR programmes with SDGs. Around 55 percent of companies inadvertently fall towards SDGs, while the remaining still have to act. Showing understanding and following SDGs are two different aspects that need to be promoted accordingly. Apparently, there was a strong correlation of 0.53 between two variables meaning that higher the level of awareness at top management better the alignment towards SDGs.

It is worth noting that the goal number three (Good Health and Wellbeing), and goal number four (Quality Education) has the highest share of corporate contribution from the total giving, which is twenty-eight (Rs. 1.4 billion) and forty-one percent (Rs. 2.1 billion), benefitting approximately twenty-two and two percent of the population respectively.

The role of business sector, which has traditionally been considered as an engine of economic growth, is multiplied when it is accepted to be an important partner in achieving the inclusive growth agenda in the form of SDGs. The corporate sector has enormous potential to be tapped to bring in more effective and sustainable changes. Governments of developing countries could utilise these potential resources through effective policy actions. The public-private partnership could be an effective tool to promote the development agenda.

The writer is Programme Officer-Research at the Pakistan Centre for Philanthropy

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