Sustainable Business Can Unlock at Least US$12 Trillion
in New Market Value and Repair Economic System

New report shows next decade critical for companies to open 60 key market “hot spots,” tackle social, environmental challenges, and re-build trust with society.

A Laotian smallholder farmer waters her crops. (Photo credit: Flickr / Asian Development Bank)

More than 35 CEOs and civil society leaders of the Business & Sustainable Development Commission (the Commission) have stated that sustainable business models could open economic opportunities worth at least US$12 trillion and up to 380 million jobs by 2030. In the Food & Agriculture sector, this could amount to opportunities worth nearly US$2.3 trillion and 80 million jobs.

According to the Commission, putting the Sustainable Development Goals (SDGs), or Global Goals, at the heart of the world’s economic strategy could unleash a step-change in growth and productivity, with an investment boom in sustainable infrastructure as a critical driver. However, this will not happen without radical change in the business and investment community. Real leadership is needed for the private sector to become a trusted partner in working with government and civil society to fix the economy.

In its flagship report Better Business, Better World, the Commission recognises that while the last few decades have lifted hundreds of millions out of poverty, they have also led to unequal growth, increasing job insecurity, ever more debt and ever greater environmental risks. This mix has fueled an anti-globalisation reaction in many countries, with business and financial interests seen as central to the problem, and is undermining the long-term economic growth that the world needs. The Commission has spent the last year exploring a central question, “What will it take for business to be central to building a sustainable market economy – one that can help to deliver the Global Goals?” Better Business, Better World, the release of which was timed with the World Economic Forum (WEF) in Davos and the U.S. presidential inauguration, shows how.

“This report is a call to action to business leaders. We are on the edge and business as usual will drive more political opposition and land us with an economy that simply doesn't work for enough people. We have to switch tracks to a business model that works for a new kind of inclusive growth,” said Mark Malloch-Brown, chair of the Business & Sustainable Development Commission. “Better Business, Better World shows there is a compelling incentive for why the latter isn’t just good for the environment and society; it makes good business sense.”

At the heart of the Commission’s argument are the Global Goals – 17 objectives to eliminate poverty, improve education and health outcomes, create better jobs and tackle key environmental challenges by 2030. The Commission believes the Global Goals provide the private sector with a new growth strategy that opens valuable market opportunities while creating a world that is both sustainable and inclusive. And the potential rewards for doing so are significant.

The report reveals that 60 sustainable and inclusive market “hotspots” in just four key economic areas could create at least US$12 trillion, worth over 10 per cent of today’s Gross Domestic Product (GDP). The breakdown of the four areas and their potential values are: Energy, US$4.3 trillion; Cities, US$3.7 trillion; Food & Agriculture, US$2.3 trillion; and Health & Well-being, US$1.8 trillion.

Dr Fraser Thomson, Director of Singapore-based AlphaBeta, who conducted the research for the food and agriculture component of the report, said that 14 opportunities in food, including food waste, farming technology and low-income food markets could be worth collectively over $2.3 trillion annually by 2030.
“More than two-thirds of the value of identified opportunities is concentrated in developing countries, reflecting both the large share of arable land in these countries, the high future consumption growth, and the large potential upside in efficiency gains,” Dr Thomson said.

“Not only are the economic opportunities significant for developing countries, but the jobs potential associated with these opportunities is also large. The identified SDG-related business opportunities could create almost 80 million jobs by 2030. Over 90 per cent of the potential job creation is located in developing countries. That includes roughly 15 million jobs in developing Asia, 21 million jobs in Africa, and 22 million jobs in India. Given substitution effects, not all of these jobs will translate to net increases in employment.”

“There are also significant potential benefits to food security, poverty alleviation, climate change, mitigation, waste reduction and health outcomes. For example, reduced malnutrition and undernutrition through improved food access would have significant benefits for health & well-being – poor nutrition is responsible for 45 per cent of deaths in children under 5. The world’s 1.5 billion smallholder farmers have the highest incidence of poverty amongst all sectors of the global economy. Better technology in smallholder farming through aggregation, extension services, access to capital and other levers could increase yields and productivity, which would lower poverty rates. Halting all deforestation and reversing forest degradation could mitigate up to 10 per cent of total emissions globally by 2030,” he added.

Speaking about the opportunity, specifically in terms of the Asian region, Dr Thomson said, “The importance of individual opportunities also varies by region, with stark differences between developed and developing countries. In developing Asia, the largest opportunity is related to reducing food waste in the value chain. In developed Asia, the largest opportunity is in reducing end consumer waste, reflecting the higher incomes and greater food consumption and wastage in these markets. Other major opportunities in Asia include product reformulation (to make food products healthier for consumers), new offerings to serve low-income consumers, and reduction of packaging waste.”

While the opportunities are compelling, the Business Commission makes it clear that two critical conditions must be met to build these new markets. First, innovative financing from both private and public sources will be needed to unlock the US$2.4 trillion required annually to achieve the Global Goals.

At the same time, the Commission believes that a “new social contract” between business, government and society is essential to defining the role of business in a new, fairer economy. The recently released 2017 Edelman Trust Barometer reinforces this idea. It shows that while CEO credibility is sharply down, 75 per cent of general population respondents agree that “a company can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates.” And they can do so in ways that align with recommendations and actions outlined in Better Business, Better World: rebuilding trust by creating decent jobs, rewarding workers fairly, investing in the local community and paying a fair share of taxes.

Throughout 2017, the Commission will focus on working with companies to strengthen corporate alignment with the Global Goals, including mentoring the next generation of sustainable development leaders; creating sectorial roadmaps and league tables that rank corporate performance against the Global Goals; and supporting measures to unlock blended finance for sustainable infrastructure investment.

“The Global Goals provide a sustainable, profitable growth model for business, and have the potential to trigger a new competitive ‘race to the top,’” said Jeremy Oppenheim, Programme Director of the Commission. “The faster CEOs and boards make the Global Goals their business goals, the better off the world and their companies will be.”

The Business and Sustainable Development Commission was launched at the World Economic Forum (WEF) in Davos in January 2016. It brings together leaders from business, finance, civil society, labour and international organisations, with the twin aims of mapping the economic prize that could be available to companies if the Global Goals are achieved, and describing how they can contribute to achieving them. To access the report, visit Better Business, Better World launch events were held throughout the week of 16 January 2017, first at the Philanthropreneurship Forum in Vienna, then at the WEF in Davos. Regional events were also scheduled.

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