3 ways businesses can help achieve the SDGs

The Millennium Development Goals (MDGs) have mobilized the most successful anti-poverty movement in history. Yet in 2016, we still find ourselves in a situation where millions of families have been left behind. With the launch of the new Sustainable Development Goals (SDGs), the international community has taken on an even more ambitious agenda to holistically address the unfinished work of the previous 15 years.

Despite a more complex and broad set of goals, health must remain front and centre if we are to truly accelerate progress. Health directly or indirectly underpins all 17 SDGs and is critical to promoting other favourable development outcomes, including economic growth and education.

Source: United Nations

Footing the bill

The UN estimates the new Global Goals will cost between $2-3 trillion (4% of global GDP), leaving a significant gap between available funding and the levels of investment required. The Lancet Commission on Global Health 2035 has suggested that low- and middle-income countries would need to spend at least $38 billion more per year on healthcare between 2016-25 and $53 billion more per year between 2026-35. The benefits would exceed the costs by a factor of about 20, including preventing 10 million deaths, reducing the under-5 mortality rate to 11 per 1,000 livebirths, and effectively ending both AIDS and tuberculosis-related deaths by 2035. However, slowing growth in China and the depressed commodity export market has put added pressure on emerging economies. Record levels of official development assistance in 2013 and 2014 were not enough to close this gap. With governments and international donors reluctant or unable to give more, the pressure is mounting on the private sector to play a more coordinated role in driving meaningful development.

Purpose-driven business

Thankfully, a number of companies are standing up to be counted. Over the past decade, the private sector has started to think more intentionally about how to maximize shareholder value by exploring the complex interplay between financial, human, social and environmental return. In­vestments in better training, healthcare and supply chain accountability have demonstrated direct financial return through gains in productivity and efficiency, while sup­port for social programmes has accelerated economic growth and raised incomes – creating a wider con­sumer base and easing entry into new markets. Terms like "shared value" and "triple bottom-line" are now commonplace in board rooms from Silicon Valley to Mumbai.

As a result, corporate social responsibility (CSR) is no longer conceived as a series of seemingly random feel-good grants, but as an essential tool that impacts a company’s philosophy and core business strategy including its brand value, market access and operations. Companies like Merck and Abbott, to name a few, have made big bets on the power of development partnerships to improve health outcomes in communities where they work and where they will increasingly work. Social impact programmes have helped purpose-driven companies in a variety of industries stand out from the pack and therefore be better positioned for growth.

The next step is understanding how to harness these social impact initiatives into a coordinated and targeted effort to achieve the aspirations of the SDGs. For starters, corporate programmes can extract maximum impact from each dollar by aligning themselves with national development strategies and channeling investments into accountable, scalable and cost-effective programmes. Innovative platforms can pool investments from small, medium and large companies, global and local, to grow the amount of capital flowing toward these programmes. To incentivize this collaboration, executives will need accurate data to demonstrate credible returns to shareholders, consumers and the communities they serve.

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Three essential elements are necessary to support this movement:

1. Alignment with the SDGs

The private sector has an opportunity to play a leading role in ensuring the aspirations of the SDGs are translated into measurable progress on the ground. This can be accomplished through:

For these investments to be truly sustainable, each must be aligned with national sector strategies and further progress towards achieving the full scope of the SDGs.

2. Cooperation across sectors and geographies

Shared value emphasizes the importance of companies developing local clusters of partners (for-profit suppliers, non-profits, local governments, trade unions, universities) to forge more open and transparent markets – facilitating smoother business operations and creating a virtuous cycle of localized economic growth and social development. The notion of shared value should be expanded to harness greater cross-sector collaboration moving beyond local clusters to a national or even regional cluster approach. Health companies can lead the way by working together to promote mutually beneficial improvements in health outcomes in competitive markets, but all companies, regardless of product or service, can contribute through innovation and smart investments.

3. Measurement and accountability

If nothing else, the MDG experience demonstrated that the effective use of data can inspire political action, stimulate investment and drive significant development outcomes. Yet large data gaps remain particularly in relation to uncounted, vulnerable groups. The private sector can take the lead by applying rigorous business measurement standards to their social programmes and collaborate closely with governments, civil society and communities to collect data in real time. Development partnerships that measure inputs as well as outcomes can engender an ecosystem of accountability – provided indicators are clear, feedback loops exist and results are disseminated broadly.

Additionally, performance-based payment, a notion appropriated initially from the private sector, is fast becoming a popular method for incentivizing behaviour change and emphasizing results in development programmes. Performance-based payment can effectively promote better results by making payment contingent on the completion, measurement and verification of results. The World Bank has had some success using results-based financing to focus public sector programmes on specific priority indicators. This philosophy is expressed most fully in the creation and launch of the Global Financing Facility (GFF) in Support of Every Woman, Every Child. The GFF is a clear example of an innovative platform for donors to come together to incentivize governments to focus on reproductive, maternal, newborn, child and adolescent health issues through results-based payment. When well-designed, performance incentives have demonstrated success at achieving improved health outcomes.

A partnership for meaningful and accountable development

Each of these elements will contribute to the creation of a development partnership that is aligned, cooperative and accountable. Still, there remains a need for neutral platforms to nurture this collective action. A few are showing early promise:

Every Woman, Every Child and the Partnership for Maternal, Newborn and Child Health are platforms created by the UN and WHO respectively for partners of different constituencies to work together, particularly at the policy level, to strengthen advocacy efforts and improve performance measurement.

The Health Credit Exchange (HCX), is a fund that aggregates private sector contributions and pays providers for the achievement of specific performance-based outcomes. Through the HCX, local and global companies can co-invest in credible and innovative health and wellness programmes to drive better outcomes for communities.

Also, the Power of Nutrition Fund channels donor and private sector contributions to implementing partner programmes in 5-10 countries focused on nutrition during the thousand-day window.

These platforms, and others in development, recognize that the actions of governments and civil society alone will not be sufficient to achieve the SDGs. The private sector has an opportunity to work collaboratively to catalyse improvements across health systems, yielding unprecedented returns in both economic and human capital, and fulfilling the promise of a more equitable, productive, and prosperous global community.