Since the launch of the UN’s Millennium Development Goals 15 years ago, the relationship between companies and the communities where they operate has evolved considerably. Many corporations who once viewed contributions to society as good citizenship now view such activities as central to business success.
Today, companies are increasingly finding inspiration for new products, supply-chain partners, operational models, and workforce talent by aligning their business with social good. The emergence of rankings like Fortune Magazine’s Change the World List is evidence of just how quickly companies creating shared value—generating profit by creating positive social impact—are bounding into the mainstream.
The Sustainable Development Goals (SDGs), which will guide sustainability and development for the next 15 years, present business with an opportunity to play a role in development like never before, in essence, competing to change the world for the better. But will they? Most corporate executives still believe development is the responsibility of the public sector and aid organizations, with the private sector playing a supporting philanthropic role. Likewise, many in the UN and development community still view corporations primarily as donors or sponsors.
Yet, an emerging cohort of companies sees the challenges captured by the SDGs—climate change, world hunger, gender inequality, and more—as business opportunities, and aid agencies, governments and international nonprofits as business partners. Private-sector leaders in this cohort see many of the SDGs as relevant, profitable, and a source of competitive advantage. Indeed, many exemplary partnerships are emerging. The examples below illustrate how companies are working with partners to address these big global issues while creating business opportunities.
GOAL 2: End hunger and achieve food security and improved nutrition with sustainable agriculture.
In the food and beverage industry, business success usually depends on the harvest of local farmers. In rural areas, impoverished farmers often lack the resources, technology, and training to grow a quality product. For example, TechnoServe, an international NGO, has been instrumental in many multi-sector partnerships that not only address this societal need, but also result in more productive crop yields and better raw material for global supply chains.
Project Nurture, a partnership among TechnoServe, Coca-Cola, and the Bill & Melinda Gates Foundation helps fruit farmers access new markets in East Africa. With Gates’ funding and TechnoServe’s critical assistance on the ground, Coca-Cola can ensure a more stable and high-quality value chain by improving smallholder farmer production and technical knowledge in the region. In this pilot project, two local processors have met Coca-Cola’s quality standards as suppliers so the company can locally source fruit puree for its Minute Maid Mango product specifically designed for the East African market.
One of the largest coffee purchasers in the world, Nespresso has worked in long-term partnership with TechnoServe to revive high-quality coffee production in Colombia and South Sudan. Jean-Marc Duvoisin, Nespresso’s CEO believes partnership has been critical to the company’s success in these areas. “Our AAA Program itself is an example of an innovative approach to creating shared value for farmers and consumers,” said Duvoisin. “This unique direct-from-farmer sourcing model, combining quality, sustainability and productivity principles,” he explained, “has resulted in better coffee quality, better environmental conditions, better social conditions, and even higher income for farmers.”
GOAL 3: Ensure healthy lives and promote wellbeing for all at all ages.
For companies in the health industry, shared value is already integral to the business of making people healthy. But some companies have been intentional in promoting well-being in rural markets previously untouched by their business. Their ability to implement shared value strategies would not be possible without the involvement of nonprofits, philanthropy, and other private-sector partners.
In East Africa, GSK has embarked on an ambitious long-term global partnership with Save the Children to “help save the lives of one million children” by 2017. GSK’s work with various partners has so far helped train 25,000 frontline health workers, who collectively reach 6.5 million people. The hope is that this partnership model sets the standard for the industry. Simon Wright, Head of Child Survival at Save the Children, is hopeful about how GSK’s commitment will motivate others to do the same.
“If GSK can persuade the rest of the pharmaceutical industry to follow its lead,” said Wright, “We hope to help save even more children’s lives.”
Discovery Ltd, the South Africa-based global insurance company, has recognized that incentivizing healthy behavior among members and communities is good for the bottom line, and has now scaled its successful programs around the world. Through its foundation, the Vitality Institute, they are now taking this message to employers and cities with data on community health risks in a report funded by the Robert Wood Johnson Foundation, the US-based philanthropic foundation. Discovery is partnering with pharmaceutical companies, clients, employers, and even other insurers, to better manage risks and costs of healthcare, adding value throughout the system.
A host of other examples demonstrate the point further. Unilever partners with CARE, the State Bank of India, and other companies, to empower women micro-entrepreneurs in South Asia, the Middle East and North Africa (GOAL 5: Empower all women and girls). Barclays, Plan, CARE, and Grameen Bank are working to extend access to basic financial services for the unbanked (GOAL 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all). Arup, Rockefeller Foundation, and countless other private, philanthropic and public partners are working together to build resilience of cities to better prepare for and adapt to the impacts of climate change (GOAL 11: Make cities and human settlements inclusive, safe, resilient and sustainable)
Companies are not supplanting the role of traditional donors and aid organization, but rather demonstrating that collaboration and cross-sector integration can yield more sustainable (and often better) results. Working together across organizational and sector lines, each partner—corporate, nonprofit, and government alike—plays an essential role in achieving a shared goal.
Nonprofits and governments are also recognizing the need to engage in partnerships that create shared value and are increasingly positioning themselves as business partners. Fifteen of the largest international NGOs, including Save the Children, PATH and MercyCorps, have recently formed a community of practice to learn from one another and evolve their business model. Government is catching on too: This month, Australia’s Department of Foreign Affairs and Trade (DFAT) has publicly and financially committed to engaging in shared value partnerships with the private sector.
Companies are now have a unique opportunity to create transformational impact for both the world and their business. Will they? And will their partners get on board? It is encouraging that the UN Global Compact and KPMG have recently published recommendations intended to help companies view the shared value opportunities in each of the goals. This inspiration is certainly a start, but, as with most things, it still requires the perspiration of actually getting the job done. Implementing these forward-thinking, innovative ideas to tackle the SDGs will take the daily grind of intentional tri-sector partnerships. But as we can see from the success stories at large companies such as Nespresso, GSK, and more, those hard-won results just might be enough to change the world.
Photo from Nicolas Raymond.
Ellen Martin, Associate Director, Partnerships, Shared Value Initiative, is responsible for managing consulting affiliate member services, providing training, knowledge management, and other support to the Initiative's consulting affiliate network.