NEW YORK CITY — The 17 Sustainable Development Goals (SDGs) call upon governments and businesses to promote measures that deliver universal peace and prosperity. Private sector involvement in achieving the SDGs is imperative, as businesses can offer both financing and flexibility in enacting the goals. More than 9,000 companies globally have already signed the U.N. Global Compact — a list of 10 principles that encourage sustainable business behaviour.
The SDGs are good for business
The Sustainable Development Goals benefit business — adherence to the goals increases corporate security and resilience. Companies that align with the national interest are more likely to receive license to operate.
Businesses whose operations are at odds with state priorities will face a competitive disadvantage in the marketplace. Furthermore, companies that already align with the SDGs are more likely to have business plans that fit with new government regulations. As national policy changes to meet the Global Goals, businesses will be forced to adapt operations — the ones who already work toward the SDGs will be better positioned for this change.
Realization of the SDGs will require an estimated $2.4 trillion a year in additional investment, particularly in infrastructure. Fortunately, private sector participation is encouraged by customers — a PwC study found that 78 percent of consumers are more likely to buy from businesses that have signed up to the SDGs. Thus, when adopted, the Sustainable Development Goals benefit business by increasing the desirability of a company’s products to socially-conscious consumers.
The SDGs are a $12 trillion opportunity
According to a Better Business, Better World report, the SDGs have the potential to create $12 trillion in profits for the private sector by 2030. Growth opportunities are concentrated into four categories — food and agriculture, energy and materials, cities and health and well-being.
Opportunities for innovative growth in the agricultural sector have an estimated value of $2.3 trillion. One growth area — reducing food waste — could add $155-405 billion to the global economy by 2030. Between 20 and 30 percent of food produced today is wasted. Investment in simple technologies like metal silos for storage could mitigate this problem.
Energy costs are expected to rise in the future due to increased regulation to reduce the environmental impact of energy harvesting, as well as increased demand as more people join the higher energy-consuming income brackets. Thus, some of the greatest potential profits for private businesses lies within circular model production.
Circular models reduce production because goods are refurbished and remain in use for longer. Investing in circular models in two industries — automotive and appliance — could create $475-810 billion and $305-525 billion, respectively. To capture these profits, businesses can switch from selling to leasing products.
Meeting the SDGs in city-related industries could create an additional $3.7 trillion. As city populations grow, the need for affordable housing will rise. Shrinking availability of urban space means developers will need to implement creative space utilization. Providers that overcome these building challenges could net $650-1,080 billion; affordable housing development could potentially create 70 million new jobs.
Healthcare access is limited in developing countries and many of the emerging potential profits in this industry reflect a movement to expand basic medical care to underserved populations. Remote patient monitoring offers a potential $300-440 billion in profits. The McKinsey Global Institute estimates that remote patient monitoring could stimulate a 10 to 20 percent decrease in the cost of treating chronic illnesses by 2025. An example of a new innovation in this field is the introduction of a platform that allow diabetics to monitor their glucose levels with their smartphones.
Achieving the SDGs in these four industries could stimulate creation of 380 million new jobs by 2030, with almost 90 percent of these jobs located in developing countries.
Ultimately, growth from the SDGs could surpass the estimated $12 trillion. The Sustainable Development Goals benefit business by fostering a healthy, more productive labor force and by raising the purchasing power of citizens in developing countries. These two factors hold potential profits far beyond those found in any single industry.
Business is becoming more involved
Barriers like strict regulation and inefficient public-private collaboration currently prevents businesses from engaging fully with the SDGs. However, 71 percent of businesses surveyed by PwC are developing plans to engage with the Global Goals. Though 22 percent of surveyed businesses said they had no engagement plan today, only 4 percent answered that they would still not have a plan in 5 years.
Fortunately, there are strong market incentives for the private sector to increase its engagement. The Sustainable Development Goals benefit business — the Global Goals offer a tangible opportunity to businesses to increase their profits while working toward the greater good.
– Katherine Parks