SESSION NOTE

Contributing to the Sustainable Development Goals
through responsible business conduct
30 June 2017 - 11:30-13:00
Room CC5 - OECD Conference Centre

The 2030 Agenda for Sustainable Development and the 17 Sustainable Development Goals (SDGs) require
action by all and imply a more robust role for the private sector in global development than has traditionally been thecase. Investment needs for achieving the SDGs are in trillions of dollars and mobilising the private sector will be a
crucial element of their success. Stronger partnerships between the private and public sectors can be mutuallybeneficial in numerous ways. However, alignment between commercial and public objectives is not a given. Economic
activity, be it by private businesses or governments as economic actors, does not by itself necessarily nor
automatically lead to the realisation of broader development outcomes that the SDGs target. For example, the wealthcreated in the past few decades has lifted millions out of poverty, but it is also a fact that income inequality in OECD1
countries is at its highest level for the past half century or that almost 21 million people are in forced labour2according to the ILO, generating billions in illegal profits for a few.
Maximising the contribution of the private sector for theSDGs in practice has to take into account different contexts, andsometimes competing demands, that businesses face on a daily
basis. The purpose of this session is to discuss how ongoing efforts
by businesses, governments, and stakeholders to implement
responsible business conduct (RBC) standards could be atransformative, but is - so far – an under-utilised way for businesses
to interact with the SDGs and ultimately maximise theircontribution to the SDGs.
RBC means that all businesses – regardless of their legal
status, size, ownership structure, sector, or location – are expected
to avoid and address adverse impacts of their operations, while
contributing to sustainable development in the contexts where theyoperate. This encompasses impacts beyond the company itself andentails integrating and considering environmental and social issues
within core business activities, including in the supply chain and3business relationships. These expectations are reflected in themain international standards on RBC - like the OECD Guidelines forMultinational Enterprises (OECD Guidelines), the UN Guiding
Principles for Business and Human Rights (UN Guiding Principles),and the fundamental ILO Conventions - and increasingly ininternational trade and investment agreements and national
development strategies, laws, and regulations. It is also widely
recognised that governments have a crucial role in promoting andenabling RBC. A key tool for RBC is risk-based due diligence. Due
diligence is a process through which businesses identify, preventand mitigate their actual and potential negative impacts andBOX. CHALLENGES FOR ACHIEVINGTHE SDGS – SOCIAL LENS

780 million people are not earning
enough to escape poverty; global
unemployment expected to rise in 2017



40 million new jobs needed each year
until 2030 to keep pace with growth in
the global working age population

Only half of women are in the labour
force globally and earn on average 23%
less than men



21 million people are estimated to be inforced labour, more than 11 million are
women and girls, generating over $150
billion in illegal profits per yearPoor occupational safety and healthpractices cost 4% of global GDP eachyear. 317 million accidents occur on thejob annually; many of these resulting in
extended absences from work. 2.3
million people die per year as a result ofoccupational accidents or work-relateddiseases.

Source: Shift, UNCTAD, and ILO

account for how those impacts are addressed. It is systematic, risk-based, responsive, evolving and appropriate to acompany’s circumstances, with stakeholder engagement built-in throughout the process.
RBC can ensure that the SDGs are not undermined and that the framework for positive contributions to theSDGs is based on respect for the people and the planet. RBC is not just about compliance. RBC can help achieve theSDGs by:Being actionable now: Recent surveys show that businesses are not yet clear on how to take the SDGs
from paper to practice. Some are set to “cherry-pick” them and potentially ignore others that don’t fit
4business priorities, or to “repackage” existing initiatives. RBC is a practical option for companies to start
contributing to the SDGs now. When businesses deal with their impacts on planet and people in a systematic
5way based on RBC standards, they can deliver a positive contribution against multiple SDGs.

Maximising impact: RBC standards apply to all businesses, across all sectors and all ownership structures.
This also includes commercial activity by governments as economic actors (e.g. procurement, state-ownedenterprises, export credits, sovereign wealth funds, and development finance), financial institutions, and nonprofit organisations and associations. Additionally, many challenges cannot be addressed by companies orgovernments alone. Collective action to advance RBC – across industries and with governments and otherstakeholders – can be the most effective way to create change, contributing at scale to multiple SDG targets.

Including strong supply chain component: The expectation that businesses consider impacts in their
supply chains and throughout their business relationships is a central feature of the OECD Guidelines and UN
Guiding Principles. The people most exposed to negative impacts of business operations in the supply chain
are typically the poorest and most vulnerable segments of the population, in both developed and developing
economies. Actions by companies to address these risks can have a direct and positive effect on theirlivelihoods. It is estimated that 80% of trade (gross exports) is linked to international production networks
which are increasingly becoming more complex and that 453 million jobs in 40 countries which represent 85%
6of global GDP are linked to global supply chains (this does not include informal or non-traditional workers).

Finding opportunities through RBC: Implementing RBC standards is not something to be done andcompleted before turning to philanthropic opportunities in terms of contributing to the SDGs. RBC is an ongoing imperative and itself provides a critical contribution to the SDGs, with the potential for large-scale
positive outcomes in people’s lives. Moreover, RBC benefits business as well - reducing operational,reputational, and financial risks, with additional opportunities resulting from becoming an investment,partner, brand and employer of choice. For example, there is empirical evidence that ensuring better working
conditions leads to productivity increases in7companies. Evidence from the Better Work
New research from the Business andProgramme, which is implemented in eight countries
Sustainable Development Commission
in the garment sector, shows that there is a positive(2017) shows that the economic gains forcorrelation when companies invest in better working
the private sector from implementing theconditions and the profits, productivity, and factory
SDGs could be at least $12 trillion by 2030
survival rates. On a country level, participation in theand potentially 2-3 times more, assuming
programme is associated with significant increases inthat the benefits are captured across the8apparel exports.
whole economy and accompanied bymuch higher labour and resource
Leveraging the role of the government: It isproductivity. Consider the example ofwidely recognised that governments have a crucial
gender equality - McKinsey Global Instituterole in promoting and enabling RBC. Governments
estimates that would add at least $12
can make the link between RBC and the SDGs clear,trillion to global growth by 2025, and up toincluding in related policy areas such as investment,$28 trillion.
export credits, development finance, procurement
and the provision of access to remedy.

2Resources


BSDC (2017), Better Business, Better World, Business and Sustainable Development CommissionDanish Institute for Human Rights (2017), The Human Rights Guide to the Sustainable Development Goals



Danish Institute for Human Rights and Nestlé S.A(2017), A shared agenda: Nestlé’s salient human rights
issues and the Sustainable Development Goals report 2017

Institute for Human Rights and Business (2015), State of Play – Business and the Sustainable Development
Goals: Mind the Gap – Challenges for Implementation

ILO (2017), In brief - Decent work and the 2030 agenda for sustainable development

Roel Nieuwenkamp (2016), Accountability mechanism for the Sustainable Development Goals

Norway (2017), Responsible Business Conduct is a precondition for achieving the UN’s SustainableDevelopment Goals

Norway (2017), Annual Report 2016 of the Norway National Contact PointOECD (2016), Development Co-operation Report 2016: The Sustainable Development Goals as Business
Opportunities

OECD (2015), Policy Framework for Investment

OECD (2011), OECD Guidelines for Multinational Enterprises

John Ruggie (2016), Making Globalization Work for All: Achieving the Sustainable Development Goals
Through Business Respect for Human Rights

Shift (2016), Business, Human Rights and the Sustainable Development Goals: Forging a Coherent VisionUN (2011), Guiding Principles on Business and Human Rights, HR/PUB/11/04

Woetzel et al. (2015), The Power of Parity: How advancing women’s equality can add $12 trillion to global
growth, McKinsey Global InstituteNotes
1The average income of the richest 10% of the population is about nine times that of the poorest 10% across the OECD, up from seven times 25years ago. OECD (2017), Inequality

2

Others double that estimate. ILO (2016), Forced labour, modern slavery and human trafficking website; Walk Free Foundation (2014), Tacklingmodern slavery in supply chains.

3Although RBC is sometimes used interchangeably with corporate social responsibility (CSR), it is understood to be more comprehensive andintegral to core business than what is traditionally considered CSR (mainly philanthropy). Increasingly, CSR is used in a similar way as RBC. For
example, the latest strategy of the European Commission A renewed EU strategy 2011-14 for Corporate Social Responsibility uses CSR in broad
terms in line with RBC. Many times the difference between the two is an issue of semantics in practice. Both RBC and CSR (if used beyondphilanthropy) aim to promote the same idea - that businesses should consider the impact of their activities beyond just the impact on thecompany itself.

4See PwC (2015), Make it your business: Engaging with the Sustainable Development Goals and Guardian (2016), More than half of all businesses
ignore UN's sustainable development goals, 30 September 2016.

5For example, consider that recent research by the Danish Institute for Business and Human Rights found that more than 92% of SDG targets arelinked with the UN human rights and ILO labour standars (DIHR, 2017).

6Shift (2016) and ILO (2017). Source for the text box: Creamer Media (2014), “iTSCi appoints new independent evaluators Synergy Global
Consulting for conflict-free minerals programme assurance”, iTSCI Media Statement, 22 May.

7

While the expectation that businesses respect human rights under the OECD Guidelines and UN Guiding Principles is neither conditional nor
dependent on the business case, communicating the business case to businesses can make a difference. Source for the text box: BCSD (2017)
and Woetzel et al. (2015), The Power of Parity: How advancing women’s equality can add $12 trillion to global growth, McKinsey GlobalInstitute8Better Factories Cambodia (2016); World Bank (2015a), Interwoven - How the Better Work Program Improves Job and Life Quality in theApparel Sector.

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