BETTER BUSINESSBETTER WORLD
The report of the Business & Sustainable Development Commission

January 2017

Business and Sustainable Development Commission
c/o Systemiq
1 Fore Street
London ECY 5EJ
info@businesscommission.org
www.businesscommission.org and report.businesscommission.org

Managing Partners

http://www.systemiq.earth

http://www.unfoundation.org

Copyright Business and Sustainable Development Commission. This work is licensed under aCreative Commons License Attribution-NonCommercial 4.0 International (cc by-nc 4.0).
January 2017
Cover photo credit: Ly Hoang Long

THE BUSINESS AND SUSTAINABLE DEVELOPMENTCOMMISSION
The Business and Sustainable Development Commission was launched in Davos inJanuary 2016. It brings together leaders from business, finance, civil society, labour,and international organisations, with the twin aims of mapping the economic prizethat could be available to business if the UN Sustainable Development Goals areachieved, and describing how business can contribute to delivering these goals.
The Better Business, Better World report was led by the commissioners, and supported
by: the Australian Department of Foreign Affairs and Trade (DFAT), the Bill &Melinda Gates Foundation, the Global Green Growth Forum (3GF), the Swedish
International Development Cooperation Agency (Sida), the Netherlands Ministryof Foreign Affairs (MoFA), the Norwegian Ministry of Climate and Environment,
the Rockefeller Foundation, and the UK Department for International Development(DFID).
The Business and Sustainable Development Commission has overseen this reportwith secretariat support provided by SYSTEMIQ and the UN Foundation. Chaired by
Lord Mark Malloch-Brown, the Commission comprises business leaders from aroundthe world.
Members of the Business and Sustainable Development Commission endorse thegeneral thrust of the arguments, findings, and recommendations made in this report,
but should not be taken as agreeing with every word or number. They serve on theCommission in a personal capacity. The institutions with which they are affiliatedhave not been asked to formally endorse the report.

Learn more at:
http://businesscommission.org
https://www.linkedin.com/company/business-commission
https://www.facebook.com/businesscommission
https://twitter.com/bizcommission

1

THE COMMISSIONERS
Lord Mark Malloch-Brown,

Mary Ellen Iskenderian,

former Deputy Secretary-General, United Nations (Chair)CEO, Women’s World Banking

Amr Al-Dabbagh,

Dr. Amy Jadesimi,

Chairman & CEO, The Al-Dabbagh GroupManaging Director & CEO, Lagos Deep Offshore Logistics Base(LADOL)

Laura Alfaro,
Professor, Harvard Business School

Donald Kaberuka,
former President, African Development Bank Group

Peter Bakker,
President, The World Business Council on Sustainable

Lise Kingo,

Development (WBCSD)

Executive Director of the United Nations Global Compact

Sharan Burrow,

Jack Ma,

General Secretary, International Trade Union Confederation

Founder and Executive Chairman, The Alibaba Group(ITUC)
Andrew Michelmore,
Ho Ching,

CEO, MMG Ltd.

CEO, Temasek Holdings Private Ltd.
Sam Mostyn,
Bob Collymore,

President, Australian Council for International Development

CEO, Safaricom Ltd.

(ACFID)John Danilovich,

Arif Naqvi,

Secretary General, The International Chamber of Commerce

Founder & Group CEO, The Abraaj Group(ICC)
Mads Nipper,
Begümhan Doğan Faralyalı,Group President & CEO, The Grundfos Group

Chairwoman, Doğan Group
Cherie Nursalim,
Hendrik du Toit,

Vice Chairman, GITI Group

CEO, Investec Asset Management
Ricken Patel,Richard Edelman,

President & Executive Director, Avaaz

President & CEO, Edelman
Daniel Pinto,
Hans Vestberg/Elaine Weidman Grunewald (acting),

CEO, Corporate & Investment Bank, JP Morgan Chase & Co.

CEO, Ericsson
Paul Polman,
John Fallon,
CEO, Pearson plc
Ken Frazier,
Chairman & CEO, Merck & Co Inc. (2016)
Mats Granryd,
Director General, The GSM Association (GSMA)
Helen Hai,
CEO, The Made in Africa Initiative
Svein-Tore Holsether,President & CEO, Yara International ASA
Mo Ibrahim,
Founder, Celtel & The Mo Ibrahim Foundation

CEO, Unilever
Vineet Rai,
Co-Founder & Chairman, Aavishkaar Intellecap Group
Grant Reid,
CEO, Mars, Inc.
Dinara Seijaparova,
CFO, ‘Baiterek’
Sunny Verghese,
CEO, Olam International
Gavin Wilson,
CEO, IFC Asset Management Company LLC
Mark Wilson,
CEO, Aviva plc

2

Photo credit: MD. Zakirul Mazed

3

CONTENTS
The commissioners

2

The challenge

6

Executive summary

10

The business case for the Global Goals

12

Leading for sustainable development

15

Making the choice17

1. Introduction: The Global Goals and why theymatter for business

19

1.1

The Global Goals for Sustainable Development

22

1.2

The Global Goals need business: business needs the Global Goals

23

2. Major market opportunities opened up by
delivering the Global Goals
2.1

The 60 fastest-growing sustainable market opportunities

26

27

2.2 Opportunities by economic system30

2.3 Progress on all the Global Goals is needed to deliver all the benefits

34

2.4 Pricing of externalities would increase the value of market
opportunities

35

2.5 Geographic distribution of opportunities

38

2.6

40

The impact on jobs

3. Leading for better business and a better world
3.1

Sustainability is already good business

3.2 Innovative businesses are already capturing Global Goals
opportunities
3.3 Transforming the way business operates for better business and abetter world
3.4 Gaining commitment from CEOs and boards

42
43
44

51

51

4

3.5 Incorporating the Global Goals into business strategy
3.6 Accelerating sectoral shifts to sustainable competition by working
with peers
3.7 Shaping public policy

4. Sustainable finance
4.1 Simplifying reporting of environment, social and governance(ESG) performance

52
55

62

68
69

4.2 Unlocking infrastructure investment

73

4.3 Aligning regulation with investment

79

5. Renewing the social contract
5.1

82

An uncertain outlook for employment

84

5.2 Providing decent work and more jobs

86

5.3 Providing training and skills

88

5.4 Forging a new social contract90

5.5 Actions for business92

5.6 Actions for governments

95

5.7 Actions for civil society96

6. Conclusion

97

6.1

Actions for sustainable business leaders

97

6.2

Actions for the Commission

100

References

104

Acknowledgements

116

5

THE CHALLENGE© Image Source / Adobe Stock2016 has unsettled business leaders everywhere. Whatever one's political views,
uncertainty and the return to a much more nationalist politics in many countries
have displaced the assumption of steady global integration. Many commentators
have declared that globalisation has already peaked, despite its role in the past 30year run of unprecedented successes worldwide in health, wealth, education and life
expectancy.
Certainly the contradictions of that success caught up with us in 2016. In theWest, stagnant incomes among broad groups made them angry at elites who were
bailed out after the global financial crisis. Frustrated voters have rejected moreinternational integration. Elsewhere, too, those losing out either economicallyor environmentally, such as the citizens of smog-choked Asian cities, or socially,
through the breakdown of traditional rural communities, are asking whether thecosts of our global economy are greater than its benefits.
These hard questions matter to business leaders everywhere. As members of theBusiness and Sustainable Development Commission, we argue that it is incumbent
on all of us to make the case for business to be at the heart of an open global

Better Business, Better World6

economic system. But we cannot defend a lazy return to the old model that has been
so widely rejected over the past year.

"Business leaders need to strike out in new directions to embrace
more sustainable and inclusive economic models."
We must have the courage to strike out in new directions and embrace an economic
model which is not only low-carbon and environmentally sustainable, but also turns
poverty, inequality and lack of financial access into new market opportunities for
smart, progressive, profit-oriented companies. These complex challenges need thefull and combined attention of government, civil society and business. Otherwise,
there is no chance of solving them.
Solutions are urgently needed. We see the next 15 years as critical, with change
starting now and accelerating over the period. Business as usual is not an option:choosing to “kick the can down the road” over the next four years will put impossible
environmental and social strains on a stuttering global economy. But if enoughleaders act now and collectively, we can forge a different path, one that eases theburden on finite resources and includes those currently left behind or excluded fromthe market, helping to address today's political grievances.
In the pages of this report, some 35 business leaders and civil society representatives
offer our prescription for a new, socially focused business model that reaches partsof the global economy previously left largely to public aid. It considers adopting thesame approaches in developed markets to address similar pockets of need. Taking the
UN's new Global Goals for Sustainable Development as the basis for our action plan,
we lay out how pursuing these goals in partnership with government and civil society
will lead to greater, more widely shared prosperity for all by 2030. We make the casethat businesses adopting this plan will transform their own prospects and could
outperform those stuck in yesterday’s economic game: this is about return on capital,
not just responsibility.

"Big business and finance need to regain public trust."
But responsibility matters too. One casualty of the general meltdown in support
for elites is trust in business. Big business and major financial institutions are
increasingly perceived as detached and rootless, more willing to justify themselves toeach other at meetings like the World Economic Forum than to national legislatures,let alone at town halls in the communities where they operate. So at the core of ourargument is also the need for business to regain the licence to operate. We anticipate
much greater pressure on business to prove itself a responsible social actor, creating
good, properly paid jobs in its supply chains as well as in its factories and offices.
Business will need to demonstrate that it pays taxes where revenue is earned; abides

7

by environmental and labour standards; respects the national politics and customs
where it operates; integrates social and environmental factors in its investment
decisions; and, above all, engages as a partner with others to build an economy that ismore just.
Building those partnerships is not simply a response to the political tides flowing
so strongly against what is seen as unaccountable globalisation today. It’s also an
acknowledgment that the tensions between business and society will remain as eachgrapples with the changes ahead brought on by disruptive advances in technologies
like artificial intelligence and automation. Technology has the potential to drive a
better, more sustainable economy for all, but only if there is a continuous dialogue
between the innovators and society. Business is a bridge for that conversation. It canapply the capital and skills needed to scale new ideas, taking them from the garage orlab to where they have local and global impact.
The Commission represents a considerable combined corporate value and a wide
range of geographies and sectors. But we are still, in the global scheme of things, atiny handful of people armed only with a big idea. So this is our challenge: we appeal
to business leaders everywhere to read our report and join us in building a powerful
movement for a new kind of business. Together we can reach that tipping point wherebusiness, government and civil society embrace the new model for the future and wecreate sustainable prosperity for all. This will not happen just through natural forces.
It will take acts of real leadership.
We plan to make our invitation personally to colleagues and friends, and we wanteverybody who reads this report to consider themselves invited to join us. Pleasecontact Mark directly at m.malloch-brown@businesscommission.org.

Mark Malloch-Brown and Paul Polman
Co-founders, Business and Sustainable Development Commission8© lindrik / Adobe Stock9

E XECUTIVE SUMMARY
Over the past 30 years, the world has seen huge social improvements andtechnological progress. We have experienced unprecedented economic growthand lifted hundreds of millions of people out of poverty. We’re benefiting froma life-changing digital revolution that could help solve our most pressing socialand environmental challenges. Yet despite these successes, our current modelof development is deeply flawed.
Signs of its failure and imperfections in today’s markets are everywhere. Natural
disasters triggered by climate change have doubled in frequency since the 1980s.1
Violence and armed conflict cost the world the equivalent of nine percent of GDP in
2014, while lost biodiversity and ecosystem damage cost an estimated three percent.2
We continue to invest in high-carbon infrastructure at a rate that could commit us
to irreversible, immensely damaging climate change. Social inequality and youth
unemployment is worsening in countries across the world, while on average womenare still paid 25 percent less than men for comparable work.3“Median real wages have been stagnant in developed economies
since the 1980s.”
Median real wages have been stagnant in developed economies since the 1980s,
generating deep anxiety about the impact of automation on both service andmanufacturing jobs and opposition to more globalisation. Real interest rates are
historically low, even negative, in several major economies, while total debt remains
uncomfortably high. Economic views lurch unpredictably between techno-optimism
and political pessimism.
The resulting uncertainty makes it hard for business leaders to see the way ahead.
Rather than commit to longer-term investments, many companies are treading water– sitting on cash, buying back shares, paying high dividends. The latest global reporton trust in business from Edelman shows a double-digit decline in the credibility ofCEOs in 80 percent of countries.4
What else can business leaders do in these circumstances?
This report offers a positive alternative: setting business strategy and transforming
markets in line with the UN Sustainable Development Goals. For the past year, theBusiness and Sustainable Development Commission has been researching the impact
on business of achieving these 17 objectives, known as the Global Goals, which UN
member states agreed to in September 2015.5 Member states will aim their policies

10towards achieving the Global Goals for the next 15 years (Exhibit 1).
Achieving the Global Goals would create a world that is comprehensively sustainable:socially fair; environmentally secure; economically prosperous; inclusive; and morepredictable. They provide a viable model for long-term growth, as long as businesses
move towards them together. The goals are designed to interact, so progress on them
all will have much more impact than achieving only some. Of course, the results will
not be heaven on earth; there will be many practical challenges. But the world would
undoubtedly be on a better, more resilient path. We could be building an economy ofabundance.
These are results that business leaders will surely support. However, they are lesslikely to feel responsible for delivering them: one survey shows that half the business
community think this is government territory.6

E XHIBIT 1:

The Global Goals for Sustainable Development
NO POVERTY

ZERO HUNGERGOOD HEALTH &WELL-BEINGQUALITYEDUCATIONGENDEREQUALITY

CLEAN WATER &SANITATIONAFFORDABLE &CLEAN ENERGYDECENT WORK& ECONOMICGROWTH

INDUSTRY,INNOVATION &INFRASTRUCTURE

REDUCEDINEQUALITIESSUSTAINABLE
CITIES &COMMMUNITIESRESPONSIBLE
CONSUMPTION &PRODUCTION

CLIMATE ACTION

LIFE BELOW
WATER

LIFE ON LANDPEACE, JUSTICE& STRONG
INSTITUTIONSPARTNERSHIPSFOR THE GOALS

Our research tells a very different story. First, it shows that business really needs the
Global Goals: they offer a compelling growth strategy for individual businesses, forbusiness generally and for the world economy. Second, the Global Goals really needbusiness: unless private companies seize the market opportunities they open up andadvance progress on the whole Global Goals package, the abundance they offer won’tmaterialise.

11

Those of us on the Commission who lead companies are choosing to incorporate
the Global Goals for Sustainable Development into our core growth strategies, value
chain operations and policy positions. This report argues that other business leaders
should do the same and soon, whatever the scale of their operations.

“Achieving the Global Goals creates at least US$12 trillion inopportunities.”
Achieving the Global Goals opens up US$12 trillion of market opportunities in7
the four economic systems examined by the Commission. These are food andagriculture, cities, energy and materials, and health and well-being. They represent
around 60 percent of the real economy and are critical to delivering the Global
Goals. To capture these opportunities in full, businesses need to pursue socialand environmental sustainability as avidly as they pursue market share andshareholder value. If a critical mass of companies joins us in doing this now, together
we will become an unstoppable force. If they don’t, the costs and uncertainty ofunsustainable development could swell until there is no viable world in which to dobusiness.
This is new territory. Moving business to a sustainable growth model will
be disruptive, with big risks as well as opportunities at stake. It will involve
experimenting with new “circular” and more agile business models and digitalplatforms that can grow exponentially to shape new social and environmental value
chains. Knowing how to move first and fast is critical; so is reducing exposure to therisk of assets being stranded by the shift to low-carbon, more automated economies.
The report that follows is a call to action for current and future business leaders. It
explains why they should go for growth in line with the Global Goals and how to leadthat change, in their own businesses and beyond.

THE BUSINESS CASE FOR THE GLOBAL GOALS
The business case for sustainable development is strong already: it opens up
new opportunities and big efficiency gains; it drives innovation; and it enhances
reputations. With a reputation for sustainability, companies attract and retain
employees, consumers, B2B customers and investors, and they secure their licenceto operate. That’s why sustainable companies around the globe are thriving anddelivering attractive returns to shareholders. That is why over 9,000 companies
around the world have already signed up to the 10 principles of the UN Global
Compact, a guide to sustainable business behaviour.8

12Photo credit: Flickr / Engineering at Cambridge.

The business case for sustainable development as core strategy gets much stronger
as the world achieves the Global Goals. Our research shows that the Global Goals
opens the 60 biggest market “hot spots” worth up to US$12 trillion a year inbusiness savings and revenue in the four examined economic systems alone by2030. (Exhibit 2).9 The total economic prize from implementing the Global Goals
could be 2-3 times bigger, assuming that the benefits are captured across the whole
economy and accompanied by much higher labour and resource productivity. That’s
a fair assumption. Consider that achieving the single goal of gender equality could
contribute up to US$28 trillion to global GDP by 2025, according to one estimate.10
The overall prize is enormous.

13

E XHIBIT 2:

60 biggest market opportunities related todelivering the Global Goals

Food and Agriculture

CitiesEnergy and Materials

Health and Well-Being

1

Reducing food waste invalue chain

Affordable housing

Circular models automotive

Risk pooling2

Forest ecosystem services

Energy efficiency buildings

Expansion of renewables

Remote patient monitoring

3

Low-income food markets

Electric and hybrid
vehiclesCircular models appliances

Telehealth4

Reducing consumer foodwaste

Public transport in urban
areas

Circular models electronics

Advanced genomics

5

Product reformulation

Car sharing

Energy efficiency - nonenergy intensive industries

Activity services

6

Technology in large-scale
farms

Road safety equipment

Energy storage systems

Detection of counterfeit
drugs

7

Dietary switch

Autonomous vehicles

Resource recovery

Tobacco control

8

Sustainable aquaculture

ICE vehicle fuel efficiency

End-use steel efficiency

Weight management
programs

9

Technology in smallholder
farms

Building resilient cities

Energy efficiency - energy
intensive industries

Better disease
management

10

Micro-irrigation

Municipal water leakage

Carbon capture andstorage

Electronic medical records

11

Restoring degraded land

Cultural tourism

Energy access

Better maternal and childhealth12

Reducing packaging waste

Smart metering

Green chemicals

Healthcare training

13

Cattle intensification

Water and sanitation
infrastructure

Additive manufacturing

Low-cost surgery

14

Urban agriculture

Office sharing

Local content in
extractives

15

Timber buildings

Shared infrastructure16

Durable and modular
buildings

Mine rehabilitation

17

Grid interconnection

14

Leading for sustainable development
The Commission has identified the following six actions you can take as a businessleader to capture your share of this prize. All of them need real leadership from thetop, to inspire purpose and commitment among everyone in your business and totransform the markets in which you all operate together.
1. Build support for the Global Goals as the right growth strategy in yourcompanies and across the business community. The more business leaders who
understand the business case for the Global Goals, the faster progress will be
towards better business in a better world.
2. Incorporate the Global Goals into company strategy. That means applying
a Global Goals lens to every aspect of strategy: appointing board members andsenior executives to prioritise and drive execution; aiming strategic planning andinnovation at sustainable solutions; marketing products and services that inspire
consumers to make sustainable choices; and using the goals to guide leadershipdevelopment, women’s empowerment at every level, regulatory policy and capital
allocation. Achieving the Global Goals will create 380 million new jobs by 2030.11 You
need to make sure your new jobs and any others you generate are decent jobs with aliving wage, not only in your immediate operations but across your supply chains anddistribution networks. And you need to help investors understand the scale of valuethat sustainable business can create.
3. Drive the transformation to sustainable markets with sector peers. Shifting
whole sectors onto a sustainable footing in line with the Global Goals will unlock
much bigger business opportunities. Consider food and agriculture. A global food andagriculture system in line with the Global Goals would deliver nutritious, affordable
food for a growing world population, generate higher incomes – especially for theworld’s 1.5 billion smallholders – and help restore forests, freshwater resources andvital ecosystems, including the world's oceans. It would create new economic value ofmore than US$2 trillion by 2030 and would be much more resilient to climate risk.12“Business as usual” will not achieve this market transformation. Nor will disruptive
innovation by a few sustainable pioneers be enough to drive the shift: the whole
sector has to move. Forward-looking business leaders are working with sector peers
and stakeholders to map their collective route to a sustainable competitive playing
field, identifying tipping points, prioritising the key technology and policy levers,
developing new skill profiles and jobs, quantifying new financing requirements,and laying out the elements of a just transition. Over the next 15 years, driving
system change in line with the Global Goals with sector peers will be an essential,differentiating skill for a world-class business leader. It means shaping new

15

opportunities, pre-empting the risks of disruption and renewing businesses’ licenceto operate.
4. Work with policy-makers to pay the true cost of natural and humanresources. Sustainable competition depends on all the competitors facing prices thatreflect the true costs of the way they do business – internalising the externalities, touse the jargon. The idea of pricing pollution at its true environmental and social costhas been around for a long time. But the need for strong carbon pricing is becoming
ever more urgent to tackle the risk of runaway climate change.
Establishing prices for carbon as well as other environmental resources (especiallywater in many areas) and sticking to those prices fires the starting gun for a “raceto the top”. Businesses that choose to pay living wages and the full cost of theirresources need to be certain that their competitors will do the same in the not too
distant future if they are not to be at a cost disadvantage. Business leaders must
therefore work openly with regulators, business and civil society to shape fiscal andregulatory policies that create a level playing field more in line with the Global Goals.
This could involve fiscal systems becoming more progressive through putting less tax
on labour income and more on pollution and under-priced resources.
5. Push for a financial system oriented towards longer-term sustainable
investment. Achieving the Global Goals will likely require an estimated US$2.4
trillion a year of additional investment, especially for infrastructure and otherprojects with long payback periods.13 There is enough capital available. But in theworld’s uncertain circumstances, most investors are looking for liquidity and shortterm gains. As soon as companies are paying “full” prices that reflect social andenvironment externalities, then their financial performance will be the main signalthat investors need to understand companies’ relative performance on the Global
Goals. But achieving full prices across the economy will take time. Until then – andto help bring that day closer – business leaders can strengthen the flow of capital into
sustainable investments by pushing for three things: transparent, consistent league
tables of sustainability performance linked to the Global Goals; wider and more
efficient use of blended finance instruments to share risk and attract much moreprivate finance into sustainable infrastructure; and alignment of regulatory reforms
in the financial sector with long-term sustainable investment.
6. Rebuild the Social Contract. Trust in business has eroded so sharply since
the global financial crisis, the social fabric is wearing thin. Many see business as
reneging on its social contract. Business leaders can regain society’s trust and secure
their licence to operate by working with governments, consumers, workers and civilsociety to achieve the whole range of Global Goals, and adopting responsible, open
policy advocacy.

16

Rebuilding the social contract requires businesses to pay their taxes transparently
like everyone else and to contribute positively to the communities in which they
operate. In total, there are over 700 million workers employed directly and indirectlyin global supply chains.14 Treating them with respect and paying them a decent wage
would go a long way to building a more inclusive society and expanding consumer
markets. Investing in their training, enabling men and women to fulfil theirpotential, would deliver further returns through higher labour productivity. And
ensuring that the social contract extends from the formal into the informal sector,
through full implementation of the UN's Guiding Principles on Human Rights,15
should be non-negotiable. There are still between 20-40 million people working informs of modern slavery16 and over 150 million children working in the fields, mines,
workshops, and rubbish dumps that underpin much of the global economy, unseen
and unprotected.17“More than 150 million children are working unseen andunprotected.”
This is an unacceptable feature of 21st century capitalism – one that boardrooms,
investors and consumers can no longer ignore.

Making the choiceBusinesses don’t have to lead the shift to a sustainable global economy. There are
two alternatives. They can do more of the same, so today’s slow shuffle towards
sustainability continues, two steps forward, one or more steps back. Or they candelay the shift because of apparent advantages to them in the status quo.
But neither option has a long-term future. The environmental and climate science isclear: so are the growing costs of inaction. People and most governments want fasterprogress.
Delaying a better world is wrong, and decent board members, employees, consumers
and investors want to do the right thing. And if progress is too slow, there may be no
viable world to do business in.
If social and environmental indicators don’t improve in the next 5-15 years, what’s
most likely is a strengthening popular backlash against business and increasingly
drastic regulatory responses from governments. First movers who have alreadyaligned their resource use and workforce management with the Global Goals will
have a 5-15 year advantage on the sustainable playing field. The faster a criticalmass of company leaders decide to line up their business objectives with the Global
Goals and make their sectors more sustainable, the more business there will be for17everyone in a more predictable, prosperous, peaceful world.

"First movers will have a 5 to 15 year advantage."
Some of us on the Commission run or serve smaller businesses and all of us havevendor and supply chains that include medium and small enterprises. We recognisethat many of the 380 million new jobs that achieving the Global Goals will create,
will be in businesses of this scale. Their strategies are critical to progress towards
sustainable markets and value chains. Progress could be delayed if they don’t getenough support. In particular, they need access to affordable finance to makesustainable investments that make a positive social and environmental impact as well
as a decent return.
Over the coming months, members of the Commission plan to give our support to all
those business leaders who, like us, want better business in a better world. It is time
to change the game.

18

1. INTRODUCTION: THE GLOBAL GOALS AND WHY
THEY MATTER FOR BUSINESSKey points•

Despite the economic and social gains of the past 30 years, theworld’s current economic model is deeply flawed.

•

Uncertainty and turbulence arising from the current model’s
failures make it hard for businesses to see a way ahead to future
growth and prosperity.

•

Past social and economic successes may be reversed without
urgent action.

•

The UN Global Goals for Sustainable Development offer a compelling
growth strategy for individual businesses and the world economy.

Photo credit: Flickr /usdagov

19Three decades have passed since the Brundtland Commission report, Our Common
Future, defined sustainable development as “development that meets the needs ofthe present without compromising the ability of future generations to meet their own
needs”.18 Since then, the world has seen huge social improvements and continued toexperience unprecedented economic growth. Between 1988 and 2008, the poorest
third of humanity saw their incomes rise by 40-70 percent, with those of the middle
third rising by 80 percent.19 The proportion of people in extreme poverty declined bymore than half between 1990 and 2015, as did the number of children dying before
the age of five.20 Over the past 50 years, while the world population has almost
tripled to more than 7 billion, global GDP has expanded six-fold.
However, these social and economic successes mask major fault lines in the world’s
current model of development. It is failing the Brundtland test. Many of the driversof growth in the past – for instance, use of fossil fuels and rapid urbanisation – are nolonger sustainable in their past forms. Without urgent correction, growth is likely to
be much slower and more erratic over the next 30 years than the past 30, and many
who escaped poverty during that period could slide back in.
Failures in today’s development model are adding to a swelling list of global
burdens that threaten future stability and shared prosperity. On the environmental
front, human activity has already pushed the planet beyond four of its nine safety
boundaries, the ones for climate change, loss of biosphere integrity, land-systemchange and altered biogeochemical cycles.21 On the social front, there are vast
numbers of people who do not have access to basic services such as healthcare,clean water, clean energy and sanitation. In middle-income countries, the growing
burden of non-communicable ill health is replacing gains made in the treatmentof communicable diseases. Tobacco now kills around 6 million people annually22,
and the global prevalence of obesity doubled between 1980 and 2014 23. Although
improving, many education systems are still failing to deliver access to high quality
education. Without urgent action, the prospects for more than 124 million children
and young people lacking access to schools24 and more than 250 million not learning
necessary skills are severely diminished.25 Income inequality in OECD countries is at
its highest level for 30 years26, and Oxfam estimates that the 62 richest people in theworld have the same wealth as half the world’s population.27"Income inequality in OECD countries is at its highest level for 30
years."On the economic front, many of these burdens are beginning to place important
constraints on the world’s future growth prospects (Exhibit 3). For example, without
radical changes in the current food and agriculture system, the cost of biodiversity
and ecosystem damage could reach up to 18 percent of global economic output by20

2050, up from around US$2 trillion, or 3.1 percent, in 2008.28 The costs of runaway
climate change could be even greater, acting as a risk multiplier across alreadyfragile environmental and social systems. Finally, there are growing concerns withgovernance and security related issues. In 2014, the world spent 9.1 percent of its
GDP on costs associated with violence.29 According to the IMF, the cost of bribery isroughly 2 percent of global GDP, and illicit flows from developing countries are over
US$1 trillion.30
The uncertainty created by these burdens makes it hard for businesses to make out
the future. This is one reason why so many are treading water. Rather than commit
themselves to long-term investments based on today’s flawed growth model, they
are sitting on cash, buying back shares or paying high dividends – tactics that attract
criticism.

E XHIBIT 3:

Global burdens arising from the current model of
economic development
Estimated annual global direct economic impact associatedwith selected global burdens
Share of global GDP, 2014

FutureTrend*
9.1%

Violence & armed conflict
Biodiversity & ecosystem impact

3.1%

Smoking

2.8%

Obesity

2.7%

Corruption

2.0%

Alchoholism

1.9%
1.8%

Illiteracy
Antimicrobial resistance

1.6%

Congestion costs

1.6%

Illicit financial flows

1.4%

Food waste

1.4%

Climate change

1.3%

Dimension*

Environment

GovernanceSocialAssumes a “business-as-usual” approach where no concerted action is taken to address these global burdens.

Source: Literature review; WHO Global Burden of Disease database; McKinsey Global Institute, AlphaBeta
analysis.

211.1 The Global Goals for Sustainable Development
In 2015, governments took two urgent steps to transform the nature of development
so that it meets the Brundtland standard of sustainability. One was the Paris climatechange agreement31, which set out an agenda and timetable for nations to makethe structural shift to low-carbon economies. It aims to keep the world well below
two degrees of global warming and to help the most vulnerable communities toadapt. The other step was governments’ agreement to achieve 17 Global Goals for
Sustainable Development by 2030. (Exhibit 4)
These 17 Global Goals and their 169 component targets have been designed fromthe bottom up to build the kind of future that most people want, where there is nopoverty, the planet is protected and all people enjoy peace and prosperity.
The goals fall into two main areas – social and environmental. Some of the social
goals aim to meet basic needs. They include ending extreme poverty and hunger andensuring universal access to healthcare, clean water and sanitation. Others advanceother human rights, empowering people through quality education, gender equality,
employment and decent work, reduced inequalities, and innovations in industry andinfrastructure so people prosper and feel valued.
The wide range of environmental goals aims to keep the world within key planetary
safety boundaries through changing how the economy works across the globe. They
cover climate change, access to affordable and clean energy, sustainable consumption
and production, and biodiversity on land and below water, treating oceans as vital
global commons.
The final two goals focus on values and governance. Goal 16 concerns peace,justice and institutions, and Goal 17 describes the need for a “global partnership forsustainable development”.32
Together the 17 goals form an integrated package. The environmental goals cannot bedelivered without the social goals and vice versa. Efforts to eradicate poverty without
protecting “natural capital” are doomed to failure partly because the lives of so manypoor people depend on natural resources. By the same token, progress towards thetwo degrees warming limit and the Global Goals will together in effect “reboot” theworld’s economic systems, making normal business activity intrinsically sustainable,socially fair and environmentally stable.

"The environmental Global Goals cannot be achieved without thesocial Goals and vice versa"

22However, progress needs to go much, much faster to get the world onto a sustainable
track. Economic choices already made condemn the world to further warming of atleast one degree. Without a huge shift towards low-carbon economies in the next
5-10 years, it will be too late to keep below the two-degree danger threshold. The
World Bank estimates that failure to take action now to halt climate change puts 100
million people at risk of falling back into poverty by 203033.

1.2 The Global Goals need business: business needs the
Global Goals
Global Goal 17 explicitly recognises business as indispensable to “global partnershipfor sustainable development”. Some businesses are already taking the Global Goals
as serious signals of future policy and market direction: 2015 research by GlobeScan,a polling firm, found that one in three companies planned to use the Global Goals as
input for setting corporate objectives.34 However, two thirds have yet to join them.
This is perhaps not surprising. The Global Goals are an intergovernmental initiative.
Some of the goals appear to lie beyond the scope or interest of companies. Manycompanies still view sustainable development as a corporate social responsibility(CSR), which they support through their CSR departments essentially to protect andbuild their reputation and reduce waste.
However, a growing number of companies, including those represented on thisCommission, have already made the Global Goals for Sustainable Development a
priority on their strategic agenda. This report argues that other company boards
should do the same for two main reasons. First, business needs the Global Goals;
they offer a compelling growth strategy for individual businesses, business generally
and the world economy, one that opens up immense new market opportunities.
Second, the Global Goals need business: unless private companies seize the market
opportunities they open up and advance progress across the whole range of goals,
neither business nor the rest of the world will gain all the benefits that stem fromachieving the goals.
Achieving the Global Goals by 2030 is an ambitious vision. But for responsible, farsighted businesses, it’s a vision that offers significant growth through solving theworld’s biggest problems (see Section 2). As more and more businesses choose thatvision as their roadmap to growth, so general confidence in reaching the Global
Goals will grow, creating powerful incentives for companies, governments and otherstakeholders to plan and invest accordingly. As this unstoppable force gathers pace,so more companies will compete for the opportunities unlocked by creating a futurethat is environmentally stable and socially inclusive. Businesses anticipating that23

Photo credit: Hellio Vaningen

future in the strategic choices they make today are more likely to thrive.
The world will still face many challenges in 2030. There will still be intensecompetition over resources; corruption won’t have disappeared; the environment
will still face risks; and social justice will likely be a major issue worldwide. But aworld that has been pursuing the Global Goals will be better organised to addressthese challenges. More capital will be deployed in sustainable infrastructure. Moreinnovation will be directed at environmentally stable solutions. Women will havegained much greater economic and social power and the benefits of trade will be
more evenly spread, helping to strengthen further international cooperation.
Board executives don’t have to choose this vision. But consider the alternatives. Overthe next 15 years, like it or not, sustainability will become as big and disruptive inevery sector as digital technologies have become over the past 15. Moreover, over the
next 15 years, these two disruptive forces will increasingly converge. The majority ofbusinesses successfully targeting sustainable market opportunities today are built on
digital technologies (see Section 3.2). And digital industry groups and policymakers
are collaborating already to see how and where digital technologies can speed
progress towards the Global Goals and to develop enabling policy. In many sectors,
this collaboration is likely to be a powerful driver of rapid change. In the energy
sector, the combination of technical innovation, much of it digital, and long-term
enabling regulation is making clean power and energy efficiency credible, rapidly

24scaling challengers to fossil fuel in countries around the world. In agriculture, digitalsolutions could drive up yields, cut food waste and transform water management.

"Disruptive sustainability can move very fast."
Whatever drives it, when disruptive sustainability takes off in a sector, it can movevery fast – as fast as new mobility service providers are changing transport systems
today, leaving unprepared incumbents stranded. By the same token, companies that
anticipate the disruption by prioritising the Global Goals in their strategic agenda
today will also be driving the disruption to their competitive advantage.
If too few of them do and regulators respond too late, the burdens and costs of fault
lines in the current model of development may grow until there is no longer a viableworld to do business in.
The Commission believes collective action is needed to deliver the Global Goals.
Top-down initiatives won’t work. All the actors in the world’s markets need to work
together on innovative solutions to the most pressing needs of society across theworld. They need to scale sustainable markets by shaping the market conditions thatwill trigger a “race to the top” and unlocking the necessary finance.
The rest of this report describes the major market opportunities opened up byachieving the Global Goals in Section 2, and how business leaders can capture andmultiply those opportunities and build a better world in Section 3. Section 4 detailschanges to the financial system that will unlock investment needed to achieve the
Global Goals. Section 5 shows how businesses can contribute to essential progresson the social goals and regain lost trust through a new social contract with civilsociety (including individual citizens as well as nongovernmental organisations)and governments. Section 6 proposes next steps for business leaders convinced by
the business case for sustainable development and how this Commission plans to
support them over the next year.

25

2. MA JOR MARKET OPPORTUNITIES OPENED UP BY
DELIVERING THE GLOBAL GOALS
Key points•

Achieving the Global Goals opens up an economic prize of at least
US$12 trillion by 2030 for the private sector and potentially 2-3 times
more.

•

Well over 50 percent of the prize is located in developing countries.

•

15 out of the 60 market “hot spots” in the four economic systems
reviewed by the Commission – food and agriculture, cities, energy andmaterials, and health and well-being – account for 50 percent of thisprize.

•

Achieving the Global Goals in these four economic systems could
create 380 million new jobs by 2030, almost 90 percent of them indeveloping countries. One market hot spot, affordable housing,accounts for almost one fifth (70 million) of these jobs.

•

Pricing in environmental costs such as climate change increases the“real” size of the prize by a further 40 percent.

The 60 fastest growing market opportunities opened up by achieving the Global
Goals across the world in just four key economic systems could be worth up to US$12
trillion a year for the private sector by 2030, according to research for the Businessand Sustainable Development Commission.35 This amount represents about 10
percent of forecast global GDP in 2030.
The 60 opportunities, in food and agriculture, cities, energy and materials, andhealth and well-being, could also generate almost 380 million jobs, or work for morethan 10 percent of the forecast labour force in 2030.36
The Commission has made a conservative scaling of this analysis across othersectors critical to sustainable development, including information communication
technologies, education and consumer goods. This indicates a further US$8 trillion
a year of value could be created from business opportunities opened up in a world
pursuing the Global Goals.37 Pricing in externalities38 pushes the total higher.

26

Economic gains from achieving all the social Global Goals add substantially to thetotal prize that could be shared by the private sector. Research from the McKinsey
Global Institute indicates that achieving gender parity alone would add at least
US$12 trillion to global growth by 2025, and up to US$28 trillion.39 Better healthand education will increase labour productivity. Reduced social inequality andenvironmental stress will reduce political uncertainty, lowering business risks
and multiplying returns on investment. Seen in this light, the Global Goals offer acompelling growth strategy for individual businesses, business generally and theworld economy.

"Achieving gender parity alone would add at least US$12 trillion to
the global economy."
This section describes the 60 fastest-growing opportunities and their impact.

2.1 The 60 fastest-growing sustainable market
opportunities
The market study produced for the Commission analysed specific business
opportunities related to achieving the Global Goals in four economic systems – foodand agriculture, cities, energy and materials, and health and well-being – chosen for
their economic impact and relevance to achieving the Global Goals. The 60 largest
opportunities together could generate business revenues and savings worth morethan US$12 trillion by 2030. The 15 largest of these opportunities account for overhalf of the total sum.

27

E XHIBIT 2:

60 biggest market opportunities related todelivering the Global Goals

Food and Agriculture

CitiesEnergy and Materials

Health and Well-Being

1

Reducing food waste invalue chain

Affordable housing

Circular models automotive

Risk pooling2

Forest ecosystem services

Energy efficiency buildings

Expansion of renewables

Remote patient monitoring

3

Low-income food markets

Electric and hybrid
vehiclesCircular models appliances

Telehealth4

Reducing consumer foodwaste

Public transport in urban
areas

Circular models electronics

Advanced genomics

5

Product reformulation

Car sharing

Energy efficiency - nonenergy intensive industries

Activity services

6

Technology in large-scale
farms

Road safety equipment

Energy storage systems

Detection of counterfeit
drugs

7

Dietary switch

Autonomous vehicles

Resource recovery

Tobacco control

8

Sustainable aquaculture

ICE vehicle fuel efficiency

End-use steel efficiency

Weight management
programs

9

Technology in smallholder
farms

Building resilient cities

Energy efficiency - energy
intensive industries

Better disease
management

10

Micro-irrigation

Municipal water leakage

Carbon capture andstorage

Electronic medical records

11

Restoring degraded land

Cultural tourism

Energy access

Better maternal and childhealth12

Reducing packaging waste

Smart metering

Green chemicals

Healthcare training

13

Cattle intensification

Water and sanitation
infrastructure

Additive manufacturing

Low-cost surgery

14

Urban agriculture

Office sharing

Local content in
extractives

15

Timber buildings

Shared infrastructure16

Durable and modular
buildings

Mine rehabilitation

17

Grid interconnection28

Though this big group of opportunities arises across four different economic
systems, they share common themes (Exhibit 5). The two largest, accounting
for more than one-quarter of the total value of the opportunities, are harnessing
mobility systems – including public transport, circular economy40 in automotive
and electric and hybrid vehicles – and new healthcare solutions. Clean energy is alsoa major theme, incorporating both expansion of renewables and carbon captureand storage, and related supporting opportunities such as energy storage and gridinterconnection. Healthy lifestyles are important across systems, with opportunities
including activity services, switching diets and tobacco control.

E XHIBIT 5:

12 largest business themes in a world economy
heading for the Global Goals
Theme

Value of incremental opportunities in 2030
US$ billions: 2015 values*
2,020

Mobility systems
New healthcare solutions

1,650
1,345

Energy efficiency
1,200

Clean energy
1,080

Affordable housing

1,015

Circular economy manufacturing
835

Healthy lifestyles
685

Food loss & waste

665

Agricultural solutions
Forest ecosystem services

365

Urban infrastructure

355

Buildings solutions

345
740

Other

*

Based on estimated savings or project market sizings in each area. Rounded to nearest US$ billion.

Source: Literature search; AlphaBeta analysis

292.2 Opportunities by economic system
The opportunities identified in each system arise from tackling the biggest social andenvironmental challenges confronting the systems in line with the Global Goals.
Food and agriculture. The global food system faces unprecedented challenges.
There are 800 million undernourished people and 2 billion suffering frommicronutrient deficiencies41; crop yields are growing much more slowly than world
population, which means that up to 220 million additional hectares of cropland could
be needed by 2030 to meet expected demand for food, feed and fuel42; and major
environmental stresses, including water scarcity, loss of biodiversity, unsustainablefertiliser use and climate-driven extreme weather, all threaten supply.
The 14 largest opportunities in 2030 identified for companies that develop businessmodels addressing these and further challenges facing food and agriculture
have an estimated potential value of over US$2.3 trillion at current prices. These
opportunities include:•

Reducing food waste in the value chain (worth US$155-405 billion a yearby 2030). Today, 20-30 percent of food is wasted, much of it in post-harvest
losses that are easy to prevent with technologies like small metal silos or plastic
crates.43 In India and Rwanda, such technologies have reduced losses by over 60
percent – and increased smallholder farmers’ incomes by more than 30 percent.44

Photo credit:
Flickr / LYSCDE

30•Forest ecosystem services (US$140-365 billion a year by 2030). Deforestationand forest degradation accounts for 17 percent of global emissions, more thantransport.45 Just four commodities – beef, soy, palm oil and paper/pulp – areresponsible for driving half of all deforestation.46 Assuming a carbon price of
US$50 per tonne by 2030 (roughly consistent with the planning assumption
many leading companies make today) opens up major new opportunities insustainable forest services, such as climate change mitigation, watershed services
and biodiversity conservation, if mechanisms to pay for them develop too.

•

Low-income food markets (US$155-265 billion). The world’s-poorest
people spend as much as 60 percent of their household income on food – yetundernutrition and malnutrition remain widespread.47 Business can address
this challenge by investing in supply chains and food innovation to give thoseon very low incomes access to food products that are more nutritious. As
poverty decreases in line with Global Goal 2, so the 800 million people now
undernourished will have more to spend on food.

Cities. By 2030, 60 percent of the world’s population will live in cities, up from about
50 percent today.48 But modern cities face a long list of problems. Up to 440 million
urban households could be living in sub-standard housing by 2025.49 Already, over
5.5 million premature deaths a year are attributable to household and outdoor air
pollution.50 Obesity is three to four times more common in cities than in rural areasin emerging markets .51 Congestion is a costly urban trial. In cities, 10-15 percent ofbuilding material is wasted during construction52, and cities account for 70 percent
of global energy use and energy-related GHG emissions.53
For businesses addressing these challenges, the 16 largest opportunities have apotential value of US$3.7 trillion. They include:•

Affordable housing (US$650-1,080 billion). Replacing today’s inadequate
housing and building the additional units needed by 2025 would take US$9
trillion to US$11 trillion in construction spending alone.54 With land, the total
cost could be US$16 trillion.55 But the gap between income available for housing
and the annualised market price of a standard house is US$650 billion.56 Filling
this gap requires innovations that will unlock new land and better use of spacefor development, for instance, through offering “density bonuses” to developers,
as well as more efficient techniques and resource use.

•

Energy efficiency – buildings (US$555-770 billion). The building sector
accounts for around one-third of the total final energy consumption acrossthe world and more than half of electricity demand.57 Its energy demand could
be shrunk by, for instance, retrofitting existing buildings with more efficient31heating and cooling technology and switching to efficient lighting and otherelectrical appliances.

•

Electric and hybrid vehicles (US$310-320 billion). Market research predicts
annual sales of battery-powered electric vehicles and hybrids will grow fromabout 2.3 million units in 2014 to 11.5 million by 2022, or 11 percent of the global
market.58 Assuming an average life of 15 years, the total global passenger vehicle
fleet will turn over completely by 2030, presenting an opportunity for a hugeincrease in sales of electric vehicles and plug-in hybrid electric vehicles.59 Electricand hybrid vehicles could comprise an estimated 62 percent of new light-duty
vehicle sales in 2030, as long as battery costs continue to fall and investments incharging infrastructure grow.60

Energy and materials. Growth in demand for energy could slow to 2030 becauseof demographic changes and China's shift from investment-led growth towards
greater consumption. That said, over 1.5 billion people are expected to join thehigher energy-consuming income brackets by 2030.61 Meanwhile great inequality
in energy consumption persists, with 1.2 billion people still lacking access toelectricity.62 Moreover, risks concerning the location of new sources of supply, theirenvironmental impact, water use and technical complexity are likely to add to the
supply costs of energy and materials.
The 17 largest business opportunities arising from tackling these and further energy
challenges have a potential value in 2030 of over US$4.3 trillion in current prices.
They include:•

Circular models – automotive (US$475-810 billion). Collection rates forvehicles at the end of their life are generally very high, over 70 percent in the
EU for example.63 However, most collected vehicles are recycled into their basematerials, which is energy intensive and results in loss of value. In fact, only asmall number of “weakest-link” components are typically responsible for ending
a vehicle’s useful life, which can be significantly extended if these components
are remanufactured and used to refurbish cars.

•

Expansion of renewables (US$165-605 billion). There is a massive opportunity
for renewable generators and equipment manufacturers. The International
Renewable Energy Agency’s (IRENA) REmap scenario forecasts that, includinghydropower, renewables’ share of generation worldwide could increase to 45
percent by 2030, from around 23 percent in 2014 64 Under this scenario, wind’s
share of global generation could more than quadruple from three percent in 2014
to 14 percent in 2030, and solar PV from less than one percent to seven percent.65
In Europe, renewables penetration is already growing quickly – in Denmarkin 2015, wind supplied 42 percent of power consumption – while annual global

32

investment in solar PV has already reached between US$100 billion and US$150
billion over the past five years.66•

Circular models – appliances and machinery (US$305-525 billion). Many
domestic appliances and much industrial machinery are well-suited to circularmodels but they are collected and reused much less than cars. A washingmachine, for example, typically contains 30-40 kg of steel, so a refurbishedmachine could reduce material input costs by 60 percent.67 Businesses could shift
from selling to leasing appliances or making performance-based arrangementswith consumers, to make sure collection and refurbishment captures as muchvalue as possible. This shift would also encourage manufacturers to design
products with lower risks of obsolescence.

Health and well-being. Despite growth in demand as more people live longer, thiseconomic system faces critical challenges in coming years: the declining power ofdrugs to treat major communicable diseases – antibiotics are a particular worry, with
only 40 contenders to replace them in the pipeline; demographic shifts that change
the nature of demand placed on health systems – an “elderly bulge” in developed
countries and a “youth bulge” in developing ones; as well as a geographic shift indisease patterns – about two-thirds of child mortality and deaths related to AIDS and
TB now occur in middle-income rather than low-income countries.68 And the burdenof non-communicable diseases continues to increase – for example, the prevalence ofobesity has doubled since 1980 increasing the burden of diabetes and heart disease
everywhere.69 Basic medical services and supplies are still missing in developing
countries and there are looming skill gaps in the medical profession, particularly inaged care.
The 13 largest opportunities for businesses addressing these challenges have apotential value in 2030 of US$1.8 trillion in current prices. They include:•

Risk pooling (US$350-500 billion). Out-of-pocket healthcare payments pusharound five percent of households in low-income countries below the poverty
line each year.70 Since the poor pay a disproportionate share of their income inunavoidable health costs, lack of affordable health insurance is also inequitable.
Increasing penetration of private, public-private and community insurance
schemes can address this problem. As well as spreading health risks acrosscommunities, risk pooling often includes organised “contracting” functions
that purchase health care on behalf of the individuals covered, which in turn
encourages the development of higher-quality private sector providers.

•

Remote patient monitoring (US$300-440 billion). Using sensors that read thevital signs of patients at home can alert nurses and doctors cost effectively to
problems before they worsen. Emerging technologies include wearable patches

33

that can diagnose heart conditions, sensors that monitor asthma medication
intake and detect poor air quality, and glucose monitors that send diabetics’ datastraight to their smartphones.71 McKinsey Global Institute estimates that remotemonitoring could reduce the cost of treating chronic diseases in health systems
by 10 to 20 percent by 2025.72
Photo credit:
Flickr / timgee•

Telehealth (US$130-320 billion). Basic mobile internet technologies are
already extending access to consultation and diagnosis to remote patientsaround the world. In the United States, Mercy Health Systems in Missouri has
built a Virtual Care Center, staffed by hundreds of health care providers, thatprovides telehealth services across four states.73 In remote Andhra Pradesh in
India, Health Management and Research Institute, a non-profit organisation,
provides an internet-based video system that allows pregnant women to consult
obstetricians and gynaecologists in Hyderabad city. A community health worker
joins the expectant mother for the call and helps the patient carry out thedoctor’s instructions. The system has helped raise the rate of safe hospital or
clinic deliveries by 50 percent.74

2.3 Progress on all the Global Goals is needed to deliver
all the benefits
The Global Goals are highly integrated, which means progress on all of them isneeded to open up all the business benefits they offer, as well as the overall societal
gains. For instance, the research shows that effective action on climate change canbe linked to achieving the objectives of strong economic growth and ending poverty,

34while access to affordable energy will help reduce inequality and support sustainableindustrialisation in the developing world. At the same time, major investments ininfrastructure and innovation will be needed to meet the environmental targets set
in the Global Goals.
Links between the social and environmental goals are also marked: sustainable
management of land and water ecosystems will help improve agricultural
productivity and eliminate hunger and malnutrition, while climate action, better
housing and less polluted cities will have widespread benefits for health and wellbeing.75 Progress on the education goal is linked to improvement on more goals thanany other.
Achieving the Global Goals will certainly require new regulations. These are likely
to include measures to address greenhouse gas emissions and encourage resource
efficiency, like mandated carbon and water pricing (see Section 2.4 below and Section3.7); regulations to protect labour rights and address discrimination in employment;
and policies that strengthen governance, for instance, by tackling corruption andclarifying land rights.
Some of these policies will add costs for individual businesses which, conventionally,business leaders might be expected to resist. And some of the goals may appear tolie beyond the responsibility of business, such as quality education and good healthand well-being for everyone. However, the major market opportunities describedin this section will not open up and go on growing without a healthy, productive,
secure global workforce – formal and informal – with money to spend. They won’t
be sustainable unless resources are priced for all competitors at levels that boost
innovation while making sure current resource stocks last as long as possible.
So there is a powerful business, as well as moral, case for the private sector toback progress towards all the Global Goals as they try to capture those market
opportunities.

2.4 Pricing of externalities would increase the value ofmarket opportunities
The report’s sizing of opportunities is based on current prices. However, these largely
do not reflect the cost of a range of externalities, in particular GHG emissions, andthey include various subsidised and unpriced resources, including water, fossil fuels
and food. The value of these resource subsidies globally is estimated to be over US$1
trillion a year.76

35

"The effects of pricing externalities properly is most striking in thefood system."
To understand the impact of removing subsidies and properly pricing resources,
the research takes a subset of the top opportunities and reprices three components
for which reliable data is available: carbon, water and food (Exhibit 6). This “real”
pricing increases the overall value of opportunities by almost 40 percent. The
effects are most striking in the food system, where pricing of externalities almost
doubles the total value of opportunities to reduce food waste. Impacts on energy andmaterials opportunities are also significant: the size of the opportunity in renewablesrises by 46 percent, driven by carbon pricing and by a similar amount in energy
efficiency in non-energy intensive industries.

36

E XHIBIT 6:

Pricing externalities into top market opportunities
adds almost 40% to their value
SDG opportunities

Size of incremental opportunity in 2030 with externalities priced*
US$ billions: 2015 values
Carbon

Water

Food

Increase in value above private
sector opportunity from pricing
environmental externalities+

Energy efficiency –buildings

Expansion of renewables

Reducing food waste in
the value chain

990

770

885

605

778

405

29%

46%

92%

Energy efficiency –non-energy intensive

444

315

41%

industries

Electric and hybrid
vehiclesReducing consumer
food waste

314

220

Public transport

215

End-use steel efficiency

195

8%

345

320

253

225

43%

18%

15%

*

Based on estimated savings or projected market sizings in each area. Only the high case opportunity is shown
here.
+
Externality sizing assumptions carbon price of US$50 tCO2e; average water price increased by US$0.08 foragricultural water and US$0.40 for industrial use (based on removal subsidies); food prices increased by US$44/t
due to removal of subsidies. Rounded to nearest US$5 billion.

Source: Literature search; Alphabeta analysis

37

2.5 Geographic distribution of opportunities
More than half of the total value of the Global Goals business opportunities
arises in developing countries, though the geographic distribution of the value
varies between economic systems. In the case of cities, improving the efficiencyof buildings is one opportunity where developed and developing economies eachhave significant potential, but the affordable housing opportunity is larger in thedeveloping world. The value of energy and materials opportunities is distributed
more evenly – while extractive opportunities are primarily in the developingworld, circular economy models in durable goods are likely to develop first in
developed markets. In the case of food, there are significant opportunities inAfrica and India, reflecting their large share of cropland and currently low levelsof productivity. Health and well-being opportunities are concentrated indeveloping countries, where access is currently low, and in the United States andCanada, where healthcare costs are highest (Exhibit 7).

"Renewable energy is an opportunity across regions of different
incomes."
The importance of individual opportunities also varies by region, with starkdifferences between developed and developing countries. Affordable housing
is the largest opportunity in four regions: Latin America, Russia and Eastern
Europe, China and the rest of developing and emerging Asia. Applying circular
economy models to durable goods provides the largest opportunities in the US
and Canada, Europe and developed Asia-Pacific. Energy efficiency in buildings isa major opportunity in half of the regions, concentrated primarily in the northernparts of the world where heating costs are high. Expansion of renewables is theone opportunity that is important across regions of different income levels, aresult of the gathering pace of the worldwide transition to low-carbon electricity
generation.
Photo credit:
Flickr / Scania

38

E XHIBIT 7:

More than half the value of the Global Goals business
opportunities arises in developing countries
Share of value of SDG business opportunities by region and system; Percent
Food and Agriculture

CitiesEnergy and Materials

Health and Well-Being

Russia & Eastern Europe
4734Europe (OECD & EU-27)
9
17
18
11
United States & Canada
11
18
17
21

Middle East
2
4
4
4

13

Africa
6
7

16

9

21
22

India
5
6

14

Latin America
14
9
7
12

Total opportunity
share, %

China

12

Developed Asia-Pacific
4
6
7
4

13

Rest of developing andemerging Asia *
14
7
7
9

Developing

Developed

Food and agriculture

71

29

Cities52

48

Energy and Materials

54

46

Health and Well-being

60

40

*
Rest of developing Asia includes Central Asia (e.g., Uzbekistan), South Asia (e.g., Bangladesh), Southeast Asia
(e.g., Laos), and North Korea.

Note: Numbers may not sum due to rounding
Source: Literature search, AlphaBeta analysis.

392.6 The impact on jobs
These 60 Global Goals opportunities could together create more than 380 million
new jobs by 2030, more than 10 percent of the forecast size of the labour force(Exhibit 8). Creating jobs might not immediately register as a benefit to an individual
business. But these jobs will be created at a time when the outlook for employment
is uncertain (see Section 5.1). Creating decent new jobs in line with the Global Goals
will also be in line with government strategies, enhancing companies’ reputation andensuring their licence to operate.

"Around 70 million jobs can come from the opportunity inaffordable housing."
Almost one-fifth of the total employment potential – around 70 million jobs – comesfrom just one opportunity: affordable housing. Given annual investment of over US$1
trillion, we estimate this opportunity alone could create 20 million jobs in China, 13
million jobs across Africa and 8 million jobs in India.
The majority of jobs – almost 90 percent – will be created in developing countries,
including 85 million jobs (23 percent) in Africa and 220 million jobs (59 percent) indeveloping Asia. This is because the need for capital investment is much greater inlow- and middle-income countries, especially in affordable housing and other criticalinfrastructure, and because the job creation impact of investment is much larger
given the higher labour intensity of developing economies.

Photo credit:
Flickr / Sambaphi

40

E XHIBIT 8:

Almost 380 million jobs could be created by Global
Goals business opportunities in the four systems
Total jobs created by SDG business opportunities by region and system;
In millions
Food and Agriculture

CitiesEnergy and Materials

Health and Well-being

Russia & Eastern Europe
192
1Europe (OECD & EU-27)
1
6
3
1
United States & Canada
163
1

Middle East
0.4
3
2
1

China
12

Africa

5

21

32

16
16
Latin America
5
11
6
3

49

25

India

16

10

22
22

Rest of developing andemerging Asia *
15
26
11
6

Developed Asia-Pacific
0.4
2
2
0.2

Total jobs created Millions of jobs
Food and agriculture
CitiesEnergy and Materials

71
166
86

Health and Well-being
Total

46
377

*
Rest of developing Asia includes Central Asia (e.g., Uzbekistan), South Asia (e.g., Bangladesh), Southeast Asia
(e.g., Laos), and North Korea.

Note: Numbers may not sum due to rounding
Source: Literature search, AlphaBeta analysis

41

3. LEADING FOR BETTER BUSINESS AND A BETTERWORLD
Key points•

Businesses have long targeted sustainability as a business opportunityand strong sustainability performance is increasingly linked to strong
investor returns.

•

Radical incumbents and new ventures are shaping the Global Goals
market hot spots by deploying five new business models: sharing,
circular, lean service, big data and social enterprise. There are alreadymore than 30 Global Goals “unicorns” with market valuations of morethan US$1 billion.

•

Business leaders who understand that achieving the Global Goals is
key to long-term business growth:

1. Communicate that understanding to the business and investmentcommunity

2. Integrate the Global Goals into corporate strategy
3. Work with sector peers to make sector competition sustainable
4. Help shape enabling policy

The business case for sustainable development is already strong (Subsection 3.1)
and the opportunities opened up by achieving the Global Goals described in Section
2 make it much stronger. A wave of companies and entrepreneurs is already using
innovative technology and business models to enter Global Goals-related markets(Subsection 3.2).
However, opening up the full range and scale of Global Goals-related markets andthe long-term business growth they offer depends on achieving all the Global Goals.
This interdependence calls for a transformation in the way businesses operate. How
business leaders can make this transformation through their own business andbeyond is detailed in Subsections 3.3 to 3.7.

42

3.1 Sustainability is already good business
Many business leaders already see sustainability as much more than a corporatesocial responsibility exercise that boosts reputation by giving a share of profits
to community and environmental projects. Their companies are deploying thesustainability toolkit to open up new business opportunities through innovation, topursue efficiency gains, to attract employees, customers and investors, and ensure
their licence to operate.
A 2014 McKinsey study found that 44 percent of sustainable business leaders cite
growth and new business opportunities as reasons for tackling sustainability
challenges.77 Innovation is the key to finding them. 3M, for example, embeds
sustainability into its innovation pipeline, aiming to minimise waste andavoid pollution through product reformulation.78 One result is the firm’s
Novec fire suppression system: the first viable and sustainable alternative tohydrofluorocarbons (HFCs), a powerful greenhouse gas. With a new global
agreement on reducing HFC use secured in October 2016, 3M is placed to benefit
hugely as the global market switches to safer alternatives.79
Focusing on sustainability can yield large cost savings: one report shows that many
companies have achieved an average internal rate of 27 percent on their low-carbon
investments.80 Dow cut its 2014 energy consumption by 110 trillion BTUs – nearly
as much as all the energy used by households in the American state of Illinois. It
also reused 344 million pounds of manufacturing by-products in the same year,
continuing an approach to resources that had saved the company US$9.4 billion in
the 15 years to 2010. In the 15 years from 1994 to 2010, Dow saved 1,800 trillion BTUs,
which is the energy equivalent to powering all residential buildings throughout
California for more than one and a half years. (endnote 81) The company’s energy
efficiency efforts prevented more than 95 million metric tons of carbon dioxide fromentering the atmosphere and contributed cost savings of US$9.4 billion.81
The growing body of evidence showing that higher sustainability performance means
better financial performance is steadily gaining traction with investors. In a review
of 200 studies on sustainability and corporate performance, Oxford University andArabesque Partners, an investment management firm, concluded that 90 percent
of studies in this area found that high environmental, social and governance (ESG)
standards reduced companies’ cost of capital, and that 80 percent show a positive
correlation between stock price performance and good sustainability practices.82(For more detail, see Section 4).

"Millennials are over 5x more likely to stay at a company where
they feel a strong purpose."43Sustainable companies’ reputation for doing good while doing good business also
helps them to attract and retain talent, especially among the millennials whowill account for three quarters of the global workforce by 2025.83 A 2015 surveyof 7,800 future business leaders from 29 countries found that 75 percent thinkbusinesses are focused on their own agendas rather than improving society, andover 50 percent would take a pay cut to find work that matches their values.84 A 2016
PricewaterhouseCoopers study found that millennials are 5 times more likely to staywith employers when they feel a strong connection with their employer’s purpose.85
Similarly, a study by the Society for Human Resource Management found that morale
was 55 percent better in firms with strong sustainability programmes, employee
loyalty 38 percent better, and workforce productivity increased by 21 percent.86
Lastly, more sustainable companies tend to be more trusted by consumers and B2B
customers, and trust makes customers more likely to buy.87 Unilever has found thatbrands that stand for a clear sense of social or environmental purpose are growing at
twice the rate of other brands in the company’s portfolio.88

3.2 Innovative businesses are already capturing Global
Goals opportunities
Anticipating growing pressure for sustainability from regulators, shareholders,consumers and employees, a number of companies and entrepreneurs are taking
bolder steps to expand in the fastest-growing markets related to the Global Goals.
Many of these innovators are using one or more of the game-changing, largely
digitally-enabled business models that have developed over the past decade. Thesecan be adapted to capturing market opportunities in line with both environmental
and social Global Goals. The models include:•

The sharing economy. By reselling, giving, swapping, renting and lending help,
these models extend the lifetime of resource-consuming goods, lower demand
for replacements and cut waste by up to 20 percent.89 Car sharing schemes,
for instance, not only reduce distances travelled, but also idle capacity and theneed for new vehicles (the average car spends around 95 percent of its time in aparking space90).

•

Lean service. Across the service sector, lean management is being used todrive dramatic reductions in waste and inventory. Among other effects, this cansignificantly boost access to important services such as healthcare. In India,
heart surgery is often performed for a fifth of its cost in the US, with the same or
better outcomes, not only because of lower wages in the health sector, but also
because of significantly leaner processes.91

44

Photo credit: Flickr / pwkrueger•

Circular economy. By taking a circular approach to design, manufacturing andreuse, circular business models keep resources in play for as long as possible andrecover and reuse spent materials and products. In Brazil, waste company Veolia
works with paper and pulp producer Fibria to turn 90 percent of the mineralwastes from cellulose manufacture into a corrective for soil acidity.92 Desso, a
global carpet tiles company, aims to make all of its products “cradle to cradle”
by 2020.93 Already more than 50 percent of yarn used to produce Desso tiles
worldwide is recycled from previously used yarn.

•

Big data and machine learning. At least 20 billion devices are now connectedto the internet and the volume of data captured by business is surging.94 This is
generating new development opportunities, from modelling malaria using mobile
phone data95 to hooking smallholder farmers up to IBM’s hyper-local weather
forecasting tool Deep Thunder96, or driving down electricity use through smart
metering.97•

New social enterprise models. Businesses specifically set up for social orenvironmental impact are proliferating. In Africa, for instance, a partnership
between Moringa School98, a Kenya-based coding school, and Hack Reactor99, a
coding trainer based in the US, identifies children with strong tech potential andgives them top-notch web development training, in the process creating a future
talent pool for the scheme’s partners, which include Safaricom and Barclays.

45

Exhibit 9 shows how far these business models are already being used to develop
businesses across the main business themes identified in the Commission’s research.
For case examples, see Box 1: Innovating for success in sustainable markets on page 49
and report.businesscommission.org.

E XHIBIT 9:

The prevalance of five new business models acrossthe 12 Global Goals business themes
No Activity

Some emerging
activity

The sharing
economyLots of activity

Lean service
models

The circular
economySector dominated

Big data
machinelearning

New social
enterprisemodelsMobility Systems
New Healthcare Solutions
Energy Efficiency
Affordable Housing
Clean Energy
Circular Economy Manufacturing
Agricultural Solutions
Healthy Lifestyles
Food Loss & Waste
Urban Infrastructure
Buildings Solutions
Forest Ecosystem Services

46

The majority of businesses successfully targeting sustainable market opportunities
today are built on digital technologies. Digital industry groups and players, forinstance the Global e-Sustainability Initative and Accenture, are also collaboratingwith policymakers to identify where digital technologies can speed progress towards
the Global Goals and to develop enabling policy.100 This collaboration is likely to be a
powerful driver of rapid change in many sectors.

"Radical incumbents like BMW are choosing to enter moresustainable markets over the status quo."
Drawing on these and other innovations, some “radical incumbents” are using theirposition in established sectors to enter more sustainable, “Global Goals-related”
markets rather than defend the status quo. For example, BMW is repositioning itself
over the longer term as a provider of mobility services such as car-sharing, while itcontinues to manufacture increasingly efficient cars.101 Effectively, it is operating
today over three time horizons simultaneously (Exhibit 10). Similarly, Novo Nordisk,
now a global leader in diabetes treatment, is moving into diabetes prevention eventhough success will mean smaller markets for its existing products.102 For moredetail, see report.businesscommission.org.

E XHIBIT 10:

Forward-looking companies operate
simultaneously on three time horizons

Horizon 3
Horizon 2
Horizon 1

ExamplesGreening today's
products and supply
chain

Optimising withintoday's businessmodel, e.g. upgrading
product• Reducing emissions• Changing products

along value chainsthrough innovation• Reducing resource• Collaborating with

consumption

industry

Preparing for andinfluencing the next
business model• Moving to a service
model• Changing consumer
behavior

THE GLOBAL GOALSFor Sustainable Development

Embeddingsustainability tocreate value• 10-15 year systemicview• Clear link toshareholder value
creation47

Other innovators are using technology allied with their freedom from fixed assets
and existing business models to move rapidly into growing sustainable markets anddrive their growth. Such “disruptive innovators” include:•

Peek Vision,103 a Kenyan company that saw a market opportunity in the bulky,
fragile and expensive equipment used for eye examinations. The firm’s mobile
app and US$5 clip allows anyone with a smartphone to turn their handset into adiagnostic tool with the ophthalmological accuracy of a US$25,000 camera, able
to spot conditions from cataracts to glaucoma.

•

TransferWise,104 which has slashed the cost of sending money abroad by creatinga platform for peer-to-peer money transfer, in the process boosting remittances
to families in developing countries all over the world. For more detail, see report.
businesscommission.org.

•

Bla Bla Car,105 which has scaled ride sharing between cities across Europe,
allowing 1 million tons of CO2 emissions to be avoided in just two years. Like
Transferwise, it is now valued at over US$1 billion although less than a decadeold.106

The Commission’s research has identified 32 such “sustainable development
unicorns” or companies developing Global Goals-related markets with market capsof more than US$1 billion. Among them: Didi Chuxing, a Chinese ride-sharing
company that estimates it has cut 13.5 million tons of carbon emissions per day in2015, reducing congestion, toxic smog and other air pollution in the process107; andGuaHao, a Chinese mobile medical consultation platform now valued at US$1.5
billion, which connects patients and doctors via the internet, dramatically improving
access to healthcare in a country with one-tenth the number of nurses per 1,000
people in the US.108 (Exhibit 11)48

E XHIBIT 11:

Number and valuation of unicorns by Global Goals
business theme
Opportunity Area; Valuation in US$ billions

Number of Current
Unicorns
116

Mobility systems
Circular economy
manufacturing

33

New healthcare
solutions27
17

Buildings solutions
7

Healthy lifestyles

8
4
14
1
3

Clean energy

3

1

Food loss & waste2

1

Box 1: Innovating for success in fast-growing sustainable markets: fourcase examples
Insurer MicroEnsure is bringing affordable insurance to previously unreachable
groups via a model inspired by the popular computer game Angry Birds. The
company saw an opportunity in providing health, life and disability insurance coverfor low-income groups in Asia and Africa. These groups represent a US$40 billion
market opportunity for insurance companies.109 But as they face extensive risks
and can only afford tiny premiums, they tend to get overlooked. For instance, inAfrica less than three percent of the population has health insurance.110 Working
with local telecoms companies and big insurance providers, MicroEnsure created an
Angry Birds model: free but with paid-for bolt-ons. It provides free basic insurance
in exchange for improved consumer loyalty to local telecoms companies, with theoption for consumers to buy more extensive cover once they understand the value ofbeing insured.111 In effect, MicroEnsure extended its market by finding ways to bringaffordable insurance to previously unreachable groups. For more detail on this case,see report.businesscommission.org.
A joint venture between Nissan and Enel Group is allowing electric vehicle owners
to sell energy back to the grid, empowering consumers and raising the prospect ofmass clean energy storage.112 Hooking Nissan LEAF electric vehicles up to Enel’s
Vehicle to Grid (V2G) infrastructure allows power from distributed batteries to go

49

back into the network. By combining their core capabilities, the companies havedeveloped an offer with staggering potential. The UK’s 18,000-strong fleet of Nissan
LEAFs could contribute the equivalent of a 180 MW power plant if fully integrated,according to Nissan. And if all UK vehicles were electric, they would in effect be a
virtual storage facility with 370 GW capacity – enough to power the UK, Germany
and France.113 Nissan projects that this could save the UK £2.4 billion in electricity
costs by 2030 if fully adopted.114 The environmental gains would be big too:
incentivising more people to switch to electric cars could help tackle urban pollution
and cut CO2 emissions. And by acting as storage units for clean power, electric cars
could help grid managers overcome the problem of irregular renewable energy
generation. For more detail on this case, see report.businesscommission.org.
¡Échale! a tu Casa is a social enterprise based in Mexico that co-designs homes with
low income families and sets up housing committees.115 It sees building communities
as a part of the housing solution. It also buys over 60 percent of building materials
locally and provides employment to local construction workers.116 Under iÉchale!’s
assisted self-building programme, participants receive the materials and technicaltraining necessary to build a small house in a month, with supervision from acertified architect. The resulting homes, made from ¡Échale!’s patented compressed
earth blocks, are designed for minimal energy and water use, making them ecofriendly as well as cheap to run. Green features include solar water heaters, woodsaving stoves and systems to harvest rainwater. ¡Échale! is exporting its technology
to Belize, Egypt, Haiti, Nicaragua and the UAE and developing a social franchisemodel to allow others to replicate its success. Already, 30,000 houses have been built
and over 150,000 homes improved in Mexico alone using its model.117
Pharmaceutical giant Merck is deploying US$500 million on an innovation inits Merck for Mothers programme with an eye on long-term market growth.118 In
Senegal, where contraceptive use is among the lowest in the world and a woman’s
chance of dying in pregnancy or childbirth is still 1 in 61, Merck for Mothers has
teamed up with the Bill & Melinda Gates Foundation, IntraHealth International
and the Senegal health ministry to reboot the country’s contraceptives distribution
system.119 The resulting Informed Push Model (IPM) gets third-party logistics
providers – usually local businesses – to deliver contraceptives directly to healthfacilities and uses tablets to collect data on consumption patterns. Rewards for theprivate suppliers are linked to their performance forecasting and meeting demand,
incentivising them to keep clinics well stocked, and freeing up healthcare workers
to focus on essential medical tasks.120 While the project offers no immediate
commercial gain for Merck, their investment in learning about the local market anddistribution systems that work in these circumstances positions the company toexpand its contraceptive products rapidly in this and similar markets as progress on
the Global Goals opens them up. For more detail, see report.businesscommission.org.

50

3.3 Transforming the way business operates for betterbusiness and a better world
All of the businesses growing in sustainable markets today are progressing on someof the Global Goals. But some are going backwards on others. For instance, zerohour labour contracts are used in some “sharing economy” models in ways that add
to workers’ income insecurity: they couldn’t be counted decent work.
As the Commission’s research showed in Section 2, progress on all the Global Goals
is needed to deliver all their business benefits, making a powerful business as well as
moral case for business leaders to back progress towards all the Global Goals.

"Progress on all the Global Goals is needed to deliver theirbusiness benefits."
Doing this comprehensively implies a transformation in how businesses operate,individually and collectively. Business leaders can take action at four levels to drive
this transformation:•

as individuals, to gain commitment to the Global Goals as a growth strategy
from colleagues and the business community•

through their companies, by making the Global Goals permeate strategy andoperations•

working with sector or economic system peers to shift the sector to sustainable
competition, and•working with government and regulators to shape policies that advance the
Global Goals.

3.4 Gaining commitment from CEOs and boards
A change of company strategy starts at the top. Widespread changes in businesspractice also start with changes in the way company leaders think and behave.
Getting the weight of business behind the Global Goals as a growth strategy depends
on a critical mass of leaders buying into the case, both for business as a whole andfor individual businesses. Then those leaders need to make the case loud and clear totheir fellow board executives within their companies and in the business community.
Members of the Commission are committed to doing this and supporting othercurrent and future business leaders who think the same way.

51

Photocredit: Flickr / unwomen

3.5 Incorporating the Global Goals into businessstrategy
Companies that see the business case – as well as the moral imperative – forachieving all the Global Goals will take a “Global Goals lens” to every aspect of theirbusiness strategy to change the way they operate and put more focus on inclusion.
There are several toolkits to help companies do this. For example, the SDG Compass
report, produced by the Global Reporting Initiative, the UN Global Compact and theWorld Business Council for Sustainable Development, explains to businesses andtheir stakeholders how the Global Goals affect them and offers practical tools for
integrating the goals into corporate strategy.121
Changing the way business operates. To align business with the Global Goals,
businesses will incorporate them not only into their strategic planning, innovation
and business development but every other activity as well, from investment andoperations to marketing, talent management and communications. Taking this
holistic approach extends companies’ strategic horizons, encouraging decisions andinvestments that will deliver long-term gains as the trend towards sustainability
gathers pace.
To change the company mindset fast, companies may appoint a board member
accountable for leading on the Global Goals opportunities and priorities. Some may
go further and specify different board members to lead on “clusters” of the 17 goals
most relevant to the business and where the business can have most impact.

52

Box 2: Ericsson executives champion the Global Goals
World leader in communications technology and services Ericsson has assigned
an ambassador from the executive leadership team to each Global Goal, making
that person a visible champion for innovation and action in his or her area. The
Chief Legal Officer, for example, in charge of Global Goal 16, is promoting peacefulsocieties and access to justice, and has convened a global peer legal network onthese issues.122 Ericsson says its approach to the Global Goals is helping to embedsustainability and awareness of responsible business practices at all levels of thecompany. By tying these challenges directly to executive responsibility, the operator
has made the Global Goals framework relevant to day-to-day priorities, a move itsays is helping it seize new market opportunities that align profit with public benefit.
For more detail, see report.businesscommission.org.

Focusing on inclusion. Incorporating the Global Goals into business strategy
promotes those goals aimed at meeting basic needs and extending social andeconomic development to those now marginalised. The result will be an increased
focus on inclusion in everything a business does. Business can be powerfully
inclusive not only as a creator of jobs with decent work and conditions but also as adeveloper of inclusive services and other innovations that improve the lives of thevery poorest. Three quarters of the world’s absolute poor live in rural areas, where
many company supply chains begin. Sustainable company leaders look for ways tosupport their smallest and poorest suppliers. They work with them to improve theirproductivity, invest in their skills, build their resilience, improve their access tocredit, and as far as possible, ensure that no one is left behind. The ten principles of
the UN Global Compact, developed to help businesses do the right thing, is a helpful
guide here.123 And business can do a great deal to promote inclusion through business
innovation. (See Box 3: How businesses are promoting financial inclusion.)"3/4 of the world's poorest live in the same rural areas where
many supply chains begin."Box 3: How businesses are promoting financial inclusion
Several financial service firms, often with digital partners, are extending thefinancial system to people on low incomes previously denied its benefits: a safe place
to save, insurance to manage household and business risks, credit and payment

53

platforms. Between 2011 and 2014, 700 million people became account holders
at banks or other financial institutions for the first time, reducing the number of“unbanked” adults by 20 percent to 2 billion people, according to the World Bank.124
In Kenya, 43 percent of GDP in 2013 flowed through Safaricom’s M-Pesa system,
which supported over 237 million peer-to-peer transactions, more than any othersuch system in the world.125
Finance companies are also financing inclusive services in other sectors. The AbraajGroup is planning to invest in delivering high quality, mass-market healthcare forlow and middle-income groups, particularly in Africa and South Asia, with the goalof optimising profitability while achieving measurable social impact.126 Recognisingthat existing health systems are hampered by weak funding, infrastructure andskills, Abraaj is planning to take an integrated approach – creating networked“ecosystems” of facilities from tertiary hospitals to labs and imaging centres that canwork together to make the most of the resources they have. By connecting facilities
and personnel across specialisms and geographies, for example, through telehealthand doctor exchange programmes, the idea is to find synergies that can boost thequality of care while saving money for both providers and consumers. If the fundachieves its goals by 2020 as planned, it could see 14 million patients in its hospitals
each year, 54,000 hospital employees delivering quality care across the networks and
275 diagnostic centres providing much-needed pathology and imaging services acrosstarget markets.127 It will also provide 10,500 additional hospital beds. For more detailon this case, please visit report.businesscommission.org.
Companies outside the finance sector are extending financial inclusion too. Several
multinational firms now offer supply chain finance to small and medium-sized
suppliers in their value chains, many in developing countries. This give​s​small-scale
entrepreneurs access to credit on much more advantageous terms than they could ​generally ​get based on their personal credit scores.
Financial inclusion can be a particularly powerful driver of gender equality, acrucial area for progress given the global gap between genders in their accessto financial services: in 2014, 65 percent of men had a bank account, but only 58
percent of women. The gap is especially pronounced in South Asia, where there isan 18-percentage point difference between men and women – twice as high as in
Sub-Saharan Africa.129 Promoting women’s access to financial services, as well as todigital and property assets more broadly, are key areas where business can drive a
better gender balance.

Different companies will have different ways of reducing poverty and promoting
inclusion. But one commonly effective tactic will be to pursue gender equality within54the company and through its supply chains and direct suppliers, as well as expanding
business opportunities that promote gender equality. That could involve publishing
the company’s gender profiles from top to bottom, covering both pay differentials
and how women and men are represented at each level of seniority. Companies can
ask their top suppliers to do the same. And they can progressively embed the UN’s
Women’s Empowerment Principles throughout their activities.130 These Principles
help companies to tailor existing policies and practices or establish new ones toachieve gender equality in their businesses. (See Box 4: Pursuing gender equality isdriving business growth.) A new resource that will strengthen companies’ work in thisdirection is “Leave No-one Behind”, the first report from the High-Level Panel on
Women’s Economic Empowerment that outlines drivers to advance gender equality.131

Box 4: Pursuing gender equality is driving business growth
Worldwide 200 million fewer women than men own a mobile phone.132 A significant
proportion of these women live in markets where Vodafone operates already,prompting the telecoms major to trial a new business model in Turkey. Vodafone has
been incentivising women in Turkey to buy mobile plans and then using the network
to find education and work opportunities. Using its advertisement service, women
without much tech know-how can access one of Turkey’s biggest e-marketplaces.
After launching in 2013, the service generated 4,700 adverts in its first nine months,
triggering average sales of US$51 per user.133 As of September 2016, the programme
has reached nearly 670,000 women. Vodafone meanwhile attracted 75,000 womencustomers, 15 percent of them new to the operator. Vodafone’s 2014 Connected
Women report estimates that Women First could generate economic benefits worth
US$22.3 billion a year to 153.8 million service users and wider society in Vodafone’s
emerging markets by 2020. For more detail on this, see report.businesscommission.
org.

3.6 Accelerating sectoral shifts to sustainable
competition by working with peers
Business leaders that choose to align their strategy with the Global Goals anticipate
that, sooner or later, their business will start to incur costs that their competitors
don’t face. This is true across all industries. In commodity sectors, current low
prices are aggravating cost pressures, making it hard for progressive businesses to“internalise” environmental or social costs that competitors are not willing to bear.
Even in more differentiated sectors, such as consumer goods, cost pressures areintense, partly because of slow growth in middle-class purchasing power.

55

Consumers in general rely on companies to meet basic environmental and social
standards in their operations, allowing them to get on with hunting down thebest value. They don’t pay attention to how products are made every day: only
on the whole, when they are alerted to a human tragedy such as the building
collapse of a Bangladeshi garment factory.134 To read this case study, see report.
businesscommission.org. This makes it very difficult for an individual company toraise its standards on its own, even though many might want to be better employers
and stewards of the environment. All the players have to agree to raise and maintainstandards at the same time to keep the playing field level. Such collective approaches
are essential to shifting a sector or value chain on to a sustainable growth path. The
risks of delaying them are growing.
Finding new ways to work with peers. Recent years have seen a number ofsuch collective approaches. They range from sector-specific schemes, like theInternational Council on Mining and Metals’ transparency principles and thechemical industry’s Responsible Care programme, to cross-industry forums, such as
the World Business Council for Sustainable Development (WBCSD).135

Photo credit: Flickr / ciat

56

Many sectors are agreeing “pre-competitive” standards of conduct that reduce therisk for individual players of making changes and investments that anticipate asustainable world. For instance, in 2010 the Consumer Goods Forum engineered acommitment from sector players to work towards zero net deforestation by 2020,
and to develop action plans for sustainable sourcing of commodities including palmoil, soya, beef, and pulp and paper.136 For more detail, see report.businesscommission.
org. Similarly, the Global Agri-Business Alliance is developing a pre-competitive
agreement across the agriculture sector to improve rural livelihoods (especiallyamong smallholder farmers), mitigate climate change, manage natural capitalsustainably and contribute to global food security as well as contributing towards
other Global Goals.137
Not all such collaborative initiatives have been effective, and few so far have targeted
Global Goals specifically. However, this is changing. For example, the GSMA, which
represents mobile operators worldwide, has developed a comprehensive plan forthe sector to maximise its contribution to the Global Goals.138 It identifies the four
goals on which the mobile industry has most impact – Innovation and Infrastructure(Goal 9), No Poverty (Goal 1), Quality Education (Goal 4) and Climate Action (Goal13) – and describes ways the mobile industry can change its participants’ behaviours
to accelerate progress against these goals. It also identifies the biggest challenges
they may face and collective commitments that will help to unify action as much as
possible. GSMA’s plan is arguably a first-of-a-kind and one that other sectors canlearn from.

"GSMA's comprehensive plan for the Global Goals is the first of its
kind."In addition to agreements assuring collective high standards of sustainable conduct,
players in all sectors will benefit from developing detailed “roadmaps” to guide theirsector’s shift to sustainable development in line with the Global Goals. They alsoneed to assess the impact of that shift on progress towards the environmental andsocial Global Goals relevant to the sector. For example, if players in the agribusinesssector were initiating a sector shift to sustainable aquaculture, they would analyseboth its environmental impact through its effect to reduce overfishing and its social
impact through its net impact on job numbers. (See Box 5: Child labour in the cocoa
sector in Ivory Coast: the case for a roadmap.)57

Box 5: Child labour in the cocoa sector in Ivory Coast: the case for a roadmap
Ivory Coast produces 35% of the world’s cocoa.139 It also has 1.2 million childlabourers in its workforce, almost all of them working in cocoa production.140 About
55 percent of children working in the country’s agriculture are subject to forced
labour and 65 percent have been trafficked: only five percent of all child workers arepaid and less than half are enrolled in school.141
Systemic features of the Ivory Coast cocoa market compound the problem. These
include a fiercely competitive market structure, inadequate education, regionalmigration, lack of child registration and a national budget for anti-trafficking policeof only US$7,700.142
National and international measures to tackle the issue haven’t worked so far.
However, the necessary conditions are in place for an effective coalition to form
between the many actors concerned about this issue. These include CocoaAction,143
an alliance of the world’s leading cocoa and chocolate businesses with US$500
million in funding and the support of other key industry actors, active civil society
groups that are willing to collaborate with businesses and farmers, and the country’s
first lady, a national figurehead. Mechanisms and technologies that can tackle
market features encouraging child labour are emerging, among them mobile money,
electronic child registration, CCTV and other low cost, incorruptible monitoring
systems. The next step is for all the parties involved to co-ordinate on drawing up
a roadmap to a sustainable cocoa industry that neither exploits children nor leaves
them unsupported.

To create a Global Goal sector roadmap, key stakeholders, led by business, can work
together to:

1. Develop a vision of what a sector would look like by 2030 if the Global Goals
were treated as a strategic framework for better growth. While each sector will
naturally focus on certain goals, the roadmaps will also need to address the
crosscutting goals that relate to basic human rights.

2. Map out the biggest, most urgent areas of change needed to realise the vision:
which specific markets and value chains need to grow two to three times fasterthan the current sector average? Which activities need to peak and shrink?
What will drive the most efficient redeployment of resources and allow for a justtransition?

3. Outline potential solutions to these urgent issues, the new technologies andbusiness models, new products and services that will meet consumer needs

58better while also solving societal problems. Stakeholders need to understand thetipping points in any specific market that must be reached to take any of thesesolutions to scale.

4. Describe potential barriers to solutions and analyse options for overcoming
them that would be fair to all the sector players involved and to their workforces
and people in their supply and distribution chains.
The Commission’s work on the food and agriculture economic system illustrates how
such a Global Goal roadmap could help transform markets. The sample roadmap
below gives an idea of what the details of a future sustainable economic systemcompared to its current state might look like.

Box 6: Example: What might a Global Goal roadmap for the food andagriculture system look like?
1. Vision
The food and agriculture system could capture sustainable opportunities in five
key areas: i) inputs, ii) production, iii) food processing, iv) logistics and v) retail anddisposal – in each of which, a shift from the status quo to a new, sustainable system
would be envisioned.
2. Change map
The biggest changes will need to be made in:• Growing markets which serve low-income consumers, create sustainably
sourced products and focus on new breeding techniques / microbial
fertilisers; and• Lowering the amount of food loss along the production and supply chain,and shrinking the market size of products that use a lot of water, energy
and land in their production.
See Box 6: Roadmap to a sustainable food and agriculture system: the vision on the nextpage.
3. Solutions
These could include a combination of:• Engaging with public policy, e.g. pricing of environmental externalities
to move from resource-intensive production and encourage production
with lower environmental costs;• Innovating products or services, e.g. assisting smallholder farms in
implementation of new technology and better irrigation systems to movefrom limited innovation in production to “big data farming” and more

59

Roadmap to a sustainable food and agriculture
system: the vision
Value Chain Area

Current Value

From…

To…

•
•

•
•

(US$ Billions)
Inputs520••

Production

2,175

•
•
•
•
•
•
•
•
•
•

Food processing

Logistics

Retail & disposal

1,377

>300

7,180

•
•
•
•
•
•
•
•

Traditional fertilisers
Limited public/private
collaboration
Basic cross-breeding•

Aqua- and land-based
feedstocks operating in silos•

Water, energy and land intensive
products (e.g., beef)•

Forest degradation throughunsustainable farming practices•

Heavy deforestation products(e.g., unsustainably sourced palmoil)•Arms length dealings withsmallholder farmers
Loss-making fishing fleets•

Limited monitoring of animal
welfare•Low water-efficiency agriculture•

Limited innovation in production
Low data, traditional farming
Farming remote from markets

High food waste processors
High sugar/fat products
Unfortified food production

Limited storage systems
Limted traceability

Limited consumer differentiation
for sustainable products
Low food safety focus
High levels of food waste

•
•
•
•
•
•
•
•
•
•
•
•

Microbial fertilisers
New PPPs focused on adapting
technology to local conditions
Precision phenotyping andbioinformatics
Consideration of sustainability of
blended approach of aqua- andland-based feedstocks

Focus on crop and meat
selection with lower
environmental footprint
Sustainable forestry
management (e.g., agroforestry,
reduced impact logging)
Sustainable agriculture
approaches (e.g., holistic grazing;
low till/no till agriculture)
Contract farming and new
partnership models
Sustainable fishery models/aquaculture
Animal health monitoring &diagnostics
Micro-irrigation techniques
Precision agriculture
Big data farming
Urban farming

Low food waste processors
Product reformulation, low fat/sugar products
Food fortification

Cloud storage systems
Fully traceable product systems

Sustainably sourced and fairtrade products
Food safety as business
opportunity
Composting and energy capture

Source: International Resource Panel; Anterra Capital; AlphaBeta analysis

60

•

•

•

use of micro-irrigation techniques;
Driving sustainability through supply chain, e.g. funding research
into new, less damaging farming techniques, to move from “heavy
deforestation” products to sustainable forestry approaches such as
holistic grazing;
Changing consumer behaviour, e.g. engaging with consumers to change
their food waste management and move from high levels of food waste tocomposting and energy capture; andPublic private partnerships, e.g. partnering between public sector andprivate sector to decrease incidence of non-communicable diseases suchas obesity and diabetes, moving from high sugar / high fat products toreformulated low sugar/low fat products.

4. Overcoming Barriers
For example, a potential challenge is the adoption of pricing of environmental
externalities: national-level pricing policies could prompt companies to move
operations to countries with more lenient price policies (i.e. lower cost forcompanies). Potential solution would be supranational/global policy on pricing ofenvironmental externalities to minimise risk of a “race to the bottom”.

The growing risks of delay. No group of sector peers has yet developed such a
detailed roadmap and some may find it hard to imagine. But the risks to establishedbusinesses of not having one are growing. If industries don’t take the lead, then it ismuch more likely that governments will take drastic action.
As well as multiplying new opportunities, sector roadmaps will help incumbents
manage the risks of a shift to sustainability in their sector. To illustrate, lacking
a roadmap, companies in several areas of the power sector have been unprepared
for the speed at which the shift towards renewable energy has disrupted theirprofitability. One casualty, German utility E.ON, had to write off €2.9 billion on thevalue of its power stations in August 2016 as a result.144
Similarly, with a few notable exceptions, companies in the fossil fuels sector havestruggled to develop a compelling, science-based description of the sector’s longterm role in a world taking steps to limit global warming to well below two degrees.
Today, the sector is waking up to the scale of stranded assets those steps imply
and the risks these could pose to their owners and the financial system. According
to data compiled by Bloomberg, already over half of all assets in the global coalindustry are held by companies that are either in bankruptcy proceedings or don't
earn enough money to pay their interest bills.145 A number of leading companies in61the oil and gas industry are now developing a collective action plan to reduce fugitive
methane emissions and make progress on carbon capture, use and storage. The mostfar-sighted are publicly exploring scenarios envisaging peak oil demand within thenext 5-15 years and peak coal demand before 2020. But many of the incumbents have
yet to reinvent a profitable future for themselves in a zero-carbon world.
Without more radical purposeful change, more traditional energy companies could
become casualties of the transition to a world in which sustainable development is
as central to every business as digital technology is today. They may not be the only
ones. Consider the food value chain. If 10 years from now the public health costs ofobesity are still spiralling and the food industry has failed to lead on solutions, could
it absorb the drastic measures that governments might take, such as strictly enforced
sugar taxes? Or stringent penalties for wasting food, should the world experience
more food price spikes like those of 2011?

3.7 Shaping public policy
Business’ cooperation with governments on policies directed at the Global Goals willbe critical to achieving them. Policies determining how to factor environmental andsocial costs into the prices that companies and customers pay will shape competition
in expanding sustainable markets. So will public/private collaboration to accelerateinnovation.
Advancing policy on pricing externalities. All companies make decisions basedon the economic signals surrounding them, such as the price of labour and materials
and the cost of taxes, as do consumers. As noted in Section 2.4, today’s prices don’ttell companies or consumers the truth about environmental or social externalities.
Until they are priced in, even businesses that want to be part of the solution arecondemned to be part of the problem – stuck on the same, skewed playing field as
everyone else.

62

E XHIBIT 12:

Negative profit margins in most of the world's raw
material industries if natural capital costs are included
Profit margin (EBIT) before and after natural capital costs, based on top-two
companies in Morgan Stanley Composite Index category, Percent, 2012

Before

15
9

11

15
11

9
5

3

3
After

9

5

11
3

-1

-1
-6

-8

-11
-78
-165
CattlefarmingWheat
farming

CementSynthetic
fertilizer

Paper-board SilverminingBauxiteminingIron & steel

Non-ferrous metals
smelting

Coal power
generation

Source: Adapted Iron: Taxcost and TEEB (2013)

63

The numbers involved are immense (Exhibit 12). In 2012, a major analysis of unpriced
environmental costs in the global economy looked at every primary production andprocessing sector – from agriculture, forestry, fisheries, mining, utilities and oil andgas exploration to cement, steel, pulp and paper, and petrochemicals.146 Across these
sectors, it found total environmental externalities of US$7.3 trillion were unpriced in2009 (the last year for which complete data was available), equivalent to 13 percent
of global GDP in that year, or nearly half of US GDP at the time.147 The truth aboutsocial and environmental costs is also concealed by price subsidies. Economies acrossthe world continue to subsidise fossil fuel consumption, in direct conflict with theurgent need to tackle climate risk. 2014 fiscal fossil fuel subsidies were estimated at
US$550 billion, around 20 percent of the net cost of financing the Global Goals.148 In
addition, local air pollution is costing the equivalent of between 2-10 percent of GDP
across G20 countries, based on the most recent estimates of the WHO and IMF.149"$7.3 trillion in environmental externalities went unpriced in 2009,
13% of GDP."
Some CEOs accept that an explicit carbon price of US$50 a tonne within the next
five years, and up to US$100 a tonne by the second half of the 2020s, is essential tokeep global warming below two degrees. The most forward-looking business leaders
are anticipating the impact on their business costs when the true environmental
costs of other activities is reflected in prices, for instance, the real cost of using
unsustainable fresh water, sending waste to landfill, wasting food, polluting the airor ground and producing the most resource intensive foods. (See Box 7: Sustainable
development scenario drives Telefonica’s energy strategy.)Box 7: Sustainable development scenario drives Telefonica’s energy strategy
Major telco Telefonica has decided to source 50 percent of the company’s energy
consumption from renewable energy by 2020 and to grow that share in the longer
term.150 Telefonica has pursued ambitious energy efficiency and emissions targets
for many years largely because energy forms a large chunk of any telecommunicationcompany's operating expenses. But new drivers lie behind its new energy strategy.
First, clean energies are becoming more and more competitive as energy markets
respond to mounting regulatory pressures arising from the Paris Climate Agreement
commitments and reinforced by the Global Goals. Second, Telefonica’s customers aredemanding that the company reduce emissions linked to the services it provides.
Setting medium- and long-term targets for renewable energy allows the company to
set itself science-based emissions targets, effectively decoupling company growthfrom emissions growth. It is also protecting itself from future regulatory shocks,

64such as mandatory carbon pricing. And while the strategy, of course, continues toaim for lower operating expense, it means Telefonica can focus on offering services
that allow customers themselves to become more energy efficient, giving it a further
competitive advantage.

There is a good case for businesses to contribute to systematic approaches that tackle
the set of issues linked to pricing externalities, which cross the public and private
sectors. For instance, a number of governments, multi-lateral institutions, financial
players and companies have come together to form the Carbon Pricing Leadership
Coalition.151 This encourages the development and international diffusion of bestpractices on carbon pricing. Getting carbon prices right will be critical to keeping
global warming well below two degrees. It could also provide the test-bed for a morecomprehensive alliance on externality pricing, especially given linkages between
carbon pricing and food security.
The issue of pricing externalities is not limited to environmental challenges. Just
as investors are increasingly concerned about stranded assets as a result of tougher
environmental requirements, they may also become concerned about the earnings
quality of companies that incur significant social risks to maintain profits, forinstance by paying poverty-level wages or generating conflict with local communities
over rights to access land and other resources. The World Business Council for
Sustainable Development is developing a new Social Capital Protocol to enablebusinesses to measure and value their interactions with society. The Council ispiloting the protocol approach in three areas: employment, skills, and employment
conditions that meet safety standards which show respect for workers.152 Companies
across a range of sectors – from mobile telephony through to pharmaceuticals – arealso exploring forms of “social pricing” to make essential goods and services withrelatively high margins available to poorer consumers at closer to cost price. For
some products, such as drugs, there is a risk that the “socially priced” product willleak into the rest of the market. However, companies are finding more and betterways to handle this risk, expanding the scope for social pricing.
CEOs have a choice. They can do nothing and hope that governments
won’t regulate prices in their sector, although the trend towards more accurate
pricing of environmental costs is emerging. They can try to prevent regulation
through lobbying or financing the campaigns of politicians who oppose it, at the riskof damaging their reputation and losing stakeholders’ trust.

"Businesses can reduce the risk of regulatory change by leading itthemselves."

65

Or they can reduce the risks of regulatory change by leading it themselves – as in
the run-up to 2015’s COP21 climate summit in Paris, when enlightened CEOs came
together under the unified umbrella of We Mean Business to demand governments
set a more predictable, ambitious and longer-term agenda. Progressive leaders are not
waiting for governments to act on price before doing anything. Some have alreadystarted to “shadow price” social and environmental costs in internal accounting, ineffect preparing for the future in which markets are sustainable.
America’s fourth largest craft brewery, the New Belgium Brewing Company, offers an
example of the benefits of this approach. The company has adopted its own internal
electricity tax – charging itself 2.4 cents for every kilowatt-hour of power generated
from fossil fuels that it consumes.153 The tax creates a powerful incentive to use clean
energy. Already, much of the firm’s electricity is generated onsite, and all purchased
power comes from wind. The “tax” revenue also provides a source of capital for
future investment in sustainability – it goes into a fund for further renewable power
development and energy saving measures. For more detail on this case seereport.businesscommission.org.
Advancing public/private collaboration to scale innovation. Innovation
partnerships between public, private and academic partners have been critical totransforming scientific discovery into mass-market products and services in publichealth, clean energy and nutrition among other areas. They will be essential todelivering the speed and scale of innovation needed to achieve the Global Goals.
Economists have recently provided powerful evidence of how the public-privateacademic “innovation ecosystem” has led to astonishing social and private returns
across a wide range of sectors.154
In pharmaceuticals, for example, the Global Alliance on Vaccines and Innovation(Gavi) provided strong incentives for private companies to come into developing
vaccines for tropical diseases.155 It also provided “advance market commitments”
that encouraged companies to invest in the manufacturing facilities and cold chain
logistics needed to provide pneumococcal, rotavirus and pentavalent vaccines,
among others, in Sub-Saharan Africa.156 By taking away market and demand
uncertainty from the vaccine suppliers, the Gavi facility also made it possible to bring
down supply costs dramatically. The facility was largely financed through future
overseas development assistance (ODA) commitments that were then translated into
a social impact bond.
On clean energy, governments representing 20 participating countries havecommitted to doubling the average share of research and development on clean
energy (currently around 0.1 percent of GDP) in public budgets.157 They have also
set up a coordination mechanism – Mission Innovation – whose design will allow
for much more strategic alignment and prioritisation across countries.158 In parallel,

66

Photocredit: Flickr/
morganmorgan

a number of the world’s leading philanthropists have come together to form the
Breakthrough Energy Coalition.159 This is now creating a new kind of long-term
innovation fund. With a 20-year lifespan, a 10-year investment period and very
substantial resourcing from its founders and their networks, it is bringing the best
scientific and commercial expertise together to back the next wave of clean energy
technologies. The two initiatives – Mission Innovation and Breakthrough Energy –will coordinate their activities and expand their innovation ecosystem by inviting
leading corporates, financial institutions and other entrepreneurs to participate.
For more detail see report.businesscommission.org.

"20 countries in the EU will double the average share of public
R&D in clean energy."
These are examples of a wide range of mechanisms now being used to accelerate
the development of new products and services aimed at specific societal goals.
Many countries have very substantial public resources committed to this “missiondriven” approach to innovation – notably the US, whose DARPA and ARPA-E
platforms have made critical, catalytic interventions in disruptive technologies
ranging from the internet through to the autonomous vehicle.160 Another example
is the Danish-led initiative Global Green Growth Forum (3GF), which currently
convenes 23 such partnerships.161 The private sector has much to gain frompartnering with such initiatives.

67

4. SUSTAINABLE FINANCE
Key Points•

Unlocking the US$2.4 trillion a year additional investment needed toachieve the Global Goals depends on orienting the global financial
system towards long-term sustainable outcomes.

•

In principle, there is no shortage of capital given that total financial
assets stand at more than US$290 trillion and are growing by five
percent a year.

•

However, investors place a high premium on liquidity in their choice ofassets, despite mounting evidence of the long-term outperformance ofmore sustainable investments.

•

Three critical areas of action for business leaders to unlock Global
Goals investment are:•Creating an open-access and standardised system for companies
to report on their performance on the Global Goals and enable
sustainability benchmarking;•Plugging the global infrastructure gap with a massive scale-up in
the availability of blended finance to share risks between public andprivate investors; and•Aligning financial regulation with the Global Goals, extending thework of the Financial Stability Board’s Taskforce on Climate-Related
Disclosures, and helping to make sustainable asset classes moreinvestible at lower cost.

Business leaders who adopt the Global Goals as a growth strategy can do a lot to
unlock the significant amount of long-term public and private investment needed toachieve them. The UN Sustainable Development Solutions Network (SDSN) values
the total additional investment needed to achieve the Global Goals in all countries
at US$2.4 trillion a year, around 11 percent of annual global savings, with the lion’sshare – around US$1.6 trillion – needed for infrastructure.162
There should be a big enough supply of capital available to finance the Global Goals.
Financial assets currently exceed US$290 trillion and are growing at five percent a68year.163 Nearly US$100 trillion is invested in pension funds, insurance companies andinvestment funds, including sovereign wealth funds.164 As of November 2016, over
US$11 trillion was invested in negative yielding sovereign bonds – capital that could
be invested more productively elsewhere.165
However, that seemingly ample capital supply won’t meet the investment demand
generated by the Global Goals without major changes in the financial system. The
main trouble is that too many investors want immediate results. Over half of CEOs
report feeling under pressure to deliver financial results within a year or less, leading
many to prioritise immediate shareholder rewards over investments for the future.166
Achieving the Global Goals depends on aligning the global financial systemwith sustainability and long-term outcomes. But the financial system consistsof tens of thousands of institutional participants – including regulators, banks,
insurance companies, stock and bond exchanges – and billions of individual market
participants.
Lengthening the investment horizon of so many market participants andattracting them to sustainable investments in line with the Global Goals requires
clear thinking, individual and sectoral action and unprecedented collaboration
between the public and private sector. The financial sector is highly innovative andresponsive to opportunity (see Box 10: Innovations in finance that can progresssustainable development). The Commission has identified three areas of action forbusiness leaders to pursue in response to the Global Goals opportunities:
standardising and simplifying sustainability reporting; unlocking public and private
investment in infrastructure; and aligning financial regulation and investment
principles with sustainable development.
Rapid progress in these three areas will help investors, businesses and governments
to achieve the universal benefits of sustainable development in a joined-up fashion,and to share in those benefits themselves. But we recognise that financial customs
and investment communities differ in different jurisdictions: the actions we suggest
under the principles below are to be refined and adapted appropriately.

4.1. Simplifying reporting of environment, social andgovernance (ESG) performance
Research shows that companies managed with a long-term ESG-friendly approachand a clear focus on sustainability perform better financially than those that aren’t.
A study by Harvard and London Business Schools found that a dollar invested in691993 in a value-weighted portfolio of high sustainability firms would have grown to
US$22.60 by 2010, compared with US$15.40 for low sustainability firms.167 Growing
numbers of financial sector leaders recognise the investment case for sustainability.
Signatories to the UN Principles for Responsible Investment accounted for US$59
trillion of assets under management as of April 2015, a 29 percent year-on-yearincrease.168"Taking action on climate change is the 'new normal' for investors."
Many institutional asset owners – particularly pension schemes and insurancecompanies – are alive to the potential of their money to influence the wider economic
system. For instance, in late 2016, HSBC placed £1.85 billion of its UK employees’
pension savings into an environmentally-friendly fund.169 The HSBC pension fund’s
chief investment officer described taking action on climate change as “the newnormal” for investors.
However, it isn’t easy for investors to discover which investments will have the mostimpact on sustainability. If all companies financed by the system were paying “real”
prices reflecting the true costs of externalities (see Section 3.7), then investors andtheir financial intermediaries would be able to compare companies’ sustainability
performance by comparing their financial performance. But achieving accurate
prices across the economy will take time. Until then, investors rely on companies’
ESG reporting to compare their sustainability performance. Unfortunately, there areas yet no agreed standards for measuring sustainability performance equivalent tointernational accounting standards, and no publicly available or recognised league
tables, making that comparison difficult.
The past 15 years have seen significant growth in disclosure of corporate
performance on sustainability. There has been a huge rise in interest in responsible
and sustainable investment among asset managers and owners and rapid growthamong companies providing ESG analysis, such as Vigeo, EIRIS, MSCI and
SustainAlytics. Now 92 percent of the world’s 250 largest companies report onsustainability.170
Most fund managers now claim to include assessing ESG performance in theirinvestment process. However, even the largest institutional investors with teams of
30-40 professionals in their ESG units, can only cover ESG for 1,000 companies inany serious way, in an investible universe of up to 30,000 companies. The challenge
is an order-of-magnitude higher for smaller investment houses.

"82% of CEOs are unhappy they can't compare sustainability
reporting between peers."

70

The lack of a standardised system for reporting on ESG performance is the main
reason ESG analysis is time-consuming and expensive. In its absence, different
companies use different reporting standards. There’s the international Global
Reporting Initiative, country-specific schemes like the UK’s Connected Reporting,and principles ranging from the UN Global Compact to the OECD’s Guidelines forMultinational Enterprise. There are also quality standards, like ISO 26000 on social
reporting; issue-specific standards like those of the Carbon Disclosure Project;reporting frameworks that focus on materiality, like the Sustainability AccountingStandards Board’s; and ones that focus on broad brush strategy, like the International
Integrated Reporting Council’s approach.171
This profusion of frameworks is a headache for investors, 79 percent of whom say
they are unhappy with their ability to compare sustainability reporting between
companies in the same industry.172 CEOs lose out too. When everyone uses different
frameworks, there’s no way to benchmark performance against competitors, or use
high performance scores to build trust among customers, staff and the public. And itis harder to make the quantitative case that investing in sustainability brings better
returns.
Moreover, much of the existing analysis of relative corporate ESG performanceremains inaccessible to individual asset owners and civil society because of highpaywalls, lack of transparency in methodology, or the complexity of reporting. As
a result, individual investors and civil society cannot hold companies effectively to
account for investing in and promoting good corporate performance on sustainable
development. And companies have insufficient motivation to improve on theircorporate sustainability performance.
The Commission believes that publicly listed companies should decide on
simple, clear metrics to report annually to stakeholders. These metrics should bestandardised across industries and geographies to allow for easy comparison by
investors. We will advocate to investors to monitor progress in this direction and tobuild these metrics into their ESG assessment of companies. We urge other businessand financial service leaders to do the same.

"The Commission supports building corporate Global
Goal benchmarks."
We strongly support the creation of corporate Global Goal benchmarks that
harmonise and build on existing corporate reporting requirements and frameworks.
Once companies report consistent data over time, comparable with others in theirrespective sectors, benchmarks can be developed. From this position, it is a shortstep to compiling “league tables” of company progress towards alignment with the71Global Goals. Such tables would for the first time enable the leaders and boardsof companies, policymakers, civil society and retail investors to quickly and easily
compare the relative performance of companies within a sector, over time, on a range
of Global Goals relevant to the sector. This process would need to be governed byan independent, non-political institution, to ensure no conflicts of interest from theprivate or public sector.
The greater the number of companies in a sector participating in and leading thisprocess, the more relevant the Global Goal benchmarks will become to all thecompanies in the sector. A well-designed benchmarking process allows individualcompanies to decide for themselves how to develop sustainably, in line with the
Global Goals, while at the same time setting them all on a competitive “race to thetop”. The global insurer, Aviva, has proposed such a concept and its proposal has
been endorsed by the UK government. (See Box 8: Transparent reporting starts a race
to the top for a forerunner in the pharma sector.)

Box 8: Transparent reporting starts a race to the top
The Access to Medicines Index provides a model for benchmarking performance
related to Global Goals.173 The index, published every two years by non-profit
foundation Access to Medicines, analyses the performance of the top 20
pharmaceutical companies on improving access to medicines, vaccines anddiagnostics in low- and middle-income countries. Making this sector datatransparent motivates all the companies in the group to make their products moreaccessible. In effect, it has started a “race to the top” on the issue in the sector.

More broadly, financial actors can strengthen sustainability teams and make suresustainable development is at the heart of their dialogue with business leaders, notjust the “back page”. Businesses leaders can help to clarify this dialogue by making
statements of their strategy for long-term value creation and describing in explicit,
quantitative terms how their investments in new business models, products andvalue chains related to Global Goals will drive improvement in the bottom line,
reduce risks and improve the quality of earnings. Business leaders should also
educate and encourage stakeholders to look beyond some of the quarterly reporting
items and focus on the basis of the business’s longer-term sustainability. More boldly,
some business leaders may choose to end the practice of issuing earnings guidanceand quarterly profit reporting altogether.
Lastly, driving progress in this direction would be an appropriate responsibility togive to a non-executive board director accountable for implementing a company’s

72strategic alignment with the Global Goals (see Section 3.5). Investors can directly
support the appointment of a director with this responsibility wherever they have avote in the election of board directors. Corporate Governance Codes, in particular,
the G20/OECD Corporate Governance Principles, could also advocate this approachto leadership responsibility for advancing sustainable investment.174

4.2. Unlocking infrastructure investment
Investment in sustainable infrastructure is the type of investment most criticalto achieving the Global Goals: gains from most other types of investment dependon the supporting infrastructure being in place. Economists generally consider
infrastructure investment as a key to growing the productive capacity of an economy.
The IMF has estimated that in advanced economies, a one percentage point increase
in infrastructure investment leads to a 0.4 percent rise in GDP in the first year and up
to 1.5 percent rise in GDP four years out.175 According to some estimates, a one
percent increase in infrastructure spending could increase employment in India by
3.4 million jobs.176
To achieve the Global Goals, infrastructure is needed in a range of sectors – energy,transportation, agriculture, water – and in many forms, from schools and hospitals
to broadband networks giving high-speed Internet access. However, unlocking theinfrastructure investment needed to achieve the Global Goals requires tackling the
obstacles that are choking the flow of capital to infrastructure generally.

"Over 70% of needed infrastructure investment will be in emerging
and developing economies."
The total estimated infrastructure investment needs across the global economy
amount to US$90 trillion over the next 15 years, or approximately US$6 trillion
per year.177 Over 70 percent of the projected investment will be needed in emerging
and developing economies.178 Such large infrastructure investment could have theadditional benefit of reigniting global growth However, based on current levels
of investment from public and private sources, the next 15 years will see a US$2-3
trillion annual shortfall in infrastructure investment.179 (These are higher estimates
than the SDSN figures mentioned earlier due to differing methodologies, but bothshow a significant, multi-trillion dollar investment gap in global infrastructure.)
Exhibit 13 shows possible sources of finance to fill the gap.

73

E XHIBIT 13:

Proposed annual incremental financing fromdifferent sources to close infrastructure gap
US$ trillions, constant 2010 dollars
1.10-1.50.15-.20

6.00

0.05-0.10

1.10-1.50

2.00-3.00

Current investment

Governments

Private Sector

MultilateralDevelopment Banks

Overseas
Development
Assistance

DemandSource: New Climate Economy: Driving sustainable development through better infrastructure: key elements of atransformation program.

Making good the shortfall from these sources – and in the process ensuring that
Global Goals infrastructure projects are fully financed – will require a significant
overhaul in infrastructure financing mechanisms globally. The current architectureof public and private financing for core infrastructure is not yet up to the task.
Historically, there has been a sharp distinction between, on the one hand, public
sector projects funded by governments, multilateral development banks (MDBs)
and overseas development assistance (ODA), and on the other hand, private sector
growth funded by commercial banks and private investors.
One solution is to make greater use of the ability of development finance institutions(DFIs), which include the MDBs together with sovereign wealth funds (SWFs),
to mobilise much more private finance, including through blended finance. Thisemerging practice involves the strategic use of public capital to leverage multiple

74amounts of private capital. Specifically, blended finance entails public funders using
market-driven risk mitigation tools to mobilise multiples of additional private capital,
as outlined in the work of the Redesigning Development Finance Initiative, led by
the World Economic Forum and the OECD.180 It is a striking example of the conceptof “billions to trillions” coined during the 2015 Spring Meetings of the World Bank
Group and IMF.181 The concept envisages converting billions of official development
assistance into trillions of private capital supporting investment in developing
countries.
Other obstacles currently restricting infrastructure financing include a shortfall in
DFIs’ lending capacity, lack of private investment generally, lack of focus on project
preparation, poor legal frameworks and protection for private investors, and thelimited availability of a liquid asset class for private investors.
Closing the global infrastructure investment gap needs long-term thinking andgreater collaboration between public and private entities, from the project-level up to
institutions. The Commission believes that business and financial sector leaders cancontribute to closing the gap in the following ways.
First, they can advocate for different kind of public sector engagement ininfrastructure in many regions of the world. Historically, most infrastructure
spending has come from public sources. However, as noted above, many developed
countries, like the United States, have significantly decreased public expenditure on
infrastructure. Governments may be constrained in putting a lot more money into
infrastructure at present but they can do three other things to make sure projects inline with Global Goals get the funding they need. They can attract more finance fromother sources by being more consistent in how they structure the finance for major
projects. For example, they can take on unusual planning or unproven technology
risks, reducing the risk for other investors. They can improve legal frameworks andprotections for private investors. And they can increase the credibility of public
institutions involved in executing projects on the ground. Business leaders should
advocate strongly for these practical actions that would enable greater private sector
participation in infrastructure investment and operations.
Second, business leaders can support the revitalisation and re-orientation of DFIs.
Their power to raise blended finance makes them a critical bridge between private
investment and public projects. (See Box 9: Hydroelectricity from blended finance).
The World Bank, for instance, can raise US$28 from international markets forevery dollar put in to the bank as paid capital182, as can the International FinanceCorporation (IFC), which has financed over US$200 billion of private sector projects
in a variety of sectors on the basis of only US$2.6 billion of paid-in capital.183 The
IFC has now established its own fund business to manage third-party capital aswell.184 In addition, a recent Standard & Poor analysis estimated that, under certain75

assumptions, the 19 largest multilateral lending institutions could increase their
credit exposure by US$1 trillion without losing their current credit ratings, provided
the right project selection criteria are in place.185 Despite this potential, at present theeight major MDBs, excluding the European Investment Bank, invest only US$35-40
billion a year in infrastructure.186

Photo credit: Flickr / asiandevelopmentbank

The Commission believes that the capital base of the MDBs and also the major
regional development banks and DFIs should be expanded significantly and theirbusiness models re-directed towards mobilising private finance into all areasof Global Goals financing, including infrastructure.187 Recognizing the criticalrole of the private sector in achieving the Global Goals, the three-yearly funding
commitments made to the International Development Association (IDA) in
December 2016 for the first time includes a private sector window to promote
blended financing of development projects. The recent announcement that theWorld Bank is partnering with BNP Paribas to launch a set of equity-index linked
World Bank bonds, in which the index is based on companies selected for their SDG

76

alignment, is a further innovative step in the right direction. The Commission also
believes that domestic DFIs should be strengthened and directed towards sustainablefinance solutions.
The need for more blended finance mobilised by these institutions has never been
greater: if executed well, it could be the single most important lever for delivering
the Global Goals. An efficient blended finance strategy, one that crowds in US$20 ofprivate capital for each public dollar, could raise the additional US$2.4 trillion a year
needed for sustainable infrastructure development at a yearly cost of only US$125
billion of public capital. Despite fiscal constraints in many countries, this aggregate
amount of public investment seems feasible. However, a less efficient model,
crowding in just US$5 of private capital for every public dollar, would require up to
US$500 billion of additional public investment a year. This would be much harder tofinance.

"Blended finance is too important to the Global Goals to getwrong."
Data from blended finance initiatives across countries, institutions, instruments
and asset classes indicates big variations in their efficiency, with ratios of private
to public capital ranging from two to one all the way up to the mid-20s to one. The
Commission therefore believes it is time to take a fresh strategic look at how best
to mobilise and deploy blended finance to drive sustainable investments. Blended
finance is a lever whose ability to deliver the Global Goals infrastructure investment
is too important to get wrong.
There are major new pools of capital, including in the developing world, which needto generate stable, long-term positive rates of return. There is increasing appetite toinvest in asset classes that could provide additional diversification, less correlated
to the main equity and bond markets, and options for large institutional investors tohedge their accumulated exposure to climate and other key risks. A growing groupof private investors, both millennials and older individuals, is now benefitting frominter-generational wealth transfers and appears willing to pay more attention to
the total returns of their investments. This is expanding the potential for blended
finance beyond infrastructure to new fields, such as sustainable agriculture,social housing, girls’ education and off-grid clean energy provision. Leading global
companies are also accessing development finance to improve the social andenvironmental performance of their supply chains and, in some cases, extending
those supply chains into frontier countries and regions.
In 2017, the Commission will therefore seek to mobilise a task-force of leading
institutional investors, sovereign wealth funds, development finance institutions andprivate companies to lay out a potential “blended finance action plan” for delivering

77the Global Goals. Its aim will be to answer the question: “what is the most efficient
way to mobilise the incremental US$2.4 trillion a year needed to deliver the Global
Goals?” By including key stakeholders in the work, it will put more emphasis on
action than on planning.

Box 9: Hydroelectricity from blended finance
Today, the Nam Theun 2 (NT2) hydroelectric dam is generating electricity in Laos,
one of Asia’s poorest countries, and generating national income as well.188 On track to
generate US$2 billion in revenues over 25 years, the 1,070-MW plant could contributesignificantly to development and poverty reduction in Laos.189 The US$1.3 billion
dam was jointly financed by a host of multilateral development banks, bilateralfunding agencies and commercial banks from around the world. In all, 27 parties
were involved, including the World Bank, Asian Development Bank and French
Development Agency AFD to BNP Paribas and Fortis Bank. While a portion of theelectricity generated stays at home, the bulk is exported to Thailand under a 25-year
fixed-price power purchase agreement, meaning a big income boost for Laos.190 Thatrevenue is largely reinvested in programmes to tackle poverty, boost health andeducation, and improve environmental management domestically. The Nam Theun 2Power Company, whose owners include Electricité de France, the Laos government,
the Italian-Thai Development Public Co Ltd. and Thai power producer EGCO, havealso sought to mitigate environmental and social impacts, investing heavily in
local conservation efforts as well as new housing and infrastructure on the Nakai
Plateau.191 For more detail, see report.businesscommission.org.

The third thing business leaders, particularly those from the financial sector, can doto unlock infrastructure finance is to support the creation of a global, liquid asset
class for infrastructure investments. Instruments for financing infrastructure arehighly heterogeneous: they finance projects in different kinds of sector (energy,transportation, social and more); create different assets (debt, equity); and are
subject to different regulations depending on geography.192 This makes creating a
tradable, liquid asset class for infrastructure investments very complicated. But
despite its complexity, leaders in the global financial industry should make this goala top priority over the next five years. Progress has been made recently, for example,
by the European Financial Services Roundtable.193 Now more effort is needed. The
Commission will try to put this topic on the G20 and Financial Stability Board
agenda for 2017.

78

4.3 Aligning regulation with investment
Global finance is a highly-regulated industry. Banks, insurance firms, stock
exchanges, asset managers, public pensions and other institutional participants
are regulated by national and supra-national entities ranging from Central Banks
to dedicated financial regulators. If many financial market participants are to
significantly alter their practices and align themselves with sustainable development,
financial regulation must first permit them to make these changes.
Since the 2008 crisis, regulators have revamped a wide range of banking, insurance
and investment rules to enhance stability and reduce the risks of excessive leverageand complexity. Resulting measures include Dodd-Frank in the US, Solvency II in
the EU and Basel III’s global standards on bank capital adequacy, stress testing, andliquidity risk.
Though all well-intentioned, some aspects of these reforms are having unintended
negative consequences for sustainable development. Basel III will impact theavailability of bank lending to long-term projects, such as infrastructure, by raising
capital charges for such loans. The impact of the insurance regulation Solvency II
on European institutional investors is similarly significant: one estimate suggeststhat insurers who invest in large-scale wind-farm assets in Europe need to reserve
US$12 million of equity capital for every US$100 million invested, while the reserve
requirements for an equivalent investment in Canada is only US$3 million.194
There are some indications that regulatory bodies are considering proposals evenmore damaging to prospects for the Global Goals. Business leaders who are serious
about the transition to a sustainable economy can help push financial regulation in
the right direction by showing how a sustainable approach fits with the goals of postcrisis regulatory policy. More sustainable regulations would reduce systemic risk.
By enabling the right type of long-term investment, they will contribute to growthboosting, much needed infrastructure and provide better returns for individual
investors in a low-yield environment at the same time. In particular, global rulesetting bodies, like the Bank of International Settlements, International Monetary
Fund, International Accounting Standards Board and the International Organisationof Securities Commissions, need to test thoroughly the impact of any proposed
standards and mandates (which are likely to be relatively short-lived) on achieving
the longer-term Global Goals and the global climate target of remaining below two
degrees of warming.

"More sustainable regulations would reduce systemic
financial risk."

79

Regulators should consider whether their actions are unnecessarily constraining
businesses and finance providers that would otherwise be doing more for the Global
Goals. The G20 and Financial Stability Board (FSB) should consider inserting theprinciple of sustainability into their regulators’ mandates. More specific remedies
could include: Global Goals-related Risk Reduction, which would refine the Baselrules on determining risk weighting to take into account the contribution of abank’s financing to the Global Goals; improving pension and insurance regulations
to enable institutional investors to invest more in emerging market infrastructure;
improving regulations to enable bond issuance and investment for long-term,
sustainable finance for various sectors; and stronger certification and ESG standards
for green bonds and climate bonds.
Another essential job is to build on the work of the Financial Stability Board’s (FSB’s)
Task Force on Climate-related Financial Disclosures (TCFD).195 Under Michael
Bloomberg’s chairmanship, the TCFD is developing voluntary, standardised climaterelated financial risk disclosures for companies to use when providing information
to investors, lenders and insurers. It will be the role of business leaders, along withcivil society, to ensure that take-up of the recommendations is universal. The task
force has a particular focus on the physical, liability and transition risks associatedwith climate change. We believe that the next challenge could be for the FSB toextend this approach to other areas relevant to achieving the Global Goals, startingwith broader environmental issues, like water and land use, and moving on to social
issues.
At the national level, meanwhile, business leaders can help push countries to develop
national sustainable finance roadmaps. The UNEP Inquiry into the Design of a
Sustainable Financial System has done excellent work in partnership with national
governments and regulators in a series of countries including Indonesia, China andthe United States.196 These roadmaps include articulating how the regulation offinancial actors – banks, insurance companies, institutional investors, and capital
markets – needs to evolve so as to support sustainable development, promoting
not only sustainable infrastructure investment but also financial inclusion, SME
financing and more.

Box 10: Innovations in finance that can speed progress on the Global Goals
Some of these ideas have been in the market longer than others, but all can directly
support the Global Goals for Sustainable Development.
Development impact bonds (DIBs) enable private investors to provide upfront
funding for development programmes, with international aid donors or country

80

governments making the repayments and an additional coupon if evidence showsthat programmes achieve pre-agreed outcomes.197 In Swaziland, for example,
aid donors are exploring using a DIB to fund a new approach to antiretroviraltreatment for HIV and TB – allowing them to share risks with private investors
while also gaining from the private sector’s skills in complex coordination andperformance management.198
Green bonds are conventional bonds, issued by corporations, cities, commercial
banks, development banks or national governments, whose proceeds areearmarked for projects with climate or other environmental benefits. The first“labelled” green bond was issued by the European Investment Bank in 2007.199 By
2015, US$42 billion of green bonds were issued.200 Estimates suggest that up to
US$100 billion of green bonds could be issued by the end of 2016.201 There are stillconcerns about the lack of a consistent definition for what makes a bond “green”;
pressures for standardisation and independent verification are growing. The fasterone set of common market standards and practices emerges, the faster green bonds
will become both more liquid and also more efficiently priced. This is essential ifgreen bonds are to scale; today they account for significantly less than 0.5 percentof the total bond market.202
Crowdfunding platforms use the internet’s capacity to reduce transaction costs
as a way to enable large numbers of people to invest small amounts of money(primarily through debt, but increasingly through equity as well).203 The website
Kiva, for example, has matched 1.6 million lenders to 2.2 million borrowers since
its launch in 2005, with a total of US$949 million lent via the site.204
New insurance mechanisms are creating powerful new ways of building resilienceamong some of the world’s poorest people and countries. These are the least
likely to hold insurance, with 70 percent of global economic losses resulting fromuninsured risks.205 In the Caribbean, for example, where flood and tropical storm
damage has caused over US$5 billion of damage in the last 30 years, new weatherindex based insurance products are providing cover to low-income people andlending institutions exposed to climate losses to help them manage the risks ofmore frequent and severe extreme weather events.206
Blockchain or mutually distributed ledger systems are creating new ways ofkeeping records securely and across multiple locations. All users “hold” theledger in a distributed fashion, transforming the role of “trusted” third parties.207
Already, the technology is being used for applications as diverse as land ownershipregistries, individual identity records, and custody of natural assets like fish orforestry products.

815. RENEWING THE SOCIAL CONTRACT
Key Points•

Achieving the Global Goals that meet basic needs and protect humanrights (the social goals) is a business imperative as well as a moral one.

•

Failure on the social goals has huge economic costs – rising inequality
has knocked more than 10 percentage points off growth of some
economies. Women still earn 25 percent less than men on average forcomparable work.

•

More than 600 million new jobs are needed over the next 15 years tomatch growth in the global workforce. Youth unemployment is alreadyat 13 percent; automation risks are significant. This outlook makes thepotential for the Global Goals to deliver more than 380 million jobs evenmore vital.

•

Today 20-40 million workers are trapped in forms of modern slavery.
More than 150 million children are working in the fields, mines,
workshops, and rubbish dumps, the informal dark side of the world
economy.

•Trust in business continues to fall. Business can honour the terms of
their social contract to regain society’s trust by:•

Adhering to high standards of behaviour;•

Supporting sectoral coalitions that raise standards across thecompetitive playing field for all players;•

Paying their taxes transparently like everyone else;•

Using their influence to advocate for policies in line with the Global
Goals; and•Developing good jobs with decent pay along the whole of their supply
chains in a way that fully respects the UN Guiding Principles on
Human Rights.

82More than half of the Global Goals aim to meet basic needs and to include, empower
and protect those currently disadvantaged in society. Along with Goal 16 – Peace,
Justice and Strong Institutions – these societal Global Goals are also moral
imperatives for countless individuals in the business community.
Achieving these Global Goals for human society is a business imperative too. As
noted in Section 2, without improvement in the incomes, health, rights and educationof the great majority of the world’s working men and women and better social
protection, the business opportunities arising from sustainable development will
not materialise. To take one example, income inequality in emerging and developed
economies reduces business growth. The OECD’s 2014 analysis of the impact ofincome inequality found that rising inequality knocked more than 10 percentage
points off economic growth in both Mexico and New Zealand in the two decades
before the global financial crisis.208
Achieving these goals is a business imperative for a further urgent reason. The
financial crisis and events since have engendered a deepening crisis of trust in
business and with it the risk of increasing social and political unrest. Trust inlarge corporations, particularly in major financial institutions, has eroded among
many members of civil society (in which we include both NGOs and citizens) andgovernments. Businesses and their sector peers working with integrity in all theiractivities to pursue the social Global Goals can regain the trust of these parties inthe social contract because all will be pulling in the same direction: a sustainable,
more inclusive world, which will be a better world for business too.

"Trust in big business has eroded. The Global Goals can help
restore it."This section looks at ways that businesses can earn that trust, first through theirdirect influence on creating decent jobs and supporting training and education
against a difficult outlook for global employment. Second, by forging a new social
contract based on social dialogue with civil society and government.

83

Photo credit: Flickr/nyusternbhr

5.1 An uncertain outlook for employment
Society has made progress in recent years. Between 1988 and 2008, the poorest thirdof humanity saw their incomes rise by 40-70 percent, with those of the middle third
rising by 80 percent.209 The proportion of people in extreme poverty declined bymore than half between 1990 and 2015, as did the number of children who die before
the age of five.210 However, over 750 million people still lived in extreme poverty in2013, the most recent year for which data are available.211 And women have benefitedless than men – whether on pay, seniority or access to decent jobs.
Some of the gains are fragile too: many who escaped poverty in the last 15 years could
slide back in if growth slows. Moreover, automation driven by the “fourth industrial
revolution” – the fusion of technologies that is increasingly merging the physical,
digital and biological spheres – could have a huge impact on the number and locationof jobs across the world, and raise big questions about how to protect incomes for theunemployed.

"If growth slows, many could sink back into poverty."
By 2030, there will be seven percent more people aged 15-24, over 80 percent of themin Africa or Asia.212 Overall, 600 million new jobs are needed over the next 15 years
to match growth in the global workforce.213 Global unemployment today stands at 5.8

84percent, or 200 million people worldwide – still well above the pre-crisis level of 5.5
percent in 2007.214 (Exhibit 14) And young people are much more likely to be out ofwork or underemployed: in 2014, youth unemployment worldwide was 13 percent.215
If development leaves young people behind, they could easily become a source ofdependency, anger and instability.

E XHIBIT 14:

Global unemployment rate and total unemployment,
2005-15
Total unemployment(left vertical axis)

Global unemployment rate(right vertical axis)

220

6.4
6.2

6.2

6.0
5.8

180

197.7
187.5

195.1

5.5
180.0
168.8

193.8

196.2

198.6

196.4

197.1

5.6

177.0

160

5.2
2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Source: ILO calculations based on ILO Research Department's Trends Econometric Models, November 2015.

More automation could push unemployment higher. As artificial intelligence,
software and robotics take on more work from humans, there may simply be lesswork to be done. Then more radical options may be needed to guarantee that people’s
basic needs are maintained. These include the idea of a universal basic income,a form of social security in which all citizens or residents of a country regularly
receive an unconditional sum of money, either from government or from some othersource. This is currently the subject of a major study funded by Silicon Valley seed
accelerator Y Combinator.216 Given the structural challenges in many labour markets,

85

Global unemployment rate (per cent)

6.0

6.0

200

there is a mounting case for considering more radical fiscal approaches such as
shifting taxation away from income (especially on incomes below the median incomeline) towards resources, carbon pollution and land. Beyond income, essential services
including health care, education, child-care and care in old age form the foundationof sustainable society.

5.2 Providing decent work and more jobs
How can businesses pursuing the Global Goals respond to the likelihood of thenext wave of automation having even more radical consequences for employment
than previous technological revolutions? The Commission would encouragebusiness leaders to work with civil society and governments on developing market
opportunities with the greatest potential to create growing amounts of decent workin well-paid jobs.
Private business already creates most of the world’s jobs: in developing countries,
90 percent of jobs are in the private sector, 217 while among OECD countries the
pre-crisis average was around 85 percent, a figure likely to have risen since becauseof public sector austerity programmes.218 In today’s employment context creating
the estimated 380 million new jobs in business that arise from achieving the Global
Goals (see Section 2) becomes all the more important. They could account for morethan 10 percent of the estimated global workforce in 2030. Equally important ismaking sure all the jobs in a business provide decent work and that no-one is left
behind.

"The Global Goals could deliver 380 million new jobs in business."
At a minimum, business leaders are expected to ensure that jobs throughout their
supply chains are physically safe, and to be ready to show how they are making
sustained efforts to tackle unsafe working conditions, child labour and modern
slavery. Today, job-related injuries and sickness kill more than 2.3 million people
every year.219 Around 21 million people work in forms of forced labour (someestimates suggest up to 40 million).220 And 168 million children are involved in childlabour, half of whom are in hazardous work.221 They are embedded, invisibly, in thefirst mile of almost every global value chain – from mining to garments to food andagriculture to waste management.
Global businesses are also expected to have integrated human rights into theiroperations. While many companies have embraced the need to reduce their negativeenvironmental impacts, much less progress has been made on their social impact.
The UN Guiding Principles on Business and Human Rights222 aim to bring this issue86to the centre of business practice, through helping companies identify how to reduce
human rights risks along their entire supply chains – an approach that promotes
sustainable development as well as reducing harm. These principles also create aformal responsibility on both states and businesses to protect human rights anddecent work, and to provide effective grievance procedures and remedies against
human rights abuses.
To help businesses meet this responsibility, the Better Work programme, apartnership between the International Labour Organization and the International
Finance Corporation, helps enterprises to improve labour standards at the factory
level through training and capacity building, and to increase competitiveness inglobal supply chains by increasing productivity and quality.223
There has been strong progress here. Since 2000, there has been an 80 percent
increase in global framework agreements between multinational firms and global
union federation, where companies consent to respect workers’ rights and to promote
decent work globally within their subsidiaries and along their global supply chains.224
And many new and effective business-NGO platforms have formed to help companies
uphold human rights throughout their operations. These include ACT in the fashion
sector (see Box 11: Action, Collaboration, Transformation), the Ethical Trading
Initiative in food and agriculture, the Bangladesh Accord, and the Malawi 2020 Tea
Rehabilitation Programme.225

Box 11: Action, Collaboration, Transformation
The recently established apparel sector initiative Action, Collaboration,
Transformation (ACT) describes itself as an “initiative between international
brands and retailers, manufacturers, and trade unions to address the issue of living
wages in the textile and garment sector. It aims to improve wages in the industry
by establishing industry collective bargaining in key garment and textile sourcing
countries, supported by world class manufacturing standards and responsible
purchasing practices”.226 One of ACT’s roles is to examine the purchasing practices ofbrands and retailers and how they affect wage levels. Through this work, companies
understand their influence on suppliers and also tackle instances where particularactions or their business models in general hinder progress towards living wages.
ACT makes a clear business case for industry collective bargaining agreements.

Through such approaches, workers and communities become more aware of theirrights. Paying living wages ensures that families can support themselves, educate
their children, and cope with periods of sickness or other contingencies. Business87

can engage with communities as partners in protecting and sustaining theirlivelihoods and in making sure women and girls can be free of sexual harassment
and discrimination.
Companies can have a particular influence on gender equality by prioritisingprogress in their workforces. There is still a very long way to go to ensure a fairdeal for women – above all in developing countries, where structural gender
discrimination is a central issue in poverty and development. At current rates, itwill take 70 years to close the gender pay gap for those in direct employment andthroughout supply chains227, with women worldwide earning nearly 25 percent lessthan men for doing the same work.228 Across all major economies, women holdfewer senior business leadership positions than men.229 They are also far more
likely to work in informal, low-paid or undervalued sectors – 49 percent of working
women are in jobs classified as vulnerable.230 And women take on a disproportionate
share of unpaid domestic care, with significant career consequences: 25 percent of
women in the European Union cite care and family responsibilities as the reason forbeing out of the labour force, compared to just three percent of men.231"It will take 70 years to close the gender pay gap at this rate."
Governments will also need to do more during this time of pronounced uncertainty
and insecurity for many workers to help people retrain and cope with periods of
unemployment. Sustainable business leaders can support government spending
in this area and complement their efforts. One mechanism is support for active
labour market policies such as training schemes, employment subsidies and public
employment programmes. The amounts that governments spend on such schemes
vary wildly. Belgium, Finland, the Netherlands and Sweden all spend one percent
of GDP or more.232 For Denmark, the figure is as high as 2.3 percent. However, theOECD average is 0.6 percent, and the US spends just 0.1 percent.
Another way companies can directly protect their workforces, especially workers
at risk of redundancy, is through their own training and skills programmes. Whilethe nature of skills needed in the economy of 2030 remains unsure, low skilledworkers are likely to be most at risk of long-term redundancy in an increasingly
automated economy.

5.3 Providing training and skills
Education and training helps individuals to enter and succeed in labour markets
everywhere. Moreover, the Commission’s research shows that progress on Global
Goal 4, Quality Education, is linked to improvement on more of the goals than88

any other (see Section 2.3). Yet 263 million children and young people around theworld are out of school.233 Millions more are in school but not learning; UN figures
show that at least a quarter of a billion children cannot read or count despite having
spent four years in school.234 In 32 countries – including many of the countries withthe highest birth rates – fewer than 80 percent of 15-24 year olds can read.235 Girls
get a particularly bad deal: they are more likely than boys to be out of primary or
secondary school in 63 developing countries.236 Nor is underachievement confined
to low-income countries: in the US, for instance, 38 percent of 17-18 year old students
were assessed as “below basic” in mathematics.237

Photo credit:
Flickr/iloasiapacific

Citizens look first to governments to provide education. But business leaders
can be crucial to strengthening education systems by supporting policy shiftsthat address underlying systemic weaknesses. They can also make a more directcontribution by providing skills and vocational training to their workers. Thatmeans nurturing specific technical expertise as well as broader skills like problem
solving and communication, fostering entrepreneurship, and building opportunities
with traditionally marginalised or disadvantaged groups.238 The new Education
Commission (formally the International Commission on Financing Global Education
Opportunity) launched in September 2015 will be exploring how over the next 15
years better education financing could lead to the Global Goals of greater economic
growth, better health outcomes and improved global security.239

89

Public-private partnerships offer important possibilities too. Vocational education
works well in countries like Germany, Singapore and Sweden partly because
companies and worker representatives are closely engaged in curriculum design andtraining delivery, and partly because the education system is set up to help pupils
cross the academic/vocational divide. (See Box 12: Learning to train better.)Box 12: Learning to train better
Generation is an international organisation that has developed new ways to build
skills and job readiness among unemployed and underemployed 18-29 year olds.240
It has identified healthcare, technology, retail and skilled trades as sectors withhigh demand for entry-level jobs and puts students through intensive “boot camps”
covering technical and behavioural skills matched to those industries, with regularfeedback and mentoring.241 Generation has a 91 percent job placement rate andgraduates can expect to increase their incomes by two to six times immediately.
Crucial to this success is its direct engagement with employers from the outset,
securing commitments to provide graduates of the programme with jobs oncompletion.
Launched just two years ago, Generation – run by non-profit group McKinsey Social
Initiative – is already one of the world’s largest youth training organisations, with
programmes across 15 professions in five countries. By the end of 2016, it will havetrained more than 10,000 young men and women and significantly boosted theirchances of securing a decent living.242
The 400+ employers involved have been impressed too: 83 percent say Generation
graduates outperform their peers, and 98 percent that they would hire from thescheme again.243 This is even with operating costs that are 20-50 percent lower thancomparable programmes, Generation says. It currently relies on donors, including
McKinsey & Company and Walmart, for the bulk of its funding. But the programmeplans to be self-financing by 2018, through fees charged to employers, students andgovernments convinced of the merits of its approach. By 2020, Generation aims toreach 1 million young people, and to have fine-tuned a model that could reach tens of
millions more.

5.4 Forging a new social contract
Trust in business is at a low point. In particular, people in developed economies“left behind” by globalisation have lost faith (see Exhibit 15). Economic insecurity
and loss of status, dignity and identity have become major issues in those areas and90

electorates are angry and fearful. Investors withdrew more than US$200 billion
from equity funds in 2016 in response to mounting concerns about political upheaval
in developed economies and rocketing company valuations.244 NGOs worldwide
are probing discrepancies in some sectors between rising profits and executive payon the one hand, and miserable pay and conditions for workers in the first linksof the global value chains that supply them on the other. And governments as wellas citizens in countries wrestling with low growth are impatient of companies’
ingenuity in avoiding tax when cuts in public spending are straining the social fabric.

E XHIBIT 15:

Who has gained from globalisation
The global 1% and the Asian middle class
Real income gains in percentage, 1988 to 2008
100%

Asian Middle Class

U.S. and Western
Lower Middle
Class

80

Top
1%

60

40
Top
2-5%

20

0
5th
Poorer

20th

40th

60th

80th

Global Population by Income Distribution Percentile

95th

100th
WealthierNote; Incomes are real, PPP-adjusted, in 2005 dollars
Source: Branko Milanovic

91Companies that incorporate the Global Goals in their business strategy can restore
public trust by pursuing that strategy with integrity. Taking this course automaticallyaligns their interests with civil society and government much more closely thanhas recently been the case. Over the past 30 years, the public and private sectors
diverged, with the private sector left to its own trajectory by the “Washington
Consensus” until the financial crisis called it into question.
Now, the public sector, civil society and, with growing momentum, the private sector
are urgently pursuing the same Global Goals for Sustainable Development. They
need each other to achieve them. There will be different emphases and difficult
trade-offs to negotiate, but in principle all these stakeholder groups are pulling in thesame direction. Trust will grow as they learn to work together. All three groups could
renew a social contract with the following actions.

5.5 Actions for businessCompanies can show their commitment to the Global Goals by respecting basic
standards of behaviour enshrined in both the UN Global Compact principles and the
UN Guiding Principles on Business and Human Rights. Consistently observing theseacross their activities gives companies the foundation for genuine and successful
sustainable development leadership.

Box 13: Mars develops communities and business through sticking to fiveprinciples
Mars, Incorporated has empowered people in the first mile of its value chain byadhering to the five principles that are the foundation of its culture – Quality,
Responsibility, Mutuality, Efficiency and Freedom.245 The principles act as aframework for developing target communities in low-income economies while
simultaneously driving profits. Mars tracks a unique set of community development
metrics: human capital measures such as worker capacity and satisfaction; social
capital measures including trust, social cohesion and community capability forcollective action and shared financial capital measures such as shared economic
benefits. Over time, performance on these metrics has correlated consistently withsales performance.246 Using these development metrics, Mars’ Kenya-based Maua
programme has grown from seven micro-entrepreneurs at launch to include over 500
micro-entrepreneurs who generate more than US$7 million in retail sales, theequivalent of over 20 percent of Wrigley Kenya’s annual revenue.247

92Unilever promotes health and well-being on a massive scale
As part of the Unilever Sustainable Living Plan, Unilever has set itself the goal of
helping more than 1 billion people take action to improve their health and wellbeing, through programmes on handwashing, safe drinking water, oral healthand self-esteem. A programme run by its Lifebuoy brand, the world’s number one
antibacterial soap sold in nearly 60 countries, aims to change the handwashing
behaviour of a billion people by 2020 across Asia, Africa and Latin American.248
This is the world’s largest hygiene promotion programme. Since 2010, around 337
million children, parents and new mothers have been reached by its targeted ideas
encouraging people to wash their hands.249 Lifebuoy has developed a special approachfor primary schools to make handwashing fun and engaging, so millions of children
in poor and rural communities get the benefits of better hygiene. Lifebuoy
is one of Unilever’s Sustainable Living Brands, which were together responsible foralmost half Unilever’s growth in 2015, when they grew 30 percent faster than the restof the business. For more detail see report.businesscommision.org.

Secondly, companies should pay their tax and disclose tax informationtransparently. As noted in Section 4, tax revenue is a crucial source of public financefor sustainable development, and one that many developing countries in particularneed to increase substantially. More broadly, we recognise that tax represents theconsideration in the social contract between a state and its citizens.

"The public mood is against companies that do not pay theirtaxes."We anticipate companies that avoid tax will face increasingly negative consequences
in investment and consumer markets. MSCI, currently provider of the world’s mostwidely used sustainable investment benchmarks, announced in late 2016 that it
would significantly reduce the ESG ratings of companies that use aggressive tax
avoidance policies from the beginning of 2017.250 The reason given for this change isthat the public mood has shifted against companies that do not pay their tax bills.
Recent years have seen a major push by the OECD, G7, G20 and others on measures
to make taxation more effective, including standardised country-by-country
tax reporting by international companies and greater transparency of beneficial
ownership. The Commission welcomes these moves, and would like to see debate
about a fairer, more transparent global tax system continue to deepen and move
forward.

93

Third, businesses can use their influence on policy in a responsible,
transparent, and accountable way. The scale and reach of global businesses
have given them a power and influence over governments that they do not always
exercise responsibly. Much of the current mistrust in business derives from occasions
when they have used their power to gain access to policymakers to lobby for theirown narrow interests rather than aligning their agenda with the common good.
Companies pursuing the Global Goals as a business strategy will, by definition:•

Be fully transparent about all their public affairs activity, including what policies
or decisions they are arguing for and to whom;•

Avoid lobbying for policies that are contrary to achieving the Global Goals;•

Avoid “revolving door” appointments of public officials and political donations
that serve purposes in conflict with the Global Goals;•

Support sound science and make use of the results in setting science-basedtargets in their sector roadmaps; and•Make their opposition known whenever a trade association they belong to takes
a position at odds with the company’s sustainable development principles andbasic standards of behaviour, and say what action they are taking to oppose it.

Photo credit:
Lionel Charrier

94

The Commission believes it would be valuable to reflect companies’ use of theirinfluence in an independently compiled “Responsible Political Engagement Index”.
Companies would disclose their performance against the criteria above and an
independent body, such as Transparency International, could compile rankings. The
Commission will explore this idea further in its second year.

5.6 Actions for governments
Just as governments need businesses to help achieve the Global Goals, the reverseis also true. Governments can help businesses pursue these shared goals firstly bycreating an environment that enables private sector growth. The main elements aregood and accountable governance, the rule of law, effective contract enforcement andlegal systems, and functioning customs regimes. And just as all businesses need to
pay their tax, governments’ spending must be transparent and free from corruption.
If it isn’t, confidence in tax systems will wane and the social contract may unravel.
In addition, achieving the Global Goals requires three specific kinds of government
policy, as noted in previous sections, namely policies to:•

Ensure that prices for goods and services reflect social and environmental
externalities, rather than policies that distort taxes or offer perverse subsidies;•

Align financial regulation with the Global Goals, in particular to incentivise
private sector infrastructure investment. In this regard, the Basel III and
Solvency II regimes should be revisited; and•Support well-funded public education systems, active labour market policies andadequate, high quality social protection.

Finally, governments can take on a stronger role in financing infrastructure
projects. As Section 4 discussed, infrastructure is critical to achieving the
Global Goals and stimulating private sector growth. More private sector financefor infrastructure could be mobilised through blended finance if governments
created the right conditions. For instance, governments can pursue options, mostimportantly greater policy predictability, to reduce risks for private finance. They canalso expand the resources of the multilateral development banks in which they areshareholders, as well as ask them to put more into infrastructure.

95

5.7 Actions for civil society
The Commission recognises that a crucially important role for civil society is
to monitor institutions and ensure that business, government and community
organisations are transparent and respect the rule of national and international law.
Equally, civil society has a responsibility to engage in dialogue with all sectors andadvocate for changes to law and practice where they are failing or are inadequate
to deal with corruption, new technology and socially destructive practices or
disruptive change.
For trade unions, there is a specific responsibility to engage in social dialogue withbusiness and, where relevant, government to ensure rights, fair wages and safe andsecure work are both agreed and respected as part of the social contract.
All parties need to ensure the guarantee of social protection and labour market
institutions that secures a dignified future for societies and a fair competitive basis
for business.

96

6. CONCLUSION
This report has presented the case for businesses to concentrate on solving theworld’s greatest challenges that the Global Goals set out to overcome. There ismuch more than US$12 trillion of value at stake. There is the opportunity to shape asafer, more prosperous world with a more predictable future in which to invest andinnovate. There is the chance to rebuild trust between business and wider society.
Achieving the Global Goals would make the world more sustainable, inclusiveand full of opportunities for everyone. There would be many challenges still,
but societies would be better equipped to tackle them. The alternative is more
uncertainty, intensifying risks, growing social and environmental costs and bigger
shocks. Reaching that better world depends on business leaders in the private sector
choosing to lead the charge for sustainable growth.
The members of the Business and Sustainable Development Commission have chosen
to lead our own companies towards the Global Goals. With this report, we urge
others to join us, whether you are already a CEO, board member or individual driving
progress in your firm; in your first executive role on track to running a company,
large, medium or small, within the next ten years; or a recent graduate or student
in higher education hoping to start a company that will be a powerful innovator insustainable markets.

6.1 Actions for sustainable business leaders
The report has argued that leading the charge for sustainability requires six kinds ofaction from sustainable business leaders, namely action to:

1. Build support for the right growth strategy. The more business leaders who
understand the business case for the Global Goals, the faster progress will be
towards better business in a better world.

2. Incorporate the Global Goals into company strategy. That means applying
a Global Goals lens to every aspect of strategy: appointing board members andsenior executives to prioritise and drive execution; aiming strategic planning andinnovation at sustainable solutions; marketing products and services that inspire
consumers to make sustainable choices; and using the goals to guide leadershipdevelopment, women’s empowerment at every level, regulatory policy and capital
allocation. Achieving the Global Goals will create 380 million new jobs by 2030.
You need to make sure your new jobs and any others you generate are decent jobs
with a living wage, not only in your immediate operations but across your supply

97

chains and distribution networks. And you need to help investors to understandthe scale of value that sustainable business can create.

3. Drive the transformation to sustainable markets with sector peers. Shifting
whole sectors onto a sustainable footing in line with the Global Goals will unlock
much bigger business opportunities. Consider food and agriculture. A global foodand agriculture system in line with the Global Goals would deliver nutritious,
affordable food for a growing world population, higher incomes – especially for
the world’s 1.5 billion smallholders, and help restore forests, freshwater resourcesand vital ecosystems. It would create new economic value of more than US$2
trillion by 2030. And it would be much more resilient to climate risk.
“Business as usual” will not achieve this market transformation. Nor will
disruptive innovation by a few sustainable pioneers be enough to drive theshift: the whole sector has to move. Forward-looking business leaders areworking with sector peers and stakeholders to map their collective route to asustainable competitive playing field, identifying tipping points, prioritising
the key technology and policy levers, developing the new skill profiles and jobs,
quantifying the new financing requirements, and laying out the elements of a justtransition. Over the next 15 years, driving system change in line with the Global
Goals with sector peers will be an essential, differentiating skill for a world-classbusiness leader. It means shaping new opportunities, pre-empting the risks of
disruption, building new public private partnerships and renewing business’s
licence to operate.

4. Work with policy-makers to pay the true cost of natural and humanresources. Sustainable competition depends on all the competitors facing
prices that reflect the true costs of the way they do business – internalising
the externalities, to use the jargon. The idea of pricing pollution at its trueenvironmental and social cost has been around for a long time. But the need forstrong carbon pricing is becoming ever more urgent to tackle the risk of runaway
climate change.
Establishing prices for carbon as well as other environmental resources(especially water in many areas) fires the starting gun for a “race to the top”.
Businesses that choose to pay living wages and the full cost of their resources
need to be certain that their competitors will do the same in the not too
distant future if they are not to be at a cost disadvantage. Business leaders
must therefore work openly with regulators, business and civil society to shapefiscal and regulatory policies that create a level playing field more in line with
the Global Goals. This could involve fiscal systems becoming more progressive98

through putting less tax on labour income and more on pollution and underpriced resources.

5. Push for a financial system oriented towards longer-term sustainable
investment. Achieving the Global Goals will likely require an estimated US$2.4
trillion a year of additional investment, especially for infrastructure and otherprojects with long payback periods. There is enough capital available. But in theworld’s uncertain circumstances, most investors are looking for liquidity andshort-term gains. As soon as companies are paying “full” prices that reflect socialand environment externalities, then their financial performance will be the main
signal that investors need to understand companies’ relative performance on
the Global Goals. But achieving full prices across the economy will take time.
Until then – and to help bring that day closer – business leaders can strengthen
the flow of capital into sustainable investments by pushing for three things:
transparent, consistent league tables of sustainability performance linked to the
Global Goals; wider and more efficient use of blended finance instruments toshare risk and attract much more private finance into sustainable infrastructure;
and alignment of regulatory reforms in the financial sector with long-termsustainable investment.

6. Rebuild the Social Contract. Trust in business has eroded so sharply since
the global financial crisis, the social fabric is wearing thin. Many see businessas reneging on its social contract. Business leaders can regain society’s trustand secure their licence to operate by working with governments, consumers,
workers and civil society to achieve the whole range of Global Goals, andadopting responsible, open policy advocacy.
Rebuilding the social contract requires businesses to pay their taxes
transparently like everyone else and to contribute positively to the communities
in which they operate. In total, there are over 700 million workers employed
directly and indirectly in global supply chains. Treating them with respect andpaying them a decent wage would go a long way to building a more inclusive
society and expanding consumer markets. Investing in their training, enabling
men and women to fulfil their potential, would deliver further returns throughhigher labour productivity. And ensuring that the social contract extends
from the formal into the informal sector, through enacting the UN’s Guiding
Principles on Human Rights, should be non-negotiable. There are still between
20-40 million people working in forms of modern slavery and over 150 million
children working in the fields, mines, workshops, and rubbish dumps that
underpin much of the global economy, unseen and unprotected. This is anunacceptable feature of 21st century capitalism – one that board-rooms, investors
and consumers can no longer ignore.

99

The more business leaders who take these actions, the faster the world economy
will make the shift to an economic model where competition systemically drives
sustainable, inclusive economic growth.

6.2 Actions for the Commission
The Commission is committed to supporting businesses of any scale, scope, sector or
geography that want to join with us in making this shift happen fast. Over the nextyear, we plan to do so by:

1. Nurturing and mentoring the next generation of sustainable development
leaders. Many of us, as CEOs and leaders, have had to develop new ideas,
leadership skills and tools to lead our businesses through the challenges andopportunities of sustainable growth. We would like to reach out to another500-1,000 CEOs (and future CEOs) to share what we have learned and provide
peer support to those who choose to make sustainable growth central to theirbusiness strategy. We will offer our own time and that of our firm’s leaders forpeer conversations on the business case and the transformational leadershipneeded. We will engage with business schools and other learning providers togive an informed view on what combination of knowledge, experience, action
planning, digital learning and cohort support best equips CEOs and future CEOsfor sustainable leadership. And we will ensure that learning programmes within
our businesses include sustainable leadership content.

2. Creating sectoral transformation roadmaps. The Commission will work withsectors to create sectoral transformation roadmaps for up to five key sectors,
as outlined in Section 3. In each case, members of the Commission from withinthat sector will take the lead on assembling a group of peer CEOs and other key
stakeholders in a coalition. We will support those coalitions in creating a visionof what their sector should look like by 2030 if the Global Goals are treated asa strategic framework for better growth, and what actions and changes sector
players can take to get there quickly and fairly.
In some cases, the best way to move forward will be cross-sectoral, as newtechnologies and business models break down traditional ways of doing business.
This could mean new coalitions will emerge, for example, on externality pricing,
bringing together players with different interests to find the most cost-effective
ways of protecting natural capital. It could feed into greater use of digitalplatforms to accelerate break-through, such as XPRIZE, which invites its online
audience to compete to solve the world’s biggest problems, awarding prizes towinners.251 The Commission will use its cross-sectoral membership to support

100

such catalytic ideas, which could create new market-based means of reaching
Global Goals targets.

3. Creating Global Goal league tables. In parallel, the Commission will also
work with others in the financial sector to create publicly available Global Goal
league tables. These will rank corporate performance sector by sector against
relevant Global Goals and establish sector sustainability benchmarks. Our vision
is to turn the analysis of sustainability reporting data into a publicly available
resource, empowering citizens and civil society to use it. In the league tables,
companies would be ranked on their performance across a range of indicators
including climate change, gender equality, supply chain labour standards(including modern day slavery) and access to healthcare. The process of building
the league tables must be collaborative, with input from civil society, investors
and independent rating providers on the methodology, as well as companies. It
will take time to build up the right metrics and quality of data.
Companies that comprehensively and successfully incorporate sustainablegrowth in their strategies will benefit in the competition to attract investors
as their impact becomes visible to all, creating the “race to the top” that will
accelerate progress towards the Global Goals.

4. Supporting measures to unlock additional finance needed to achieve the
Global Goals. The Commission will do this by advocating for new and different
kinds of public and private sector engagement in sustainable infrastructure, an
expansion in the capital base of multilateral development banks and development
finance institutions (both bilateral and domestic), and the creation of a global,
liquid asset class for infrastructure investments.
The Commission will also mobilise a task-force of leading institutional investors,
sovereign wealth funds, development finance institutions and private companies
to lay out a potential blended finance action plan for delivering the Global
Goals. Its aim will be to answer the question: “What is the most efficient way
to mobilise the incremental US$2.4 trillion a year needed to deliver the Global
Goals?”.

101

5. Exploring the idea of an independently compiled Responsible Political
Engagement Index. To guide companies, this would set out the principlesof transparent and fair political engagement. Companies would disclose
their performance against these criteria and an independent body, such as
Transparency International, could compile rankings.
The world has 13 years before the deadline it has set itself for achieving the Global
Goals. Company leaders will never have a better moment in which to align theirbusiness objectives with creating a better world.

102

Photo credit: Hailey Tucker and Giselle Marie Nizigiyimana

103

REFERENCES
Food and Agriculture Organization of the United Nations (FAO), 2015. The impact of disasters on agriculture andfood security. Available at: http://www.fao.org/3/a-i5128e.pdf.
1AlphaBeta analysis for the Business and Sustainable Development Commission, based on data from: Institute for
Economics and Peace, 2015. Global Peace Index 2015. Available at: http://economicsandpeace.org/wp-content/
uploads/2015/06/Global-Peace-Index-Report-2015_0.pdf.

2AlphaBeta analysis for the Business and Sustainable Development Commission, based on data from: United
Nations Environment Programme, 2010. The Economics of Ecosystems and Biodiversity (TEEB). Available at:
http://www.teebweb.org/.

3

UN Women, 2015. Facts and Figures: Economic Empowerment. Available at: http://www.unwomen.org/en/whatwe-do/economic-empowerment/facts-and-figures#_ednref9. Based on data from the World Bank Gender Data
Portal. Available at: http://datatopics.worldbank.org/gender/.

4

Edelman, 2017 (forthcoming). 2017 Edelman Trust Barometer: Annual Global Study. To be available at: http://www.
edelman.com/.

5

See: United Nations (UN). Sustainable Development Goals. Available at: http://www.un.org/
sustainabledevelopment/sustainable-development-goals/.

6

PricewaterhouseCoopers (PwC), 2015. Make it your business: Engaging with the Sustainable Development Goals.
Available at: https://www.pwc.com/gx/en/sustainability/SDG/SDG%20Research_FINAL.pdf.

68
Economic systems are defined as areas of economic activity with common value drivers. For example, the foodand agriculture economic system embraces all the economic activities that deliver value in the provision of food to
consumers, from fertilisers and farm production to logistics and grocery retail services.
9

See: https://www.unglobalcompact.org/what-is-gc/mission/principles.

10
Woetzel, J., Madgavkar, A., Ellingrud, K., Labaye, E., Devillard, S., Kutcher, E., Manyika, J., Dobbs, R., and Krishnan,M., 2015. The Power of Parity: How advancing women’s equality can add $12 trillion to global growth. McKinsey
Global Institute. Available at: http://www.mckinsey.com/global-themes/employment-and-growth/how-advancingwomens-equality-can-add-12-trillion-to-global-growth.

AlphaBeta, 2017. Valuing the SDG prize: Unlocking business opportunities to accelerate sustainable and inclusive
growth. Business and Sustainable Development Commission contributing paper. Available at: http://report.
businesscommission.org/.

11

AlphaBeta, 2016. Valuing the SDG prize in Food and Agriculture: Unlocking business opportunities to accelerate
sustainable and inclusive growth. Business and Sustainable Development Commission contributing paper.
Available at: http://businesscommission.org/our-work/valuing-the-sdg-prize-in-food-and-agriculture.

12

Schmidt-Traub, G., 2015. Investment Needs to Achieve the Sustainable Development Goals: Understanding theBillions and Trillions. SDSN Working Paper Version 2. United Nations Sustainable Development Solutions Network(UNSDSN), 12 November. Available at: http://unsdsn.org/wp-content/uploads/2015/09/151112-SDG-FinancingNeeds.pdf.

13International Labour Organization (ILO), 2016. Report IV: Decent work in global supply chains. International
Labour Conference, 105th Session, 2016. Geneva. Available at: http://www.ilo.org/wcmsp5/groups/public/--ed_norm/---relconf/documents/meetingdocument/wcms_468097.pdf.

14

15
United Nations Human Rights Office of the High Commissioner (UN OHCHR), 2011. Guiding Principles on
Business and Human Rights. New York and Geneva. Available at: http://www.ohchr.org/Documents/Publications/
GuidingPrinciplesBusinessHR_EN.pdf.

ILO, 2012. ILO Global Estimate of Forced Labour: Results and methodology. Special Action Programme to
Combat Forced Labour (SAP-FL). Available at: http://www.ilo.org/wcmsp5/groups/public/---ed_norm/--declaration/documents/publication/wcms_182004.pdf.

16

17
ILO, 2013. Making progress against child labour: Global estimates and trends 2000-2012. International
Programme on the Elimination of Child Labour (IPEC). Available at: http://www.ilo.org/wcmsp5/groups/public/--ed_norm/---ipec/documents/publication/wcms_221513.pdf.

104

18
United Nations World Commission on Environment and Development, 1987. Our Common Future. http://www.
un-documents.net/ourcommon-future.pdf.

Milanovic, B., 2012. Global Income Inequality by the Numbers: In History and Now – A Overview. World Bank
Policy Research Working Paper Series 6259, 1 November. Available at: http://heymancenter.org/files/events/
milanovic.pdf.
19

UN, 2015. The Millennium Development Goals Report 2015. Available at: http://www.un.org/
millenniumgoals/2015_MDG_Report/pdf/MDG percent202015 percent20rev percent20(July percent201).pdf.

20

21
Stockholm Resilience Centre, 2015. Planetary Boundaries - an update. Available at: http://www.
stockholmresilience.org/research/research-news/2015-01-15-planetary-boundaries---an-update.html.
22World Health Organization (WHO), 2016. Fact sheet: Tobacco, June 2016. Available at: http://www.who.int/
mediacentre/factsheets/fs339/en/.

WHO, 2016. Fact sheet: Obesity and overweight, June 2016. Available at: http://www.who.int/mediacentre/
factsheets/fs311/en/.

23

24
The United Nations Educational, Scientific and Cultural Organization (UNESCO), 2015. Institute for Statistics
and the Education for All Global Monitoring Report, 2015. A growing number of children and adolescents are out ofschool as aid fails to meet the mark. Policy Paper 22 / Fact Sheet 31, July. Availalble at: http://www.uis.unesco.org/
Library/Documents/fs31-out-of-school-children-and-adolescents-en.pdf.

UNESCO, 2014. Teaching and Learning: Achieving quality for all. 2013/4 Education for All Global Monitoring
Report. Available at: http://unesdoc.unesco.org/images/0022/002256/225654e.pdf.

25

26
Organisation for Economic Co-operation and Development (OECD), 2014. Focus on Inequality and Growth:
Does income inequality hurt economic growth?. Available at: https://www.oecd.org/social/Focus-Inequality-andGrowth-2014.pdf.

Oxfam, 2016. An Economy for the 1%: How privilege and power in the economy drive extreme inequality and how
this can be stopped. 210 Oxfam Briefing Paper, 16 January. Available at: https://www.oxfam.org/sites/www.oxfam.
org/files/file_attachments/bp210-economy-one-percent-tax-havens-180116-en_0.pdf.

27

AlphaBeta analysis for the Business and Sustainable Development Commission, based on data from: United
Nations Environment Programme, 2010. The Economics of Ecosystems and Biodiversity (TEEB). Available at:
http://www.teebweb.org/.

28

29
AlphaBeta analysis for the Business and Sustainable Development Commission, based on data from: Institute for
Economics and Peace, 2015. Global Peace Index 2015. Available at: http://economicsandpeace.org/wp-content/
uploads/2015/06/Global-Peace-Index-Report-2015_0.pdf.

International Monetary Fund (IMF), 2016.Corruption: Costs and Mitigating Strategies. IMF Staff Discussion Note,
May. Available at: https://www.imf.org/external/pubs/ft/sdn/2016/sdn1605.pdf.

30

31

See: http://unfccc.int/paris_agreement/items/9485.php.

32
UN. Sustainable Development Goals. Goal 17: Revitalize the global partnership for sustainable development.
Available at: http://www.un.org/sustainabledevelopment/globalpartnerships/.

The World Bank, 2016. Shock Waves: Managing the Impacts of Climate Change on Poverty. Available at: https://
openknowledge.worldbank.org/bitstream/handle/10986/22787/9781464806735.pdf.
33

34
BRS and GlobeScan, 2015. The State of Sustainable Business 2015: Annual Results. Available at: https://www.
bsr.org/reports/BSR_GlobeScan_State_of_Sustainable_Business_2015.pdf.
35
AlphaBeta, 2017. Valuing the SDG prize: Unlocking business opportunities to accelerate sustainable and inclusive
growth. Business and Sustainable Development Commission contributing paper.
36
Dobbs, R., Madgavkar, A., Barton, D., Labaye, E., Manyika, J., Roxburgh, C., Lund, S., Madhav, S., 2012. The world
at work: Jobs, pay and skills for 3.5 billion people. McKinsey Global Institute. Available at: http://www.mckinsey.
com/global-themes/employment-and-growth/the-world-at-work.

Based on analysis by the Business and Sustainable Development Commission team. Projections are based ondata from AlphaBeta, 2017, Valuing the SDG prize: Unlocking business opportunities to accelerate sustainable andinclusive growth.

37

105

Factors whose benefits and costs are not reflected in the market price of goods and service. Common negative
externalities arising from the production of goods and services are environmental damage or health risks toworkers involved.

38

Woetzel et al., 2015. The Power of Parity: How advancing women’s equality can add $12 trillion to global growth.
McKinsey Global Institute. Available at: http://www.mckinsey.com/global-themes/employment-and-growth/howadvancing-womens-equality-can-add-12-trillion-to-global-growth.

39

In business models based on a circular economy, physical resources are recaptured and reused as far as
possible. Resources go round and round rather than out of the earth and back into landfill, reducing waste andtotal resource consumption.

40

41
Food and Agriculture Organization of the United Nations (FAO), International Fund for Agricultural Development(IFAD), and World Food Programme (WFP), 2015. The State of Food Insecurity in the World. Meeting the 2015
international hunger targets: taking stock of uneven progress. Available at: http://www.fao.org/3/a-i4646e.pdf.

Albani, M., Oppenheim, J., Riese, J., and Schwarz, A., 2012. Reducing deforestation: The land-use revolution.
McKinsey on Sustainability and Resource Productivity, Summer 2012. Available at: http://www.mckinsey.com/~/
media/mckinsey/dotcom/client_service/sustainability/pdfs/mck%20on%20srp/srp_10_deforestation.ashx.

42

FAO, 2011. Global Food Losses and Food Waste - Extent, causes and prevention. Available at: http://www.fao.
org/docrep/014/mb060e/mb060e.pdf

43

Kitinoja, L., and Cantwell, M., 2010. Identification of appropriate postharvest technologies for improving market
access and incomes for small horticultural farmers in Sub-Saharan Africa and South Asia. Part 2: Postharvest Loss
Assessments. World Food Logistic Organization (WFLO).

44

United Nations Environment Programme (UNEP), 2014. Fact Sheet: REDD+ and the UN-REDD Programme. The
United Nations Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation in
Developing Countries, June. Available at: http://www.unep.org/russian/post2015/Portals/50262/Documents/
UNEP%20Publications/Partnerships/UN-REDD_About%20Fact%20Sheet.pdf.

45

46
See: Union of Concerned Scientists. What's Driving Deforestation? Available at: http://www.ucsusa.org/globalwarming/stop-deforestation/whats-driving-deforestation#.WFQHwvl97IU.
47
AlphaBeta analysis for the Business and Sustainable Development Commission, based on data from:The World
Bank. Global Consuption Database. Available at: http://datatopics.worldbank.org/consumption/.

United Nations Department of Economic and Social Affairs (UN DESA), 2014. World Urbanization Prospects.
Available at: http://www.un.org/en/development/desa/publications/2014-revision-world-urbanization-prospects.
html.

48

Woetzel, J., Ram, S., Mischke, J., Garemo, N., and Sankhe, S., 2014. A blueprint for addressing the global
affordable housing challenge. McKinsey Global Institute. Available at: http://www.mckinsey.com/global-themes/
urbanization/tackling-the-worlds-affordable-housing-challenge.

49

50
Institute for Health Metrics and Evaluation, 2016. Global Burden of Air Pollution: Deaths form air pollution in 2013.
Available at: http://www.healthdata.org/infographic/global-burden-air-pollution.

Dobbs, R., Sawers, C., Thompson, F., Manyika, J., Woetzel, J., Child, P., McKenna, S., and Spatharou, A., 2014.
Overcoming obesity: An initial economic analysis. McKinsey Global Institute. Available at: http://www.mckinsey.
com/industries/healthcare-systems-and-services/our-insights/how-the-world-could-better-fight-obesity.

51

Ellen MacArthur Foundation, Deutsche Post Foundation, and McKinsey Center for Business and Environment,2015. Growth Within: A circular economy vision for a competitive Europe. Available at: https://www.mckinsey.de/files/growth_within_report_circular_economy_in_europe.pdf.

52

The Global Commission on the Economy and Climate, 2014. Better Growth; Better Climate:The New Climate
Economy Report. The Synthesis Report. Available at: http://newclimateeconomy.report/2014/.

53

Woetzel et al., 2014. A blueprint for addressing the global affordable housing challenge. McKinsey Global
Institute. Available at: http://www.mckinsey.com/global-themes/urbanization/tackling-the-worlds-affordablehousing-challenge.

54

55
Woetzel et al., 2014. A blueprint for addressing the global affordable housing challenge. McKinsey Global
Institute.

Woetzel et al., 2014. A blueprint for addressing the global affordable housing challenge. McKinsey Global
Institute.

56

106

International Energy Agency (IEA), 2013. Transition to Sustainable Buildings: Strategies and Opportunities to2050. Available at: http://www.iea.org/publications/freepublications/publication/Building2013_free.pdf.

57

Bouton, S., Knupfer, S. M., Mihov, I., and Swartz, S., 2015. Urban mobility at a tipping point. McKinsey Quarterly,
September. Available at: http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/
our-insights/urban-mobility-at-a-tipping-point.

58

Dobbs, R., Oppenheim, J., Thompson, F., Brinkman, M., and Zornes, M., 2011. Resource Revolution: Meeting theworld’s energy, materials, food, and water needs. McKinsey Global Institute. Available at: http://www.mckinsey.
com/business-functions/sustainability-and-resource-productivity/our-insights/resource-revolution.

59

Dobbs et al., 2011. Resource Revolution: Meeting the world’s energy, materials, food, and water needs. McKinsey
Global Institute. Available at: http://www.mckinsey.com/business-functions/sustainability-and-resourceproductivity/our-insights/resource-revolution.

60

AlphaBeta analysis for the Business and Sustainable Development Commission, based on data from: McKinsey
Global Institute, 2012. Urban world: Cities and the rise of the consuming class. Available at: http://www.mckinsey.
com/global-themes/urbanization/urban-world-cities-and-the-rise-of-the-consuming-class.

61

62

IEA, 2015. World Energy Outlook 2015. Available at: http://www.worldenergyoutlook.org/weo2015/.

Ellen MacArthur Foundation, 2013. Towards the Circular Economy: Economic and business rationale for an
accelerated transition. Volume 1. (The data cited comes from Georg Mehlhart et al., European second-handcar market analysis, Öko-Institut working paper, February 2011; Eurostat, ELV waste database, 2011.) Available
at: https://www.ellenmacarthurfoundation.org/assets/downloads/publications/Ellen-MacArthur-FoundationTowards-the-Circular-Economy-vol.1.pdf.

63

The International Renewable Energy Agency (IRENA), 2016. Remap: Roadmap for a Renewable Energy Future,2016 Edition. Available at: http://www.irena.org/DocumentDownloads/Publications/IRENA_REmap_2016_
edition_report.pdf.
64

65

IRENA, 2016. Remap: Roadmap for a Renewable Energy Future, 2016 Edition.

66

IRENA, 2016. Remap: Roadmap for a Renewable Energy Future, 2016 Edition.

Ellen MacArthur Foundation, 2013. Towards the Circular Economy: Economic and business rationale for an
accelerated transition. Volume 1.
67

The Lancet Commissions, 2013. Global Health 2035: a world converging within a generation. The Lancet
Commission on Investing in Health. Available at: http://www.globalhealth2035.org/sites/default/files/report/
global-health-2035.pdf.
68

WHO, 2016. Fact sheet: Obesity and overweight, June 2016. Available at: http://www.who.int/mediacentre/
factsheets/fs311/en/.
69

WHO, 2005. Designing health financing systems to reduce catastrophic health expenditure, WHO Technical
Policy Brief. Available at: http://www.who.int/health_financing/pb_2.pdf.; and WHO, 2008. Coping with out-ofpocket health payments: empirical evidence from 15 African countries, Bulletin of the WHO, November. Available
at: http://www.who.int/bulletin/volumes/86/11/07-049403.pdf.

70Goldman Sachs, 2015. IoT: Digital Revolution comes to US healthcare. Goldman Sachs Global Investment
Research. Available at: http://www.scbio.org/resources/Documents/Internet%20of%20Things%20-%20
Volume%205%20-%20The%20Digital%20Revolution%20comes%20to%20US%20HC%20-%20Jun%2029,%20
2015%5B1%5D.pdf.
71

72
Manyika, J., Chui, M., Bughin, J., Dobbs, R., Bisson, P., and Marrs, A., 2013. Disruptive technologies: Advancesthat will transform life, business, and the global economy. McKinsey Global Institute. Available at: http://www.
mckinsey.com/business-functions/digital-mckinsey/our-insights/disruptive-technologies.

EY, 2014. Shaping your telehealth strategy: Leveraging telehealth technologies to lower costs, improve quality
outcomes and enhance the patient experience. Health Care Industry Post. Available at: http://www.ey.com/
Publication/vwLUAssets/EY-shaping-your-telehealth-strategy/%24FILE/EY-shaping-your-telehealth-strategy.pdf.
73

74
Kaka, N., Madgavkar, A., Manyika, J., Bughin, J., and Parameswaran, P., 2014. India’s technology opportunity:
Transforming work, empowering people. McKinsey Global Institute. Available at: http://www.mckinsey.com/
industries/high-tech/our-insights/indias-tech-opportunity-transforming-work-empowering-people.

107See for example: McCollum et al., 2013. Climate policies can help resolve energy security and air pollution
challenges. Climate Change, Vol. 119, 19 February. Available at: http://link.springer.com/article/10.1007/s10584013-0710-y.

75

Dobbs et al., 2011. Resource Revolution: Meeting the world’s energy, materials, food, and water needs. McKinsey
Global Institute.
76

77
Bonini, S., and Swartz, S., 2014. Profits with purpose: How organizing for sustainability can benefit the bottom
line. McKinsey & Company. Available at: http://www.mckinsey.com/business-functions/sustainability-andresource-productivity/our-insights/profits-with-purpose-how-organizing-for-sustainability-can-benefit-thebottom-line.

Whelan, T., and Fink, C., 2016. The Comprehensive Business Case for Sustainability. Harvard Business Review, 21
October. Available at: https://hbr.org/2016/10/the-comprehensive-business-case-for-sustainability.

78

Vidal, J., 2016. Kigali deal on HFCs is big step in fighting climate change. The Guardian, 15 October. Available at:
http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=27086&ArticleID=36283&l=en.
79

We Mean Business, 2014. The Climate has Changed: Why bold, low carbon action makes good businesssense. Available at: http://www.wemeanbusinesscoalition.org/sites/default/files/The%20Climate%20Has%20
Changed_2.pdf.

8081
Dow, 2011. Dow Enhances Global Energy Efficiency and GHG Reduction Leadership. Press release, 7 June.
Available at: http://newsroom.dow.com/press-release/company-news/dow-enhances-global-energy-efficiencyand-ghg-reduction-leadership.
82
Arabesque Partners, 2015. From the Stockholder to the Stakeholder: How sustainability
can drive financial outperformance. Available at: http://www.arabesque.com/index.php?tt_
down=51e2de00a30f88872897824d3e211b11.

Smiley, A. (2015) ‘What Millennial Employees Really Want’. Fast Company Leadership, 4 June. Available at:https://www.fastcompany.com/3046989/what-millennial-employees-really-want.

83

84

Smiley, A. (2015) ‘What Millennial Employees Really Want’. Fast Company Leadership, 4 June.

PwC, 2016. Putting Purpose to Work: A study of purpose in the workplace. Available at: http://www.pwc.com/us/
en/about-us/corporate-responsibility/assets/pwc-putting-purpose-to-work-purpose-survey-report.pdf.
85

Society for Human Resource Management, 2011. Advancing Sustainability: HR’s Role. Available at: https://www.
shrm.org/resourcesandtools/tools-and-samples/toolkits/documents/11-0066_advsustainhr_fnl_full.pdf.
86

Nielsen, 2015. Consumer-goods' brands that demonstrate commitment to sustainability outperform those that
don't. Press Release, 12 October. Available at: http://www.nielsen.com/ug/en/press-room/2015/consumer-goodsbrands-that-demonstrate-commitment-to-sustainability-outperform.html.
87

Unilever, 2015. Unilever sees sustainability supporting growth. Press Release, 3 June. Available at: https://www.
unilever.co.uk/news/press-releases/2015/unilever-sees-sustainability-supporting-growth.html.

88

Demailly, D., and Novel, A-S., 2014. The sharing economy: make it sustainable. IDDRI SciencesPo New Prosperity
Series, 14 July. Available at: http://www.iddri.org/Publications/Collections/Analyses/ST0314_DD percent20ASN_
sharing percent20economy.pdf.

89

Barter, P., 2013. “Cars are parked 95 percent of the time”. Let’s check. Reinventing Parking, 22 February. Available
at: http://www.reinventingparking.org/2013/02/cars-are-parked-95-of-time-lets-check.html.

90

Govindarajan, V., and Ramamurti, R., 2013. India’s Secret to Low-Cost Health Care. Harvard Business Review, 15
October. Available at: https://hbr.org/2013/10/indias-secret-to-low-cost-health-care.
91

Casabonnet, P., 2015. Brazil: The circular economy is a boost for the cellulose industries. Veolia, 13 January.
Available at: http://www.veolia.com/en/veolia-group/media/news/brazil-circular-economy-boost-celluloseindustries.

92

Desso. Corporate Responsbility: Road less travelled. Available at: http://www.desso-businesscarpets.com/
corporate-responsibility/the-road-less-travelled/.

93

94
Bauer, H., Patel, M., and Veira, J., 2014. The Internet of Things: Sizing up the opportunity. McKinsey & Company,
December. http://www.mckinsey.com/industries/high-tech/our-insights/the-internet-of-things-sizing-up-theopportunity.

108

Data-Pop Alliance, 2015. Reflections on Big Data and the Sustainable Development Goals: Measuring &Achieving Development Progress in the Big Data Era. Inputs to the Big Data and SDGs Chapter of the 2015 Global
Sustainable Development Report. Working Note, February. Available at: http://datapopalliance.org/wp-content/
uploads/2016/03/NoteBigDataSDGsGlobalSustDevReportELetouze percentCC percent812015.pdf.; Data from:
Wesolowski, A., Eagle, N., Tatem, A. J., Smith, D. L., Noor, A. M., Snow, R. W., and Buckee, C. O., 2012. Quantifying
the impact of human mobility on malaria. Science, 12 October, Vol 338, Issue 6104, pp 267-270.

95

96

See: http://www-03.ibm.com/ibm/history/ibm100/us/en/icons/deepthunder/.

97
Knowledge @ Wharton, 2014. What Big Data Can Mean for Sustainability. University of Pennsylvania, 12
September. http://knowledge.wharton.upenn.edu/article/what-big-data-means-for-sustainability/.
98

See: http://www.moringaschool.com/.

99

See: http://www.hackreactor.com/.

Accenture Strategy and the Global e-Sustainability Initiative, 2016. #SystemTransformation: How digitalsolutions will drive progress towards the sustainable development goals. Available at: https://www.accenture.com/
us-en/insight-global-esustainability-initiative-joint-report/.

100

101

See: https://uk.drive-now.com/

102
Davies, N., 2015. Novo Nordisk Reach out to Cities in the Fight against Diabetes. Eye for pharma. Available at:
http://social.eyeforpharma.com/commercial/novo-nordisk-reach-out-cities-fight-against-diabetes.
103

See: http://www.peekvision.org/.

104

See: https://transferwise.com/.

105

See: https://www.blablacar.com/.

Schechner, S., 2015. BlaBlaCar Valued at $1.5 Billion After New Funding Round. The Wall Street Journal, 16
September. Available at: http://www.wsj.com/articles/blablacar-joins-ranks-of-billion-dollar-venture-backedstartups-1442433577.
106

107
Fortune. Didi Chuxing: China’s ride-sharing unicorn takes on a pollution crisis. Available at: http://beta.fortune.
com/change-the-world/didi-chuxing-30.

One Million by One Million, 2016. Billion Dolar Unicorns: GuaHao Targets China’s Healthcare. Billion Dollar
Unicorn Series, 17 June. Available at: http://www.sramanamitra.com/2016/06/17/billion-dollar-unicorns-guahaotargets-chinas-healthcare/.

108

International Finance Corporation (IFC), 2016. Built for Change: Inclusive business solutions for the base of
the pyramid. Available at: https://www.ifc.org/wps/wcm/connect/44bbb896-2899-4ed3-9967-204e1ff954d6/
Built+for+Change_FINAL_low+res.pdf?MOD=AJPERES.

109

USAID, 2016. mHealth Compendium. Special Edition 2016: Reaching Scale. Available at: http://www.
unicefstories.org/wp-content/uploads/2016/08/mHealth-Compendium-Special-Edition-2016-Reaching-Scale-.
pdf.

110

111

USAID, 2016. mHealth Compendium. Special Edition 2016: Reaching Scale.

Nissan Insider. Nissan and ENEL launch first smart grid trials. Available at: http://nissaninsider.co.uk/nissanand-enel-launch-first-smart-grid-trials/#!prettyPhoto.

112

113
Nissan, 2016. Nissan and Enel launch groundbreaking vehicle-to-grid project in the UK. Nissan Great Britain
Press Release, 10 May. Available at: http://www.newsroom.nissan-europe.com/uk/en-gb/Media/Media.
aspx?mediaid=145248.

Edie, 2016. Energy storage could save UK £2.4bn every year. Edie newsroom, 4 March. Available at: http://www.
edie.net/news/11/Regulatory-reforms-and-energy-storage-systems-could-create--2-4bn-windfall-for-UK-energymarket/#.VzHSPmGYRn4.twitter.
114

115

See: http://www.echale.com.mx/en/.

Piazzesi, F., and Rodríguez Díaz, S. Member Spotlight: ¡Échale! a Tu Casa. The Guardian Sustainable Business.
Available at: https://www.theguardian.com/sustainable-business/member-spotlight-echale-a-tu-casa.
116

Business Call to Action. Case study: ¡Échale! a Tu Casa: Providing Low-Income Families Opportunities for Home
Ownership. Available at: http://www.businesscalltoaction.org/wp-content/files_mf/bctacasestudy_echale_web.
pdf.

117

109

118

See: http://merckformothers.com/index.html.

119
Merck for Mothers. Senegal Fact Sheet. Available at: http://merckformothers.com/docs/Senegal_fact_sheet.
pdf.
120
Daff, B.M., Seck, C., Belkhayat, H., and Sutton, P., 2014. Informed push distribution of contraceptives in Senegal
reduces stockouts and improves quality of family planning services. Global Health: Science and Practice, May13;2(2):245-52. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4168620/.

The Global Reporting Initiative (GRI), the United Nations Global Compact (UNGC), and the World BusinessCouncil for Sustainable Development (WBCSD), 2015. SDG Compass: The guide for business action on the SDGs.
Available at: http://sdgcompass.org/wp-content/uploads/2016/05/019104_SDG_Compass_Guide_2015_v29.pdf.

121

Ericsson, 2015. Technology for good: Ericsson Sustainability and Corporate Responsibility Report 2015.
Available at: https://www.ericsson.com/assets/local/about-ericsson/sustainability-and-corporate-responsibility/
documents/2015-corporate-responsibility-and-sustainability-report.pdf.

122

123

See: https://www.unglobalcompact.org/what-is-gc/mission/principles.

Demirguc-Kunt, A., Klapper, L., Singer, D., and Van Oudheusden, P., 2014. The Global Findex Database 2014:
Measuring Financial Inclusion around the World. World Bank Policy Research Working Paper 7255. Available at:
http://documents.worldbank.org/curated/en/187761468179367706/pdf/WPS7255.pdf#page=3.

124

125
Runde, D., 2015. M-Pesa And The Rise Of The Global Mobile Money Market. Forbes, 12 August. Available
at: http://www.forbes.com/sites/danielrunde/2015/08/12/m-pesa-and-the-rise-of-the-global-mobile-moneymarket/#7ffa810723f5.

The Abraaj Group. Annual Review 2014/2015: Our Thematic Strategies. Available at: http://www.abraaj.com/
news-and-insight/annual-review-2015/healthcare/.

126

The Abraaj Group, 2016. Abraaj Growth Markets Health Fund (AGHF), September 2016. Unpublished internal
document.

127

The World Bank, 2014. Infographic: Global Findex 2014 – Gender and Income. Available at: http://www.
worldbank.org/en/programs/globalfindex/infographics/infographic-global-findex-2014-gender-income.
128

129

The World Bank, 2014. Infographic: Global Findex 2014 – Gender and Income.

See: http://www2.unwomen.org/-/media/headquarters/attachments/sections/library/publications/2011/10/
women-s-empowerment-principles_en%20pdf.pdf?v=1&d=20141013T121504.

130

United Nations Secretary-General's High-Level Panl on Women's Economic Empowerment, 2016. Leave No One
Behind: A Call to Action for Gender Equality. Available at: http://www.womenseconomicempowerment.org/assets/
reports/UNWomen%20Full%20Report.pdf.
131

GSMA, 2015. Bridging the gender gap: Mobile access and usage in low- and middle-income countries.
Connected Women. http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2016/02/
GSM0001_03232015_GSMAReport_NEWGRAYS-Web.pdf.

132

133
Vodafone. Sustainability Report 2014: Transformational Solutions - Women. Available at: https://www.vodafone.
com/content/sustainabilityreport/2014/index/transformationalsolutions/women.html.
134
The Guardian, 2015. Rana Plaza collapse: dozens charged with murder. Associated Press in Dhaka, 1 June.
Available at: https://www.theguardian.com/world/2015/jun/01/rana-plaza-collapse-dozens-charged-with-murderbangladesh.

Nelson, J., 2017 (forthcoming). Partnerships for Sustainable Development: Collective action by business,governments and civil society to achieve scale and transform markets. Business and Sustainable Development
Commission contributing paper. To be available at: http://businesscommission.org/.

135

The Consumer Goods Forum, 2010. Deforestation Resolution. November. Available at: http://www.
theconsumergoodsforum.com/sustainability-strategic-focus/sustainability-resolutions/deforestation-resolution.

136

Global Agri-Business Alliance, 2016. Charter for the Global Agri-Business Alliance (GAA). GAA, 13 September.
Available at: http://olamgaa.wpengine.com/wp-content/uploads/2016/09/Global-Agri-business-Alliance-Charter.
pdf.

137

See: GSMA, 2016. 2016 Mobile Industry Impact Report: Sustainable Development Goals. Available at: http://
www.gsma.com/betterfuture/wp-content/uploads/2016/09/_UN_SDG_Report_FULL_R1_WEB_Singles_LOW.
pdf.
138

110

139
World Cocao Foundation, 2014. Cocoa Market Update. Available at: http://www.worldcocoafoundation.org/wpcontent/uploads/Cocoa-Market-Update-as-of-4-1-2014.pdf.

United States Department of Labor (USDOL). 2015 Findings on the Worst Forms of Child Labor: Côte d'Ivoire.
Bureau of International Labor Affairs, Child Labor and Forced Labor Reports. Available at: https://www.dol.gov/
sites/default/files/images/ilab/child-labor/CotedIvoire.pdf.
140

141
USDOL. 2015 Findings on the Worst Forms of Child Labor: Côte d'Ivoire. Bureau of International Labor Affairs,
Child Labor and Forced Labor Reports; Global Mark Against Child Labour. Child Labour In The Cocoa Farms Of
Ivory Coast And Ghana. Available at: http://www.globalmarch.org/content/child-labour-cocoa-farms-ivory-coastand-ghana.

USDOL. 2015 Findings on the Worst Forms of Child Labor: Côte d'Ivoire. Bureau of International Labor Affairs,
Child Labor and Forced Labor Reports.

142

143

See: http://www.worldcocoafoundation.org/about-wcf/cocoaaction/.

Chazan, G., 2016. Eon swings to a loss after €2.9bn writedown. Financial Times, 10 August. Available at: https://www.ft.com/content/5885d34a-5ebd-11e6-bb77-a121aa8abd95.

144

Fickling, D., 2016. Coal’s Stranded Assets. Bloomberg, 10 May. Available at: https://www.bloomberg.com/
gadfly/articles/2016-05-10/coal-s-stranded-assets#footnote-1462855087374.

145

Trucost, 2013. Natural Capital at Risk: The Top 100 Externalities of Business. Available at: http://www.trucost.
com/published-research/99/natural-capital-at-risk-the-top-100-externalities-of-business.
146

147

Trucost, 2013. Natural Capital at Risk: The Top 100 Externalities of Business.

The Global Commission on the Economy and Climate, 2016. The Sustainable Infrastructure Imperative:
Financing for Better Growth and Development. The 2016 New Climate Economy report. Available at: http://
newclimateeconomy.report/2016/.

148

The Global Commission on the Economy and Climate, 2014. Better Growth; Better Climate:The New Climate
Economy Report. The Synthesis Report. Available at: http://newclimateeconomy.report/2014/.

149

Telefonica. Telefónica announces that 50 percent of their electricity consumption will come from renewableenergy sources by 2020. Available at: https://www.telefonica.com/es/web/press-office/-/telefonica-announcesthat-50-of-their-electricity-consumption-will-come-from-renewable-energy-sources-by-2020.

150

151

See: http://www.carbonpricingleadership.org/.

152
The World Business Council for Sustainable Development (WBCSD). Building the Social Capital Protocol:
Insights into employment, skills and safety. Available at: http://www.wbcsd.org/Clusters/Social-Impact/
Resources/Building-the-Social-Capital-Protocol-Insights-into-employment-skills-and-safety.

Conscious Company Magazine. Efficiency at New Belgium. Issue 1, Winter 2015. Available at: http://www.
consciouscompanymagazine.com/blogs/press/16059729-efficiency-at-new-belgium.

153

154
Mazzucato, M., 2011. The Entrepreneurial State. Demos. Available at: https://www.demos.co.uk/files/
Entrepreneurial_State_-_web.pdf.
155

See: http://www.gavi.org/.

The Boston Consulting Group, 2015. The Advance Market Commitment Pilot for Pneumococcal Vaccines:
Outcomes and impact evaluation. Available at: http://www.gavi.org/results/evaluations/pneumococcal-amcoutcomes-and-impact-evaluation/.

156

Mission Innovation. Baseline and Doubling Plans. Available at: http://www.mission-innovation.net/our-work/baseline-and-doubling-plans/.

157

158

See: http://mission-innovation.net/.

159

See: http://www.b-t.energy/coalition/.

160

See: http://www.darpa.mil/ and https://arpa-e.energy.gov/.

161

See: http://3gf.dk/.

Schmidt-Traub, G., 2015. Investment Needs to Achieve the Sustainable Development Goals: Understanding theBillions and Trillions. SDSN Working Paper Version 2. United Nations Sustainable Development Solutions Network(UNSDSN), 12 November.

162

111

163
Ro, S., 2015. Here's what the $294 trillion market of global financial assets looks like. Business Insider, 11
February. http://www.businessinsider.com/global-financial-assets-2015-2.
164
UNEP, 2015. The Financial System We Need: Aligning the Financial System with Sustainable Development.
Inquiry into the Design of a Sustainable Financial System. Available at: http://unepinquiry.org/wp-content/
uploads/2015/11/The_Financial_System_We_Need_EN.pdf.

Cox, J., 2016. There are now $11.7 trillion worth of bonds with negative yields. CNBC, 29 June. Available at: http://
www.cnbc.com/2016/06/29/there-are-now-117-trillion-dollars-worth-of-bonds-with-negative-yields.html.
165

Barton, D., Bailey, J., and Zoffer, J., 2016. Rising to the challenge of short-termism. FCLT Global. Available at:
http://www.fcltglobal.org/docs/default-source/default-document-library/fclt-global-rising-to-the-challenge.
pdf?sfvrsn=0.
166

167
Eccles, R. G., Ioannou, I., and Serafeim, G., 2011. The Impact of Corporate Sustainability on Organizational
Processes and Performance. SSRN, 23 November. https://ssrn.com/abstract=1964011.
168
Principles for Responsible Investment (PRI), 2004. Signatory base AUM hits $59 trillion. PRI Association. https://www.unpri.org/page/signatory-base-aum-hits-59-trillion.

Flood, C., 2016. HSBC’s UK pension scheme to invest £1.85bn in eco-friendly fund. Financial Times, 7 November.
Available at: https://www.ft.com/content/a5af8328-a4ef-11e6-8898-79a99e2a4de6.

169

170
KPMG, 2015. Survey of Corporate Responsibility Reporting, Currents of Change. Available at: https://
assets.kpmg.com/content/dam/kpmg/pdf/2016/02/kpmg-international-survey-of-corporate-responsibilityreporting-2015.pdf.

For more on existing sustainable reporting, see: Working Group on Environmental Auditing (WGEA), 2013.
Sustainability Reporting: Concepts, Frameworks and the Role of Supreme www.environmental-auditing.
org Audit Institutions. INTOSAI, June. Availlable at: http://www.environmental-auditing.org/LinkClick.
aspx?fileticket=vM4hrHlBd0s percent3D&tabid=128&mid=568.

171

PwC, 2014. Sustainability goes mainstream: Insights into investor views. http://www.pwc.com/us/en/pwcinvestor-resource-institute/publications/assets/pwc-sustainability-goes-mainstream-investor-views.pdf.

172

173

See: http://accesstomedicineindex.org/.

See: OECD. G20/OECD Principles of Corporate Governance. Available at: https://www.oecd.org/corporate/
principles-corporate-governance.htm.

174

175
IMF, 2014. World Economic Outlook report. Chapter 3: Is it time for an infrastructure push? The macroeconomic
effects of public investment. Available at: http://www.imf.org/external/pubs/ft/survey/so/2014/res093014a.htm.
176
Dobbs, R., Pohl, H., Lin, D-Y., Mischke, J., Garemo, N., Hexter, J., Matzinger, S., Palter, R., and Nanavatty, R., 2013.
Infrastructure productivity: How to save $1 trillion a year. McKinsey Global Institute. Available at: http://www.
mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/infrastructure-productivity.

The Global Commission on the Economy and Climate, 2014. Better Growth; Better Climate:The New Climate
Economy Report. The Synthesis Report.

177

The Global Commission on the Economy and Climate, 2016. The Sustainable Infrastructure Imperative:
Financing for Better Growth and Development. The 2016 New Climate Economy report.

178

Bhattacharya, A., Oppenheim, J., and Stern, N., 2015. Driving Sustainable Development Through Better
Infrastructure: Key Elements of a Transformation. Global Economy and Development Working Paper 91,
July. Available at: https://www.brookings.edu/wp-content/uploads/2016/07/07-sustainable-developmentinfrastructure-v2.pdf.
179

180

See: www.weforum.org/reports/blended-finance-toolkit/.

181
The World Bank, 2015. From Billions to Trillions - Transforming Development Finance. Post-2015 Financing
for Development: Multilateral Development Finance. Development Committee, 2 April. Available at: http://www.
worldbank.org/en/news/press-release/2015/04/16/joint-statement-mdbs-imf-head-financing-for-development.
182
Bhattacharya et al., 2015. Driving Sustainable Development Through Better Infrastructure: Key Elements of aTransformation. Global Economy and Development Working Paper 91, July.

IFC, 2016. The First Six Decades: Leading the Way in Private Sector Development. Available at: https://
openknowledge.worldbank.org/bitstream/handle/10986/25402/109806-WP-IFC-History-Book-Web-VersionOUO-9.pdf?sequence=1&isAllowed=y.

183

112

IFC, 2009. In a Historic Step, IFC Launches Subsidiary to Manage Third-Party Capital for Development.
Press Release, 7 May. Available at: http://ifcext.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/
FD0A212B06FCC317852575AF00646966.

184

Standard and Poor’s Ratings Services, 2016. How Much Can Multilateral Lending Institutions Up the Ante?
Available at: http://www.alacrastore.com/s-and-p-credit-research/How-Much-Can-Multilateral-LendingInstitutions-Up-The-Ante-1730227.
185

Humphrey, C., 2015. Infrastructure Finance in the Developing World: Challenges and Opportunities forMultilateral Development Banks in 21st Century Infrastructure Finance. The Global Green Growth Institute (GGGI)
and the Intergovernmental Group of Twenty Four on Monetary Affairs and Development (G-24) Working Paper
Series. Available at: http://g24.org/wp-content/uploads/2016/05/MARGGK-WP08.pdf.
186

The World Bank, 2016. The World Bank and BNP Paribas Team Up to Promote the 2030 Agenda Sustainable
Development Goals through Innovative Finance. World Bank Press Release, 12 December. Available at: http://treasury.worldbank.org/cmd/htm/World-Bank-BNP-Paribas-TeamUp-2030-Agenda-Sustainable-Develop-GoalsInnovative-Finance.html.
187

See: Nam Theun 2 Watershed Management and Protection Authority (NT2 WMPA). http://www.nt2wmpa.gov.
la/en/about/.

188

Zachau, U., and Times, V., 2015. Can We Make Hydropower Work for All in Laos?. World Bank News, 14 May.
Available at: http://www.worldbank.org/en/news/opinion/2015/05/14/can-we-make-hydropower-work-for-all-inlaos.

189

Sinha, S., 2007. Nam Theun 2 (NT2) Hydorelectric Project. World Bank Group and Indian Institute ofManagement, January. https://ppiaf.org/sites/ppiaf.org/files/documents/toolkits/Cross-Border-InfrastructureToolkit/Cross-Border percent20Compilation percent20ver percent2029 percent20Jan percent2007/Resources/
Sinha percent20- percent20Case percent20Study percent20Nam percent20Theun.pdf.

190

191

Zachau, U., and Times, V., 2015. Can We Make Hydropower Work for All in Laos?. World Bank News, 14 May.

192
See: Inderst, G., 2010. Infrastructure as an Asset Class. Pensions Institute, EIB papers volume 15, issue 1.
Available at: http://pensions-institute.org/workingpapers/wp1103.pdf.
193

See: http://www.efr.be/.

Wilson, M., 2016. UK life insurers can help boost infrastructure. Financial Times, 21 November. Available at:https://www.ft.com/content/11256eac-acf6-11e6-ba7d-76378e4fef24.

194

195

See: https://www.fsb-tcfd.org/.

196

See: http://web.unep.org/inquiry/.

197

See: http://www.cgdev.org/initiative/development-impact-bonds-0.

Center for Global Development, 2013. Investing in Social Outcomes: Development Impact Bonds. The Report of
the Development Impact Bond Working Group. Available at: http://www.cgdev.org/sites/default/files/investing-insocial-outcomes-development-impact-bonds.pdf.
198

199
European Investment Bank (EIB). Climate Awareness Bonds. Available at: http://www.eib.org/investor_
relations/cab/index.htm?lang=en.

Climate Bonds Initiative, 2015. 2015 Green Bond Market Roundup. Available at: http://www.climatebonds.net/
files/files/2015%20GB%20Market%20Roundup%2003A.pdf.

200

Shankleman, J., 2016. Green Bond Market Will Grow to $158 Billion in 2016, HSBC Says. Bloomberg, 26 January.
Available at: https://www.bloomberg.com/news/articles/2016-01-26/green-bond-market-will-grow-to-158-billionin-2016-hsbc-says.

201

202
RBC Capital Markets, 2014. Green Bonds, Fifty shades of green. http://www.rbc.com/communitysustainability/_assets-custom/pdf/Green-Bonds-Fifty-Shades-of-Green.pdf.

Mainelli, M., and Mills, S., 2017 (forthcoming). Financial Innovations and Sustainable Development. Z/
Yen. Business and Sustainable Development Commission contributing paper. To be available at: http://businesscommission.org/.

203

204

See: https://www.kiva.org/about.

Holzheu, T., 2016. Underinsurance of property risks: closing the gap. Swiss RE Sigma. Available at: http://www.
verisk.com/property-claim-services-v/2016/Speaker-Holzheu-Thomas.pdf.

205

113

206
Munich Climate Insurance Initiative. Climate Risk Adaptation and Insurance in the Caribbean: Project Overview.
Available at: http://www.climate-insurance.org/projects/climate-risk-adaptation-and-insurance-in-thecaribbean/.

Mainelli, M., and Mills, S., 2017 (forthcoming). Financial Innovations and Sustainable Development. Z/
Yen. Business and Sustainable Development Commission contributing paper. To be available at: http://businesscommission.org/.

207

208
OECD, 2014. Trends in Income Inequality and its Impact on Economic Growth. Available at: http://www.oecd.
org/newsroom/inequality-hurts-economic-growth.htm.
209
Milanovic, B., 2012. Global Income Inequality by the Numbers: In History and Now – A Overview. World Bank
Policy Research Working Paper Series 6259, 1 November. Available at: http://heymancenter.org/files/events/
milanovic.pdf.

UN, 2015. The Millennium Development Goals Report 2015. Available at: http://www.un.org/
millenniumgoals/2015_MDG_Report/pdf/MDG percent202015 percent20rev percent20(July percent201).pdf.
210

The World Bank, 2016. Poverty and Shared Prosperity 2016: Taking on Inequality. Washington, DC. Available at:https://openknowledge.worldbank.org/bitstream/handle/10986/25078/9781464809583.pdf.
211

UNDESA, 2015. Youth population trends and sustainable development. Population Facts No.2015/01, May.
Available at: http://www.un.org/en/development/desa/population/publications/pdf/popfacts/PopFacts_2015-1.
pdf.
212

IFC, 2013. IFC Jobs Study: Assessing private sector contributions to job creation and poverty reduction.
Available at: https://www.ifc.org/wps/wcm/connect/0fe6e2804e2c0a8f8d3bad7a9dd66321/IFC_
FULL+JOB+STUDY+REPORT_JAN2013_FINAL.pdf?MOD=AJPERES.

213

214
ILO, 2016. World Employment Social Outlook: Trends 2016. Available at: http://www.ilo.org/wcmsp5/groups/
public/---dgreports/---dcomm/---publ/documents/publication/wcms_443480.pdf.

ILO, 2015. Global Employment Trends for Youth 2015: Scaling up investments in decent jobs for youth. Available
at: http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/
wcms_412015.pdf.

215

See: Sadowski, J., 2016. Why Silicon Valley is embracing universal basic income. The Guardian, 22 June.
Available at: https://www.theguardian.com/technology/2016/jun/22/silicon-valley-universal-basic-income-ycombinator.

216

217

IFC, 2013. IFC Jobs Study: Assessing private sector contributions to job creation and poverty reduction.

218
OECD, 2011. Governance at a Glance 2011. Available at: http://www.oecd-ilibrary.org/sites/gov_glance-2011en/05/01/index.html?itemId=/content/chapter/gov_glance-2011-27-en.

ILO, 2013. The Prevention of Occupational Diseases. Available at: http://www.ilo.org/wcmsp5/groups/public/--ed_protect/---protrav/---safework/documents/publication/wcms_208226.pdf.

219

220
ILO, 2014. Strengthening the global fight against all forms of forced labour. The Protocol to the Forced Labour
Convention. Available at: http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---declaration/documents/
publication/wcms_321414.pdf.
221
ILO, 2015. World Report on Child Labour 2015: Paving the way to decent work for young people. International
Programme on the Elimination of Child Labour (IPEC). Available at: http://www.ilo.org/ipec/Informationresources/
WCMS_358969/lang--en/index.htm.
222

See: http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf.

223

See: http://www.ilo.org/global/programmes-and-projects/WCMS_084616/lang--en/index.htm.

Hadwiger, F., 2015. Global framework agreements: Achieving decent work in global supply chains. International
Journal of Labour Research. Available at: http://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---actrav/
documents/meetingdocument/wcms_434248.pdf.

224

Shift, 2016. Business, Human Rights and the Sustainable Development Goals: Forging a coherent visionand strategy. Business and Sustainable Development Commission contributing paper. Available at: http://businesscommission.org/our-work/business-human-rights-and-the-sdgs.
225

ILO, 2016. Report IV: Decent work in global supply chains. International Labour Conference, 105th Session, 2016.
Geneva.

226

114

227
UN Women, 2016. UN Women Annual Report 2015-2016. Available at: http://annualreport.unwomen.org/
en/2016.

UN Women, 2015. Facts and Figures: Economic Empowerment. Available at: http://www.unwomen.org/en/
what-we-do/economic-empowerment/facts-and-figures. Based on data from the World Bank Gender Data Portal.
Available at: http://datatopics.worldbank.org/gender/

228

Grant Thornton, 2015. Women in business: the path to leadership. Grant Thornton International Business
Report. Available at: http://www.grantthornton.global/globalassets/1.-member-firms/global/insights/ibr-charts/
ibr2015_wib_report_final.pdf.

229

230

UN Women, 2015. Facts and Figures: Economic Empowerment.

231
UN Women, Progress of the World’s Women 2015-2016. Chapter 2, p. 84. Available at: http://progress.unwomen.
org/en/2015/pdf/UNW_progressreport.pdf. Based on data from: EuroStat, 2014. Available at: http://ec.europa.eu/
eurostat.

OECD, 2013. Public expenditure on active labour market policies. Employment and Labour Markets: Key Tablesfrom OECD, No. 9. Available at: http://dx.doi.org/10.1787/lmpxp-table-2013-1-en.

232

233
UNESCO, 2016. Leaving no one behind: How far on the way to universal primary and secondary
education?. UNESCO Policy Paper 27, Fact Sheet 37, July. Available at: http://unesdoc.unesco.org/
images/0024/002452/245238E.pdf.
234

UNESCO, 2014. Education for All Global Monitoring Report 2013/14.

235

UNDESA, 2015. Youth population trends and sustainable development. Population Facts No.2015/01, May.

UN, 2013. The Millennium Development Goals Report 2013. Available at: http://www.un.org/millenniumgoals/
pdf/report-2013/mdg-report-2013-english.pdf.

236

The Nation's Report Card, 2015. Mathematics & Reading at Grade 12. Available at: http://www.
nationsreportcard.gov/reading_math_g12_2015/#mathematics/acl.
237

World Economic Forum (WEF), 2015. Disrupting Unemployment: Business-led Solutions for Action. WEF
Employment, Skills and Human Capital Global Challenge Insight Report, April. Available at: http://www3.weforum.
org/docs/WEF_DisruptingUnemployment_Report_2015.pdf.
238

239

See: http://educationcommission.org/.

240

See: https://www.generationinitiative.org/about/.

241

McKinsey & Company. Generation. Available at: http://www.mckinsey.com/about-us/social-impact/generation.

242
McKinsey Social Initiative, 2016. Generation June 2016 Update. Available at: https://www.generationinitiative.
org/newsletter/june2016/.
243

Generation Initiative. Employers. Available at: https://www.generationinitiative.org/employers/.

244
Mooney, A., and Marriage, M., 2016. $200bn drained from equity funds since start of 2016. Financial Times, 13
November. Available at: https://www.ft.com/content/4777c866-a773-11e6-8898-79a99e2a4de6.
245

Mars. The Five Principles. Available at: http://mars.com/global/about-us/five-principles.

Practical Impact Alliance, 2015. Best Practices for BoP Door-to-Door Distribution. Available at: http://www.
bopinc.org/sites/www.bopinc.org/files/updates/bop_d2d_pages_v12.pdf.

246

247

Practical Impact Alliance, 2015. Best Practices for BoP Door-to-Door Distribution.

248
Unilever. Lifebuoy’s 1 billion ambition. Available at: https://www.unilever.com/sustainable-living/thesustainable-living-plan/improving-health-and-well-being/health-and-hygiene/changing-hygiene-habits-forbetter-health/Lifebuoys-one-billion-ambition.html.

Unilever. Towards universal handwashing with soap: Social Mission Report – 2015. Lifebuoy Way of life.
Available at: https://www.unilever.com/Images/lifebuoy-way-of-life-2015_tcm244-418692_en.pdf.
249

Ram, A., 2016. MSCI takes aim at corporate tax avoidance. Financial Times, 13 November. Available at: https://www.ft.com/content/b12b120c-a80b-11e6-8b69-02899e8bd9d1.
250

251

See: http://www.xprize.org/.

115

ACKNOWLEDGEMENTS
The Commission is grateful to the many organisations and individuals that havemade substantial contributions to the Commission’s programme of work. They are,however, not responsible for the accuracy, content, findings or recommendations.
The findings do not necessarily reflect their views nor those of the organisations
they represent.
Aavishkaar Intellecap GroupThe Abraaj GroupAccenture plc
African Development Bank GroupThe Al-Dabbagh GroupThe Alibaba Group
AlphaBeta
Australian Council for International
Development (ACFID)
Avaaz
Aviva plc
The B TeamThe Bill and Melinda Gates Foundation
The Brookings Institution
Cambridge Judge Business School
Corporate Citizenship
The Dalberg Group
Deutsche Bank AGDoğan Group
EdelmanForesight Economics Ltd
FSG Social Impact Advisors

The Global Commission on the
Economy and Climate
Green Economy Coalition
The Grundfos GroupThe GSM Association (GSMA)
Harvard Business School
Harvard Kennedy School ofGovernment
Hewlett Packard Enterprise
HystraIFC Asset Management Company
LLC
InfluenceMap
The International Center for Tradeand Sustainable Development(ICTSD)The International Chamber ofCommerce (ICC)The Education Commission
The International Institute forApplied Systems Analysis (IIASA)The International Monetary Fund
(IMF)

GITI GroupThe International Trade Union
Confederation (ITUC)

Global Action Plan

Investec Asset Management116Lagos Deep Offshore Logistics Base(LADOL)Lee Kuan Yew School of Public Policy

The Toilet Board Coalition
The UBS Group AG

The Made in Africa Initiative

The UK Department for International
Development (DFID)

Mars, Inc.

Unilever

McKinsey Global Institute

The United Nations Children's Fund
(UNICEF)

McKinsey Social Initiative
Merck & Co. Inc.
MMG Limited

The United Nations Environment
Programme (UNEP)

The Mo Ibrahim Foundation

The United Nations Executive Office of
the Secretary General (EOSG)National Management Holding 'Baiterek'

The United Nations Foundation (UNF)

The Federal Ministry of Environment,
Nigeria

The United Nations Global Compact(UNGC)

Olam International
The Organisation for Economic Cooperation and Development (OECD)The United Nations Sustainable
Development Solutions Network (UNSDSN)

The Overseas Development Institute(ODI)

United States Agency for International
Development (USAID)

Pearson plc

VolansPlumen

Winston Eco-Strategies Llc

PricewaterhouseCoopers International(PwC)

Within People

The Rockefeller Foundation

Women’s World Banking

Safaricom Limited

The World Bank Group

Save the Children Fund

The World Business Council for
Sustainable Development (WBCSD)The Schwab Foundation for Social
EntrepreneurshipWithoutViolence

The World Economic Forum (WEF)

Shift

The World Resources Institute (WRI)

Singularity University

X Prize Foundation

SYSTEMIQ
The Tellus Mater Foundation

Yara International ASA
Z/Yen Group Ltd.

Temasek Holdings Private Ltd

117

THE PROJECT TEAM
The report team for Better Business, Better World has comprised:
Jeremy Oppenheim (Programme Director), Olivia Boyd, Gina Campbell, Nishita
Dewan, Alex Evans, Melinda George, Saira George, Gail Klintworth, Alessandra
Kortenhorst, Dinah McLeod, Janez Potocnik, Corinne Sawers, Aniket Shah

The wider project team has comprised:
Nedaa AlMubarak, Caroline Anstey, Mirza Baig, Nikki Barber, Karen Basiye, Pritika
Bathija, Sean Batten, James Bilefield, Toby Brennan, Chris Brett, Kaysie Brown,
Tony Burdon, Rianne Buter, Paula Caballero, Kathy Calvin, James Cameron, Lloyd
Cameron, Chris Cannan, Arne Cartridge, Joe Cerrell, Chan Si Hui, Andrew Charlton,
Cheo Hock Kuan, Chua Eu Jin, Kerry Conway, Elizabeth Cousens, Alfonso Daniels,
Nathalie Delapalme, Pratik Desai, Marisa Donnelly, Joanne Driels, John Elkington,
Blair FitzGibbon, Catherine Foster, Douglas Frantz, Amanda Gardiner, Helene
Gayle, Stephen Gelb, Julie Gerberding, Daniel Gimenez, Jonathan Glennie, Tanja
Gonggrijp, Richard Gower, Brimbelle Grandcolas, Richard Hardyment, Inge Herman
Rydland, Celine Herweijer, David Higgins, Gabriella Hillgren, Lisbeth D. Jespersen,
Heather Johnson, Rajiv Joshi, Louise Kantrow, Akanksha Kapoor, Zanna Karsan, Zia
Khan, Homi Kharas, Niclas Kjellström-Matseke, Mark Kramer, Paul Larsen, Carina
Larsfalten, Charles Leadbeater, Alice Lépissier, Bo Lidegaard, Jacqueline Lim,
Jessica Long, Carmen López-Clavero, Ole Lund Hansen, Kishore Mahbubani,
Michael Mainelli, Lisa Manley, Robbie Marwick, Paul Mason, Erica Matthews, Jeffery
May, Marc Mazairac, John McArthur, Ricardo Melendez-Ortiz, Albena Melin, Karen
Miller, Amina Mohamed, Ask Møller-Nielsen, Terje Morten Tollefsen, Austin
Morton, Elisa Moscolin, Pauliina Murphy, James Mwangi, David Nabarro, Jane
Nelson, NEO Gim Huay, NG Boon Heong, Laura Nielsen, Roel Nieuwenkamp, Kim
Nøhr Skibsted, Paul Nowak, Clare Oh, Mari Pangestu, Barry Parkin, Celia Partridge,
Rupali Patni, Iain Patton, Charlotte Petri-Gornitzka, Malcolm Preston, Caroline
Rees, Mark Richardson-Griffiths, Erik Ringborg, Anna Ryott, Maeva Sabot-Sadiq,
Neslihan Sadıkoğlu, Mita Samani, Richard Samans, Guido Schmidt-Traub, Jeff
Seabright, Cheryl Seeto, Nick Sens, Rasha Shaath, Vian Sharif, Frederic Sicre,
Lorraine Smith, Beck Smith, Sriram Srikumar, Andrew Steer, Liesbet Steer, Leni
Stenseth, Christopher Stewart, Elizabeth Stuart, Natalya Sverjensky, Gemma Swart,
Frederick TEO LW, Fraser Thompson, Elaine Tsai I-Ling, Keith Tuffley, Mike
Tuffrey, Katherine Tweedie, Kitty van der Heijden, Filippo Veglio, Miguel VeigaPestana, Daniel Vennard, Katie Waring, Kevin Watkins, Dominic Waughray, Steve
Waygood, Elaine Weidman, Andrew Wilson, Andrew Winston, Alexander
Woollcombe, Lawrence Yanovitch, Daniel Yeo, Franziska Zimmermann

118

Business and Sustainable Development Commission

121