When world leaders meet at the United Nations in September to assess progress on the Millennium Development Goals (MDGs), they will face a sobering picture. While some regions are showing progress on some Goals, progress generally is too slow to meet the 2015 deadline and some countries are losing ground.
The World Economic Forum’s Global Governance Initiative estimated that in 2004, the world as a whole put forth only a fraction of the effort needed to be on track towards the Goals. One approach that holds significant untapped potential for accelerating progress is that of business partnerships.
While business has traditionally been viewed with distrust by many other stakeholders – often due to poor performance on labour, environmental and other standards – a new dynamic is emerging that emphasizes the positive contributions that the private sector can make to development efforts. The private sector can help develop new technologies, provide essential goods and services, and manage large-scale operations efficiently. Applied in partnership with governments, NGOs and communities, these competencies can help improve the effectiveness of development programmes, and the need for them will only increase given the planned increases in foreign aid to Africa.
How can business engage in the MDGs?
Building on previous work by the International Business Leaders Forum and others, the Global Governance Initiative outlines four major ways that business can help achieve the MDGs.
Through core business activity
First, the private sector can make a significant contribution just by doing business in ways that both avoid harm and contribute to development. The UN Global Compact encourages business to commit to the ten principles it has developed to guide the human rights, labour, environmental and anti-corruption practices of corporations worldwide. Multinationals have a particularly important role to play in upholding and advancing these principles in countries with weak regulatory capacity. Business can also develop innovative ways to serve the poor through ‘bottom of the pyramid’ approaches (developing products and services that are useful and accessible to the poor); using supply chains to buy from small producers; and providing income and training to the poor through employment opportunities. Some multinationals are requiring that voluntary regulatory standards or preferred business practices be implemented throughout their supply chain – an approach that significantly extends the reach of their efforts.
Through public-private partnerships
Second, public-private partnerships (PPPs) between businesses and other stakeholders, such as NGOs or governments, can apply the resources and competencies of business for social gain. Examples include the development and distribution of food products fortified with micronutrients; market price information systems that farmers can access by mobile phone; water services that are built by companies but designed and ultimately managed by the community. A number of new models are emerging in this field which indicate significant potential – for example, ‘co-investment models’ where a corporation and local government jointly set up and run health clinics or water treatment facilities.
But the widespread adoption of PPPs is hampered by financial, institutional and other obstacles. Over the past year the Forum’s Financing for Development Initiative convened a series of discussions among PPP practitioners in the water, health and education sectors to identify promising models, factors responsible for success or likely to lead to failure, and emerging trends in the field. The project results – to be presented at the UN World Summit in September 2005 – show that there are a number of practical strategies for developing, financing and managing PPPs that could make them more effective in addressing development needs, but these will require significant responses from government, finance and development institutions.
A third option for corporate engagement is philanthropy in cash or in kind. Annual corporate grantmaking has already reached several billion and is growing, but currently only a small portion of this is directed towards developing countries. Corporate foundations have an opportunity to target more funds towards MDG-oriented programmes, filling crucial gaps by supporting those that emphasize local capacity-building and address a number of MDGs. They can also help to fill the financing gaps – particularly for start-up and capital costs – that often constrain the scaling up of PPPs. The Forum’s Global Foundation Leaders’ Advisory Group and other philanthropic networks can further discussions and action on this front.
Fourth and last, business has a significant (and largely unexplored) role to play in collaborative efforts to improve governance for the MDGs. For example, improved organization and targeting of business advocacy efforts could help leverage greater public sector action on the MDGs at both global and national levels. Involving business in policy dialogues also enables stakeholders to work together more effectively on implementation efforts. And businesses can also help build public awareness and support for the MDGs, through media outreach and consumer education.
The World Economic Forum is facilitating business efforts to meet the MDGs on all four fronts outlined above. All these initiatives are part of the Forum’s Global Institute for Partnership and Governance, and engage a broad array of stakeholders including the foundation community.
The Global Health Initiative works with over 170 companies and partner organizations to increase business efforts to tackle HIV/AIDS, malaria and tuberculosis. It develops case studies and guidelines for workplace education, prevention and treatment efforts; facilitates partnerships, including the development of business coalitions such as the Indian Business Alliance to Stop TB; and expands advocacy efforts by corporate and health sector leaders.
The Water Initiative disseminates good corporate practice and promotes market-based instruments for water and watershed management. It also serves as a PPP matchmaking platform for projects in Eastern Europe, Africa and Asia. It is helping to launch business alliances on water in African countries such as Mozambique and Uganda, and is assisting with the development of one in India.
The Jordan Education Initiative has brought new curricula, teacher training and information technology into 100 Jordanian schools, ultimately benefiting 50,000 students. Project partners – including 17 corporations and over 25 local government and NGO stakeholders – have raised $25 million to support the project. As a result of its success the project is now expanding to both the Palestinian territories and the Indian state of Rajasthan.
At Davos 2005, a group of Forum member companies formed the Energy Poverty Action Task Force to address the links between poverty and lack of energy services in the developing world. By working together, task force members hope they can develop solutions for energy provision in rural Africa that are sustainable and scalable in community, environmental and financial terms.
The Forum is exploring a new effort to coordinate corporate engagement in increasing agricultural production, improving nutrition, and expanding rural markets to reduce chronic hunger in Africa. Following a first meeting in June 2005, key companies and experts are now examining how these efforts could be coordinated at the regional scale to help meet Goal 1 and catalyse what UN Secretary-General Kofi Annan has called a ‘Uniquely Green Revolution for Africa’, combining environmental sustainability, women’s empowerment and nutrition with increased agricultural production.
Together with UN agencies and government departments dedicated to partnership development, NGOs that act as ‘business-convening organizations’ – such as the World Economic Forum, the World Business Council on Sustainable Development, the International Business Leaders Forum, or Business for Social Responsibility – have an important role to play in advancing business efforts on all of these four fronts. They act as a crucial bridge between the public and private spheres, developing the common ground between two sectors that have traditionally been separated by differing priorities, incentives and cultures.
Lisa Dreier is Associate Director, Policy and Governance, at the World Economic Forum. She can be contacted at email@example.com