The Illustrious Private Sector: Practical Engagement

THE CHANGING LANDSCAPE
By Shawna Walsh, Global Strategy Specialist

 

Despite significant progress made in global development over the last thirty years, there are growing pressures and drivers that make our planet and communities highly vulnerable. Exemplifying the interconnectedness of these drivers, we see the rise of fragility and conflict towards mass displacement, a coinciding rise of disease and epidemics and a resulting lack of access to key services. The effects of climate change are equally increasing the scale of natural disasters, and more focused attention is being made towards adaptation and building resilience across all sectors. These drivers affect us all, and Governments and Multilateral institutions cannot solely be responsible for reversing the effects of climate change nor building a more resilient and inclusive future. The adoption of the Sustainable Development Goals (SDGs), the Paris Climate Agreement and the Addis Agenda on Financing for Development provide us all with a shared framework, and for the first time, recognizes that the private sector plays a critical role in driving the transformative change and scale required to meet this ambition. In the pursuit to realize a more sustainable future, the global development community must work to address these drivers in a manner that recognizes systemic change and where “shared value” can be understood, financed, and acted upon.

“…companies are capitalizing on the business opportunity of
the SDGs while equally becoming fit for the future.”

On the wings of CoP24, I saw significant engagement from innovators, the financial community, technology providers, SMEs, and MNCs that are going well beyond “business as usual” towards fundamentally rethinking their business models in order to support the transition to a low-carbon green economy. We see positive examples from the beer to the pharmaceutical industry, recognizing the increasingly compelling business case the 2030 agenda represents. Increasing their license to operate in new markets, harnessing core business and managing risk, these companies are truly capitalizing on the business opportunity of the SDGs while equally becoming fit for the future. Whether that is building resilience against water stress, increasing access to high quality medicine, promoting a circular economy or transitioning to net zero, these companies are beginning to take community-centred approaches to business and are moving the needle in-country.

From the donor community, USAID just announced its new private sector engagement policy which focuses on shifting away from the old “public and private partnership (PPP)” model towards market-based approaches and co-designing of solutions in the journey towards self-reliance. Our experience with development agencies reflects this shift as well, shaping more practical and actionable multi-stakeholder partnerships, coalitions and strategic alliances to deliver transformative impact at scale. These catalytic partnerships, largely taking a value chain approach, focus on creating the collaboration conditions that make social, environmental and economic impact achievable as well the potential to realize financial returns.

“… the world will face extreme weather, a loss of biodiversity, water
and food scarcity, sea level rise, and overall lower economic growth.”

However, often moving in parallel, you see these initiatives and discussions still operating in silos and  are not nearly operating at a truly global scale. The private sector is increasingly frustrated at the climate language, a lack of a single taxonomy and Governmental stalemates to create the necessary enabling environment to attract investment. From the NGO and civil society space, you sense a resistance towards the systems-worldview, as development finance has notoriously operated in distinct sectors and sub-sectors (e.g. Malaria) and systems approaches often lead to difficulties around attribution. The development community is simultaneously still suspicious of the commercial interests of the private sector, keen to maintain a human-rights based approach to development focused on ending extreme poverty and building socially and economically inclusive societies. This coupled with a view that private sector engagement is only useful from a resource mobilization perspective, demonstrates a clear need for capacity building and a significant culture change across the community.

Despite these barriers, the 2030 agenda and a 1.5° degree world requires more effective multi-stakeholder approaches or the world will face extreme weather, a loss of biodiversity, water and food scarcity, sea level rise, and overall lower economic growth.

As the global development arena is mandated to protect those that are most disadvantaged and vulnerable at the bottom of the pyramid, from our view, it is critical that these “game changing partnerships” do the following:

Working together in WIN-WIN partnerships that deliver impact at scale, maximize income and influence key outcomes is a difficult task and requires knowledge on both the development realities and best practice engagement techniques with the private sector. This means going beyond business as usual from both perspectives, engaging senior leadership within businesses and truly examining entry points that define shared value, and not just from a philanthropic or fundraising opportunity view.

SRI Executive Strategy has had the honour to support organisations in this context, and looks forward to continue to bring disruptive solutions and approaches that enables the development community to be bold, take whole of society approaches, meaningfully engage the private sector and unlock investment for a better and more sustainable world.

 

SRI Executive Strategy has had the honour to support organisations in this context, and looks forward to continuing to bring disruptive solutions and approaches that enables the development
community to be bold, take whole of society approaches, meaningfully engage the private sector and unlock investment for a better and more sustainable world.

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