Are the SDGs the North Star for Corporations?

Each September, delegations of public and private sector representatives from almost every country meet at the UN General Assembly (UNGA) to discuss how best to work together to solve the world’s most endemic political, economic and security challenges. On the development front, a framework called the Sustainable Development Goals (SDGs) serves as a collective action agenda, with progress measured against 17 primary goals and 169 targets covering a broad range of issues inclusive of poverty, health, education, hunger, women and girls, city sustainability, climate change and others. Experts estimate that it will take approximately $2 trillion a year—through the expiration date of 2030—to finance the goals. That’s a total need of about $26 trillion. If we can find a way to fund the Goals, we have the potential to end global poverty and hunger, protect the planet from degradation, ensure human beings can enjoy fulfilling lives, and foster peaceful and inclusive societies.

This means we have a lot of work to do. For years, SDG organizers and activists have pushed the private sector to play a more robust role in developing and delivering on the framework. And many corporations have stepped up to the plate in the process, even aligning their own activity with the Goals.

Recent rhetoric around “urgency” and “need” and “responsibility” on the part of private actors has been deafening. For many of these organizations, focusing on the Goals is synonymous with understanding what their company’s future might look like. In a world of increasingly scarce resources, rapid automation, global climate shifts and growing power of a socially conscious customer-base, sitting on the sidelines may mean getting left behind. The imperative to pursue these global mandates can either be to mitigate risk or to truly appreciate the value of profit and purpose. Regardless, the zeal with which corporate leaders and institutions are reaching for the baton feels unprecedented.

Conversations during UNGA week were abuzz with one key question—how can the private sector approach the SDGs in a way that actually achieves our shared global objectives? In response to this, the Global Impact Investing Network, in partnership with The Abraaj Group and Bank of America Merrill Lynch, convened business leaders to discuss what they’ve been doing to meet this goal and what more will be needed.

Inspired by the enthusiasm of the participants—and the ambitious thinking of changemakers in the room, here were some things we heard:

First, we have to start talking about the SDGs as a framework, not a silver bullet.

It was inspiring to hear representatives from Safaricom, Royal Phillips, and LADOL broadly agree that the SDGs create a construct for real conversation. Specifically, the Goals offer an organized way of aligning business activities with delivering impact. The segmentation of goals—and even more importantly, their targets—help businesses understand which of their peers are tackling the same problems and encourage collaboration towards these ends. In our own Impact Investing work, specifically through the Impact Investing Network Map, we’ve seen firsthand that there’s real value in understanding who’s playing in your space. By identifying likely allies, organizations are motivated to work together to achieve better results.

Second, the private sector must be the nexus for change, not an afterthought.

Capital and investment have often powered the wheel of innovation, for better or worse. As our panelists pointed out, businesses are not just a key stakeholder in systems-wide change, but a key organizer. Particularly in emerging markets, they are required to work with local communities, align different sources of capital, and inspire local government to serve the immediate needs of their own supply chain. That’s a unique position to be in. Take healthcare, for example. To revolutionize the healthcare system in emerging markets, as was explained from the mainstage, the solution is not as simple as building one hospital. Businesses need to create relationships with pharmaceutical companies, train doctors and nurses and even improve local transport and infrastructure to facilitate effective treatment. As representatives of Abraaj’s Growth Markets Health Fund, Royal Phillips, PBUCC and the IFC made clear (through their partnership in the Growth Markets Health Fund), even the most catalytic investments or innovative solutions need everyone around the table.

Third, without refreshed norms on how the private sector operates, progress will be stunted.

Even with the best collaboration and innovation, how we measure success needs an update if the goal is to maximize impact alongside profit. And that requires a move from short term wins to long term sustainability. As Amy Jadesimi pointed out from the stage, we’ve allowed the industry to drift dangerously away from what “long term” used to mean in the 70s and 80s. Corporate trailblazers—like Paul Polman of Unilever—continue to urge businesses to rethink how they measure success and with what frequency. But many agree that to do this, we need to first educate those calling the shots, and that extends beyond the C-Suite. Shareholders need to be informed of the value of sustainable thinking and long-term planning. They need to be encouraged to use their voice and to exercise their votes in alignment with what they believe to be fundamental to the success of a company long-term. Financial managers need to be at the helm of product innovation, exploring new mechanisms that leverage both social and financial returns. Stakeholders—every entity or individual affected by a businesses’ core activity—must be engaged holistically. Even across private assets, there’s a role for Limited Partners to play with General Partners and fund managers to actively demand that they work with their portfolio companies to think beyond just the bottom line—for financial and social benefits.

Achieving the SDGs are more of a reality today than ever before. They are integral to the well-being of hundreds of millions of people around the world. Some corporations are ready to move to fulfill this mandate, while others are waiting to be inspired. If we can use the framework of the SDGs to usher in this new way of thinking, acting and partnering—with the private sector as an integral and active participant—we may truly have an opportunity to massively reduce global poverty.

The painful acknowledgment of coming up short

“So, what do we do next?” According to reports, that is the response Bill Gates offered upon learning that the Gates Foundation‘s $700 million polio effort had fallen short of stopping the disease from spreading throughout Africa. Indeed, instead of putting a once-and-for-all stop to the disease, an outbreak had struck and was spreading through some of the very countries targeted for eradication. At the moment I read his response, I felt his pain. Imagine putting up such a significant sum from the goodness of your heart, committing your time, the talent of people you admire and respect and putting yourself out there in a really big way to meet a really big challenge and then … learning it didn’t exactly work the way you’d planned for and the way you passionately hoped it would.

When I say I get this, I really get this. On a dramatically smaller scale, at the Case Foundation we’ve had to face our own hard moments when reality has set in and you realize that the big opportunity you were chasing is looking more like a really big challenge that is hard to overcome. Things don’t materialize as envisioned, and you fall short of your mark. It’s easy to feel discouraged or even embarrassed. You can’t help but worry about what people will think, or the price you might pay in the court of public opinion.

We experienced this recently, as we had to re-think our involvement in the PlayPumps initiative, which brings clean drinking water to rural African villages. When we were first introduced to the technology, we believed both the technology and the business model for its deployment had enormous potential and jumped in with both feet to help create PlayPumps International-U.S. as a US-based fundraising and marketing organization to support the initiative. As we’ve noted in the past, we’re proud of the successes the initiative has had – PlayPumps are now bringing play opportunities and improved access to safe water in hundreds of communities and schools in Africa. In addition, these efforts have helped spark a number of new play-related technologies now being offered by various organizations and the initiative has highlighted the important role that social entrepreneurship can play in global development. However, we also acknowledge that the organization has fallen short of the aggressive goals that were developed at the outset, and all involved have learned many lessons.

As I noted last fall, we learned that doing work on the ground in Africa is hard and humbling work, even more so than anticipated. We learned that PlayPumps perform best in certain community settings, such as at large primary schools, but they are not necessarily the right solution for other communities. And more broadly, we learned that however creative PlayPumps might be, they really are just one element in a larger portfolio of possible solutions that can be tailored to meet the safe water needs of specific rural communities. In addition, while there have been successes in implementing the PlayPumps technology, and we believe in the entrepreneurial approach of the PlayPumps model, a combination of factors made execution of the original model we envisioned when creating PlayPumps International-U.S. a significant challenge.

Of course, there really is only one appropriate response when things aren’t humming along as planned, and it is the same response Bill Gates offered, “So, what do we do next?” Because just like in business ventures, personal undertakings and public sector initiatives, things often go wrong. The unexpected happens. Reality doesn’t always play out like the business plan calls for. Look at any great business today and chances are their road to success was fraught with potholes – low moments that required fresh, new thinking and important course corrections. As a nation, I think we’ve learned that progress comes through trial and error, and much of what we enjoy today is because somebody somewhere was willing to blaze new ground.

In the case of PlayPumps, there were essentially three options. One was to stay the course, ignore the emerging realities, and stubbornly continue on a path that the growing evidence was suggesting was unwise. A second would be to pull the plug on the effort, and conclude that the time and capital was better invested elsewhere. And the third was to take a step back and regroup, and undertake efforts to go forward in a new and more effective way. For PlayPumps International-U.S., the third path was the right one. The belief that clean water was one of the great issues of our time hadn’t changed – but there were likely better ways to advance the initiative. In May 2009, the board of PlayPumps International-U.S. brought in a new CEO to identify a new path forward. Under his leadership, in October of last year, the organization announced a grant of funds and technology to Water For People, which now offers PlayPumps as part of a larger portfolio of solutions from which rural African communities can choose. At the same time, we announced an investment by the Case Foundation in Water For People to help the organization accelerate and expand its efforts in Africa. For nearly 20 years, Water For People has pioneered innovative approaches to safe water supply, empowering communities and utilizing local entrepreneurs for sustainable operations and maintenance, and we truly believe that their approach represents a step forward for the PlayPumps technology.

It sometimes feels like philanthropic efforts are held to a different standard than in the private or public sectors. All too often there is less tolerance for mistakes, which leads many organizations to become risk-adverse. And when mistakes are made, the tendency is to sweep them under the carpet – thus depriving the sector of important lessons learned. But in reality, the very nature of innovation requires that we try new things and take risks. Sometimes they will work, other times they won’t – but in all cases, we should learn from our experiences and strive to do even better in the future. Of course we would have liked PlayPumps to have achieved the reach and impact to date that we originally envisioned – it’s much more fun to talk about successes than disappointments. The bottom line is that hundreds of African communities now have greater access to clean water and the revised efforts working with Water for People will further improve its availability. Together with other sector efforts and replication of the concept, we do believe African communities will be better served and the interventions more sustainable because of the important course corrections we’ve put in place. Might we have to revisit the strategy again and adapt along the way? Maybe. Turns out innovating is hard work anywhere and anytime. In the developing world even more so. But if the philanthropic sector is transparent about mistakes and lessons along the way, and adapts as the situation calls for, hopefully we’ll all end up a little wiser and a little closer to solutions that can more effectively address the daunting challenges of our day.