Charting a Fifteen-Year Strategic Course for Global Business, Finance & Sustainable Development
Key Takeaways from the 2015 Sustainable Development Goals Business Forum
Over the past five years, the global landscape in which business and finance operate has been evolving rapidly. In today’s environment, companies and investors are increasingly compelled to maximize not only financial returns, but overall positive impact.
At the recent 70th anniversary of the United Nations General Assembly (UNGA), delegates representing governments, business and civil society descended on New York City for a week of events celebrating the ratification and adoption of a refreshed global development agenda, also known as the Sustainable Development Goals (SDGs). This agenda, a set of global objectives, will chart the course for many global market trends for the next fifteen years.
As part of the series of events surrounding the UNGA’s adoption of the SDGs, the International Chamber of Commerce, the International Finance Corporation, the United Nations Global Compact and the World Economic Forum convened a group of prominent business leaders, government officials and investors from around the world to conduct an in-depth discussion about the role of business in the global development agenda. Palladium was honored to have been extended an invitation to participate in this day of dialogue, appropriately titled the 2015 SDG Business Forum.
While we can in no way capture the passion, vision and enthusiasm that participants brought to the room, in the hopes of spurring further constructive conversations on these topics of global importance, we would like to pass along a few key takeaways to those not in attendance.
What Should You Know?
The day consisted of a series of panel discussions followed by a lively audience-driven discussion, with conversations spanning a range of topics, including:
- Global-macro – Ways that companies can, and will, contribute to achieving the SDGs through their core business activities;
- Strategic – How businesses can capitalize on this global policy agenda by integrating the SDGs into the fabric of their corporate strategy;
- Tactical – Concrete opportunities for business to invest in technological capabilities and infrastructure in emerging and frontier markets; and
- Leveraged Finance – Identifying opportunities in emerging and frontier markets to leverage private capital for financial and social returns.
Spirits ran high, and the enthusiasm and optimism for the future was palpable.
What Should You Take Away?
Without diving into minutia, several key takeaways around Business Strategy and Finance/Investing, about which there is growing global consensus, emerged during the conversation:
Business leaders around the world increasingly recognize the competitive advantages of incorporating positive impact considerations into their strategies and operations. This shift in strategy is being driven by a pragmatic response to consumer demand, the so-called war for talent, and the growing need to manage risk in emerging and frontier markets.
Corporations must figure out how to marry their go-to-market strategy to the SDGs. In particular, there is tremendous opportunity for corporations to leverage information and communication technology to tap new opportunities in emerging and frontier markets. Corporations should also develop the capabilities to identify and properly manage public-sector partnerships, which will reduce the risk associated with operating in emerging and frontier markets.
However, the practical means of integrating positive impact into one’s corporate strategy and day-to-day operations can be a daunting task for even the most experienced executives.
Five myths about impact investing have permeated mainstream discourse:
Myth 1: Blended finance is just a substitute for official development assistance and will only reduce the aid budget.
Myth 2: Regardless of how we try to blend it, everyone will have competing interests, and it will be difficult to work at the project level.
Myth 3: You must give up returns; you cannot maintain risk-adjusted return and have social impact.
Myth 4: The appearance of blended capital will merely crowd out mainstream finance.
Myth 5: There is no evidence that impact investing is possible.
What do you think?
- Does your company approach sustainability from the vantage point of it being a strategic differentiator and competitive advantage?
- If yes, how does your executive team think about incorporating sustainability into their strategy and operations? What are the biggest challenges that you face in doing so?
- If no, why do you think this opportunity hasn’t been identified yet?
- Do you agree/disagree with the five myths about impact investing? Why or why not in your experience?
- What do you see as the interrelationship between corporate strategy and impact investing? Is your company effectively leveraging its corporate venturing and M&A strategy, along with your philanthropic arm, to provide incremental value through blended capital approaches to financing strategic growth?
We would love to hear from you! Whether you are willing to share your experience with us, want to discuss or refute something that we have written or want to learn more about how to capitalize on this next wave of shifting market fundamentals, please reach out to us and introduce yourself!
- Rob Held, Regional Director, Americas, Strategy Execution Consulting (email@example.com)
- Zack Walmer, Consulting Manager (firstname.lastname@example.org)
- Benjamin Ersing, Associate Consultant (email@example.com)
Disclaimer: These views represent those of the authors of this paper, and have not been endorsed by the forum sponsors or host.