EU-Commissions View on SDGs

Posted on 07/01/2016 Updated on 05/02/2016

Mariusz Tamborski[i] catalyzed the mutual interest in the perspective of the EU focusing on a “stronger role of the private sector in achieving inclusive and sustainable growth” [ii] in developing countries in his presentation at the corporAID[iii] Conference “Reinventing Cooperation”, Vienna, 29. September 2015. The post-2015 framework directs the subjects away from the Millennium Development Goals (MDGs) to the Sustainable Development Goals (SDGs). The MDGs has been a success nevertheless biased on Chinese Success Story. The SDGs add two new dimensions to the social dimension[iv]: the environmental- and economic dimension and that the SDGs shall be applied universally not only for undeveloped countries. The transformation of MDGs to SDGs includes monitoring, ownership, and accountability.  The 2030 Agenda implementation will go beyond the official development policy. The political context had been discussed at three conferences in 2015:  July in Addis Ababa about Financing; September in New York about SDG’s; and November/December in Paris about climate change.  Caused by the recent economic and financial crisis, the situation is more complicated than before: budget restrictions in developed countries and fewer trade opportunities for developing countries.  Although the emerging BRICS (Brazil, Russia, India, and China) encounter economic crunches, they increase their role in the cooperation South-South.  The conflicts in the Middle East and Libya, the refugee and migration crisis, and the political instability in many developing countries increased the complexity. Politics and experts in advanced countries realize that there is an urgent need to increase the support in war zones, hot spots, and refugee routes and so on.The EU initiated Trust funds for the regions Sahel, Lake Chad, North Africa, Horn of Africa. Initially, it had been assumed that the financial support for the public sector is sufficient, but now in the Post 2015 agenda, the public sector[v] will play a crucial role to achieve sustainable and inclusive growth. A better understanding of the urgency of partnerships, impact financing, social entrepreneurs, social bonds is needed and should not more considered as “Philanthropic.” The funding of USD 135 billion (2014) provided by the Official Development Assistance (ODA) is not sufficient: additional private capital flow is crucial. In the economic context for sustainable economic growth more global opportunities must be offered to increase the employment[vi]. In many developing countries the public sector provides 90% of the jobs, which doesn’t contribute to economic growth and productivity. The private sector is required as an investor: Sustainable energy, infrastructure, mobility, green economies and ICT. Innovative applications should improve the efficiency of agriculture and agribusiness to feed 9 billion people by 2050. In the African continent, eight countries record an economic growth of 7%, nine countries a growth rate of 6% and ten countries of 5%. However, there are many challenges in African countries: governance issues, rules of law, regulatory frameworks, infrastructure gap, access to finance for SME, skills (labor management quality) gap, information gap (digital change). Many countries lack on risks-, and crisis-management and in the application of risk-mitigating instruments. The new perspective on POST-2015 is in the implementation of the Agenda 2015 requiring adaptable changes and ownership of the domestic and global private sector, engagement of national authorities and institutions like NGOs. The dialogue between the public sector the private sectors (SME, multinational corporations, and NGOs) must be encouraged. The most significant challenge is the advancement of the collaboration of Government with the Private Sector to achieve shared visions of sustainable growth. The Government must create a business environment conducive to private sector initiatives, a predictable legal framework, step up the support not only to micro enterprises, but to Small- and Medium-sized Enterprises (SME), and to promote the transformation from informal to the formal economy. The Government must support sustainable labeling and sustainable reporting (like CSR Reports); eco-entrepreneurship; empower women as entrepreneurs and workers and deepen financial institutions. The Government is asked to support the economic transformation through diversification, technology, innovation and production and consumer patterns, and modernization of infrastructure. It has to introduce policies aiming to increase the productivity and competitiveness, sustainable industrialization and enhance value addition. The Government must provide financial and regulatory incentives for responsible business practices and promote and scale up market-based solutions for sustainable development. The Government must encourage the private sector to develop innovative sustainable business models that integrate the poor into local and global markets as consumers as well as producers. It must continue with initiatives that improve the working conditions and opportunities (both goals of CSR) in the green economy. The Government must encourage innovative practices blending public development financing with private development investment to leverage the resources to meet the sustainable development objectives and to reinforce the development of the local private sector. The Government has to engage in structured dialogue with the local and global private sector. The Private Sector must adopt sustainable, socially responsible and innovative business models and improve the sustainability and performance of products and services. That support must focus on areas with strong multiplier effects: agriculture, energy, digital technologies, infrastructure and green technology (green industry). It should be part of core business strategies[vii]. The Private Sector must implement corporate policies to improve the transparency, fight corruption and prevent bribery and tax evasion. It has to develop systems (including risk- and crisis management) to assess risks and mitigate potential adverse impacts when operating or investing in emerging or developing countries. The Private Sector must address human rights by improving labor conditions, health and safety at work, access to social protection, voice, gender equality and empower all women and girls (SDG 5). The Private Sector must engage more in emission trading schemes and provide adequate financing to adapt climate change and biodiversity conservation. The Private Sector must promote Corporate Social Responsibility (CSR) and the Government the motivating framework. The Companies and Institution shall report comprehensively, besides their financial situation, about their social and environmental performance and work condition. Through international business networks, the best practices in CSR and Sustainability shall be published and shared. The Private Sector must develop further reliable and comparable sustainability standards, instructions, schemes, information and labels on products and services. The private financial sector must apply innovative methods to extend financial inclusion: micro-, small and medium-sized enterprises. The objective of the new EU Private Sector Policy (endorsed by EU Members in 2014) is to make the private sector to a real partner in sustainable development. The EU policy contains principles and criteria guiding EU’s engagement of collaboration with the private sector in developing countries. Its intention is to promote the dialogue and joint action with business and civil society. It focuses on sectors such as energy, agriculture, and infrastructure. In summary, the EU Private Sector Policy focuses on private sector development in developing countries and such sectors such as energy, agriculture, and infrastructure.

Roland Leithenmayr VfV

Additional remarks from the Author:

The Agenda 2013 is the political decision of 192 States, 17 sustainable development goals (SDGs), – which consists of 169 sub-objectives -, to implement in the next 15 years. This transformation agenda came into force on January 1, 2016. The global goals (SDGs) are universal for all countries regardless of whether developed, undeveloped or in between: all states have their homework to do to improve their sustainability. Now the non-binding resolutions of NYC have to be implemented nationally in binding political objectives, government plans, and strategies; therefore, it requires a political mandate as well as apparent authority and responsibilities. However, still lacking on details of the methods of indicators and mandatory reports, some politician, and civil servants are delaying the development of government plans and strategies. In contrast to the MDGs, the SDGs want a stronger involvement of businesses in achieving the objectives. These needs an enhanced dialogue between government, business, enterprises and NGOs to share visions, missions and strategies inclusive the use of resources efficiently. That is the opportunity for each State to offer innovations in cooperation with its entrepreneurs to solve economic, environmental and social problems (TBL, PPP: Private, Planet, Profit). The author proposes stronger collaborations between politicians, civil servants and experts like CSR-, and Sustainability-, and Environmental-Consultants and NGOs to prepare complete plans and strategies for the Agenda 2030.

[i] Mariusz Tamborski, Private Sector development, trade and regional integration unit, Directorate General for Development and Cooperation EUROPAID – European Commission.

[ii] http://www.eudevdays.eu/topics/strengthening-role-private-sector-achieving-inclusive-and-sustainable-growth

[iii] corporAID the platform is an initiative by ICEP: http://www.icep.at/

[iv] The Triple Bottom Line Approach (TBL) considers three dimensions equally: economic, environment and society or PPP (People, Planet, Profit)

[v] One of the principal findings is that the private sector played a larger than expected role contributing to the MDGs (Business Impact Report 2010).