The challenge: can smart investment make sustainable development a reality?

Share this page

Since the Rio Earth Summit in 1992, the international community has worked toward a shared vision of sustainable development. Now, with the Sustainable Development Goals (SDGs), the United Nations (UN) member states have committed their highest level of political will to ensuring that human well-being is advanced within the planet’s ecological boundaries.

Irrigation equipment pumps water over a corn field. © / WWF-CanadaIrrigation equipment pumps water over a corn field. © / WWF-Canada

Yet if the SDGs are going to be more than aspirational words on paper, we must secure the positive participation of business and industry at the global, regional and national levels. In developing countries, private investment already makes up 60% of external financial inflows, contrasted with flows from public sources – such as official development assistance – which in Africa, for example, amount to a mere 1% of capital inflows (World Bank, 2013).

At the same time, funding alone is not enough to bring about lasting change. Alongside the significant increases in investment that are required to achieve the SDGs, substantial policy reform will be needed, as success will depend on the behaviour and practices of those directing the financial flows. Unless multinational enterprises are brought into alignment with the sustainable development agenda, irresponsible actors will hold the power to undermine the potential of the SDGs. For example, in 2012, community groups and UN experts protested against plans for an open-pit coal mine in Bangladesh that would displace up to 130 000 very poor people and destroy their agricultural land, fisheries and freshwater sources (UN, 2012). Yet despite these severe human rights, environmental and food security concerns, the company behind the project, Global Coal Management Plc, did not abandon it.

A sustainable future for our world hinges on responsible business conduct. Multinational enterprises have a large influence in many countries that rely on foreign financing for their development. Yet responsible businesses that seek to comply fully with national and international laws and standards when endeavouring to operate abroad can often be at a disadvantage compared to actors who may act less responsibly. Despite this, some companies are already realising their potential to play a positive role. As just one example, WWF is working with the global fashion firm H&M to minimise the company’s negative impact on the water supply in high-risk river basins in the People’s Republic of China and Bangladesh. As textile production can be water intensive, H&M is increasing the efficiency and cleanliness of its operations, as well as collaborating with local stakeholders on sustainable management of shared freshwater resources.

Harvesting oil palm, Sumatra, Indonesia. © James Morgan / WWFHarvesting oil palm, Sumatra, Indonesia. © James Morgan / WWF

The OECD and its member countries can play a unique and critical role in supporting the global proliferation of good business practice. The OECD Guidelines for Multinational Enterprises (OECD, 2011) are the most respected standards for corporate behaviour worldwide. By strengthening the implementation of these guidelines, the OECD can promote reform and improve the enabling environment for responsible investment. This, in turn, will encourage sustainable development by giving responsible businesses an advantage that benefits their bottom lines, while at the same time advancing development targets. This shift will not happen on its own, however; like-mindedgovernments, companies, investors, civil society groups and consumers must work in concert to facilitate change for the better.

One of the OECD’s potentially strongest tools for advancing responsible business conduct at home and abroad – the Natio nal Contact Point system of the OECD Guidelines for Multinational Enterprises – needs tobe significantly improved. This innovative grievance mechanism is intended to provide remedy for corporate wrongdoing. However, an analysis conducted by the OECD Watch network (Box 6.4), of which WWF is a member, found that of the 250 complaints filed with the National Contact Points network since 2000, only 3 have led to an actual improvement in the conditions of the victims of corporate abuse. Only a further 12% of claims recorded beneficial results of any sort, such as improved company policies. OECD Watch is asking for a revision of the procedural guidance governing National Contact Points in order to ensure that the network is

strengthened. This one reform may seem small when looking at the enormous ambitions of the 2030 Agenda for Sustainable Development. It may not seem as glamorous as the Pope’s climate encyclical or the G8’s recognition that we are in the last fossil fuel-based century, but it could have enormous and far-reaching impact.

The fact is that each and every decision we make related to responsible business conduct and private investment will have historic implications in determining whether 2015 will be remembered as a turning point in the course of human history.

Portrait, Marco Lambertini

Marco Lambertini, Director General

WWF International

Related posts