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We cannot charity our way to meeting the SDGs: business for good

Written for and crossposted from the International Civil Society Centre’s Disrupt and Innovate Blog Series

One of the most famous quotes of business in the 20th century comes from Nobel Prize Winning Economist, Milton Friedman, “The business of business is business.” As a leading conservative economist, Friedman believed corporations should largely be left to pursuing profit, which would lead to a social good, as then they would hire more people, pay more taxes, and invest/save their profit.

This approach to business has led to somepexels-photo-large of the highest inequality since the great depression, with the top 1% controlling more than 50% of global wealth, many environmental challenges, and an increasingly disenfranchised workforce. Despite these enormous disruptions, there is an increasing push by key leaders in the business community, government, and nonprofit sectors to increase the role and positive impact of business. Business leaders are increasingly talking about the triple bottom line that business needs to pursue: profit, planet and people. That is a business needs to make money to survive, but that at the same time can have positive impact on the planet and diverse stakeholders.

Business leaders, from Richard Branson of the Virgin Group, to Paul Polman, CEO of Unilever, to Arianna Huffington ­– all members of an amazing group, the BTEAM – are uniting to push for “a better way of doing business, for the wellbeing of the people and planet.” A global movement of over 1,800 Bcorporations in nearly 50 countries has emerged, creating a standard for a “new type of company that use the power of business to solve social and environmental problems.”

Is business for good a sound development practice or another PR gimmick?

What role can technology play in business for good?What does this all mean for the international development and social change community?  There are four key lessons I would like to highlight below.

1) We cannot charity our way to meeting the Sustainable Development Goals – The total cost of achieving all the SDGs is estimated to be greater than USD 30 trillion. Over the past few years, Official Development Assistance has been around USD 130 billion according to the OECD, while foreign direct investment in developing countries is over USD 600 billion per year. Thus, the world needs to look at business as a key way of making significant progress on the SDGs.

2) There is a push for capital for good – While many are still pursuing the highest return on capital without regards for the negative social or planetary impact, there is an increasing push of using $ for social good. The range of vehicles is ever growing, and include socially responsible investing, impact investing, and social impact bonds.

Some of the world’s leading financial institutions are moving into this area – including JP Morgan – as a way to combine profit and mission. In addition, many leading development organisations are setting up their own incubators, social investment funds to explore innovative ways of financing or growing capital for their work.

3) People need jobs – According to the World Bank, over the next decade, the world will need to produce 600 million new jobs to keep pace with the entering global youth workforce.  While development actors and governments have a key role to create an enabling environment, it is largely the private sector that will need to take the lead.

4) The Era of Innovation and Disruption is here. Adopting a more market-based approach (in the right conditions) can help generate long-term funding and impact.

It is clear that there is a great era of change and disruption coming in development such as direct cash transfers, new financing tools and mobile access for real time communication with beneficiaries.

In short, business has tremendous potential to have a positive impact on the world. This is not meant to ignore its negative impact as we will always need civil society organisations (CSOs) to hold businesses accountable, as a watchdog, and to seek to prevent harm. But business as a force for good is growing. CSOs need to be part of this process, to explore how to develop new forms of revenue, business operations, partnership and innovation as a way to scale and sustain our impact.

PCDN is a social enterprise connecting the global social change community. It has over 36,000 members in over 180 countries. PCDN is based at leading business incubator 1776 in Washington, DC.




Craig, I think using business for good makes a lot of sense; of the actors in the development triad (State, market and civil society) the only actor that consistently gets people’s input is the market (as consumers vote with their dollars each time they buy something). While there is a huge variety of social enterprise, business, impact funds, bonds etc., it is definitely a valuable resource that can help us all in our social change and development goals. A major drawback with the “business” avenue is the easy pursuit of profit, diregarding social and environmental concerns, but this needs to be discussed and addressed by social change makers like us..

Profile Photo by Craig Zelizer

Thanks for the feedback. There is no magic solution or bullet for how to achieve the SDGs, but it is clear engaging the business community (at all levels) as is already happpening will be key. Of course there is the question of what kind of business, with what ethical practice? Should all businesses be engaged and if so how? Or should there be voluntary criteira for standards that businesses seeking to engage in poverty reduction should follow?

Profile Photo by Luc Lapointe

Always interesting to read about business engagement in development as they are now the new darlings for the Global Goals. There is no doubt that they can do a lot but ….I would like to propose that maybe businesses should stick to three major principles 1) Reduce/Eliminate damage to the environment, 2) pay their employees a good fair (living wages), and 3) Respect Human Rights – if corporations could simply be transparent about this information and if it’s public on their website …this would be a good start.

The rest ….well I am a little perplexed about their social contribution (CSR or Philanthropy). Businesses, technically, don’t pay taxes …they start paying taxes on the first good or service sold. The scale changes based on their operating cost (minus) what they contribute to social causes via what consumers spend. What if company do nothing more than what I suggested …and then at the Point of Sale(POS) …they would engage consumers to give whatever they want to whatever cause they like. It would be easy to measure what corporation give and the fraction it represents on each services or good sold. Would consumers give more?

    Profile Photo by Craig Zelizer

    Thanks for the great comments. There is the fundamental challenge as many businesses claim to do good or sponsor some corporate Csr or philanthropy. But if the underlying business practices include not paying a fair share of taxes, hurting workers or the environment than such efforts  armore for a show.

    In terms of true corporate ethics and impact a lot has to do if efforts at Csr are based in a communications/pr office or fully integrated into all aspects of the company.

    Then there is the larger question of taxes and the public good. What happens when corporations (there are many) are using creative means (often legal) to avoid paying higher or taxes.

    This is becomes more challenging in the age of quick flight of capital and jobs in certain industries in the age of globalization.

    One interesting question I wonder if any major corporations have said we need to pay more in taxes to support public goods?

    given the increasing inequality in the world we do need a lot more change. But this need for change isn’t only in the corporate sector, we need to adopt a people first approach and make investing in communities, education and health as key global priorities.

Profile Photo by Sapele Center For Development

It does make a debate to argue if businesses are doing enough? Since businesses are privately owned and set up to make profit, albeit ethically, it becomes a debate if CSR should be  instituted by law… I think like the idea of People first approach and investing in their communities, education and health as key priorities..Then, we should also look at the capacity of the local leaders to comprehend the need to drive this CSR.. Most times, they dont understand it and for pecuniary gains, compromises the process at the disadvantage of their communities…

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