Daily Management Review

Davos Study says Following Key Development Goals can Help Business to Unlock $12 Trillion


Davos Study says Following Key Development Goals can Help Business to Unlock $12 Trillion
According to a study by a group including global business and finance leaders, by implementing a few key development goals, companies could unlock at least $12 trillion in market opportunities by 2030 and create up to 380 million jobs.
Pressure on business to become a "responsible social actor" was likely to grow, said the report, released on Monday by the Business and Sustainable Development Commission.
To take the lead in poverty reduction and sustainable development, the group was launched at the Davos 2016 World Economic Forum to encourage businesses.
Alongside academics, environmentalists, trade union leaders and philanthropists, members include the chief executives of multinational firms such as Edelman, Pearson, Investec, Merck, Safaricom, Abraaj, Alibaba and Aviva.
To achieve the United Nations' Sustainable Development Goals (SDG) to end poverty and protect the planet, a key role has to be played by business, the study said.
"Achieving the global goals opens up an economic prize of at least $12 trillion by 2030 for the private sector and potentially 2-3 times more," the study said. By action in just four areas - energy, cities, agriculture and health, this could be achieved, the report added.
The study said that while 90 percent of the new jobs would be in the developing world, the $12 trillion - made up of business savings and revenue gains - would be equal to a tenth of forecast global economic output.
Even though U.S. President-elect Donald Trump has sometimes dismissed man-made climate change as a hoax, Mark Malloch-Brown, chair of the Commission, said the opportunities included measures to cut greenhouse gas emissions.
"In many cases the horse has already left the stable," he said while talking about a shift to a greener economy under way in many parts of the world. According to him the driver of this trend is the concern over rising temperatures and by falling prices for renewable energies.
Preferring instead to sit on cash or return it to shareholders via buybacks and dividends, businesses are still balking at longer-term investments, the study said noting however that the progress has been slow.
Targets on such issues as climate, clean water, gender equality and economic inequality are included in the 17 SDGs, adopted in September 2015.
As anger has grown over stagnant wages, migration, high CEO salaries and corporate tax evasion, bringing to prominence populist and nationalist politicians, especially in the West, the last of these has grabbed attention in recent years.
"We anticipate much greater pressure on business to prove itself a responsible social actor, creating good, properly paid jobs in its supply chains as well as in its factories and offices," the report said, adding that key to rebuilding social contract was paying taxes transparently.
Reducing food waste, a step that by itself could be worth up to $405 billion and pricing pollution via carbon trading are among the other steps it urged.
To raise the amount required "innovative financing" from public and private sector sources was recommended by the group. "The global finance system needs to become much better at deploying the trillions of dollars of savings into the sustainable investments that ... the world needs," the group added.

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