Companies should adapt their business models to be at the service of the UN’s sustainable development goals (UN SDGs) according to Paul Polman, chief executive of Unilever speaking at the annual meeting of the World Economic Forum in Davos last week.
In a special session focusing on the SDGs, Polman said that they presented an opportunity for business. He indicated that if 800 million people are going hungry they needed to be fed; if 1.8 million children below the age of 5 are dying from an infectious disease they needed to be taken care of and if millions are excluded from education this needed to be changed and all of these issues offered business with an opportunity.
“If you can make the value chain work you can deal with poverty and the economic issue of climate change,” Polman said.
[amazon_link asins=’1138695084′ template=’ProductAd’ store=’manifest-21′ marketplace=’UK’ link_id=’e4c1c9fb-e0b0-11e6-ae1a-d91e21d5bfb6′]Polman said that shareholders can not be the reason for running a business. However, he suggested that those companies that were understanding these issues and integrating them into their business strategies were producing higher rates of return. By addressing poverty and climate change-related issues companies were removing risk issues and improving their reputation he said. Sustainable businesses he concluded would mean to a sustainable world.
Mark Cutifani, chief executive of mining giant Anglo American, admitted that while his industry provided the materials for goods that people needed the way that people go about doing their business is unsustainable. The SDGs, therefore, provided a framework to have conversations within the company’s businesses and to help the company understand that its true role is to service society.
This meant a new way of doing business in his sector so that they worked in partnership with communities and with stakeholders and governments. Cutifani said that one of the key things that business had to do better than in the past was to listen to communities where it operates. Previously they would just tell communities what they needed. Now Cutifani said the company takes a step back and asks people in communities what is important in their lives and what role can they play in that.
Cutifani said: “That is the new approach we’re introducing in our industry.”
This approach extended to innovation and developing technology he explained. If Anglo American engaged with communities and establish relationships with them then it could ensure its innovations actually helped them – this could relate to water use, energy and transportation Cutifani said.
This discussion followed the publication of a report by Oxfam which in its call for more equality in the global economy argued for government action to encourage companies to act for the benefit of their workforces and wider society as well as their executives and shareholders.
The charity suggests that the concentration of global wealth in the hands of a few – it calculates that in 2015 eight billionaires owned the same wealth as the 3.6 billion people who form the poorest half of the world’s population – is thwarting the fight against poverty.
Oxfam suggested that presently many companies have business models that are increasingly focused on delivering ever-higher returns to wealthy owners and top executives and are structured to dodge taxes, drive down workers’ wages and squeeze producers instead of fairly contributing to an economy that benefits everyone.
The report called for what it described as a more human economy where markets are better managed in order to ensure no one is left out or denied basic rights such as decent work, healthcare and education. Key features of this economy would include improved cooperation between governments to ensure corporate taxes are paid to benefit poor countries and taxes wealth to generate funds for healthcare, education and job creation as well as action to tackle the barriers that hold back women including lack of education opportunities and the burden of unpaid care work.
Last Updated: 22 January 2017