Investing in development is everyone’s business
How do we bring the private and public actors together to cooperate meaningfully? How to ensure that private sector involvement goes beyond grants and corporate social responsibility?
These questions were discussed at the panel organized by Habitat for Humanity Europe, Middle East and Africa during the European Development Days 2017 in Brussels.
Key points from the discussion:
- Putting people and the planet before profit should be the new norm for the private sector if development aims are to be achieved.
- The era of the public sector versus the private sector is becoming a thing of the past. They no longer have to view each other with suspicion but should collaborate.
- Young people are passionate about socially responsible businesses that connect them as the ultimate consumer with primary producers.
The role of the private sector in driving the agenda for change is a reflection of the times. As the development community looks to the future, corporate responsibility is emerging as a new force in social investment. Such participation would not have seemed possible in the recent past, but it is now seen as the way forward for sustainable development.
“We have a moral obligation to see to it that words become actions. That sounds heavy, but it is important to spell that out. It is a moral obligation to the coming generations.”
—Ulrika Modéer, State Secretary for International Development, Government of Sweden
The desire for the private sector to take action is strongest in such areas as climate change and poverty alleviation. For example, the IKEA Foundation started by looking at the position of children and how to help them out of poverty. In doing it, they realized there was a knock-on effect in tackling climate change.
A clean cooking initiative was developed to improve the health of women and children who suffered from meals prepared in smoky environments. Households spend up to 15 % of their limited income on kerosene and other fuels that give off fumes responsible for more deaths a year than malaria, tuberculosis and HIV/AIDS combined. By investing in clean cooking stoves and solar energy, the IKEA Foundation’s program has made a contribution to combatting climate change.
The Nepal Tea company started by encouraging local farmers to pool their land for a tea plantation and now employs more than 600 farmers. The full-time farmers are given free housing and subsidized necessities, and the company has now invested in a cow bank. The project started by providing 34 cows to community farmers. This provided an extra source of income, enabling the farmers to sell the diary produce to local markets and the manure to the Tea Company. The only condition is that farmers were asked to donate the first-born calf to the bank. As a result, the bank has been able to provide cows to 176 farmers.
To create such opportunities requires removing unwarranted middlemen from the business chain and connecting the primary producers to the final consumers. The profits generated saved can then be used for social investment in the farmers themselves. These are the values that young people, the millennials, are passionate about.
The success of encouraging companies to build sustainable development into their business model does not absolve public authorities of their legislative or regulatory responsibilities; they are still required to set the framework within which responsible businesses operate.
However, it does require the public sector to take risks. Elected representatives have to be brave enough to not go with the flow and sometimes allow criticism if they are to convince the public to accept the long-term benefits of what might seem to be unpopular programs.