Of course corporate social responsibility is well established and businesses have found ways to make contributions to the greater good and improve their image while, at the same time, increasing profits

When world leaders adopted the Sustainable Development Goals in September 2015, it was clear that they were way broader and much more ambitious than the Millennium Development Goals adopted in 2000. It was also obvious that achieving them would cost a lot more than governments could afford from their own funds or from aid.

One estimate puts the global cost at around $2.5 trillion per year.  Making the SDGs happen therefore needed the private to contribute. But in what ways, and how, and what is it worth to the private sector? So far this has not been spelled out and indeed there is a fear that firms will be asked directly to contribute funds to meeting the SDGs. But this is not the intention and the private sector can contribute to the SDGs as well as boosting profits. Here’s how.

Of course corporate social responsibility is well established and businesses have found ways to make contributions to the greater good and improve their image while, at the same time, increasing profits. But actions need to go beyond this and involve firms doing things they already do in the course of doing business.

By doing them better and behaving responsibly, they can help themselves and help meet the SDGs at the same time. In other words, businesses already contribute directly to SDGs by creating jobs, supporting growth, and staying away from corruption. Corporate growth, higher productivity and increasing productivity through normal business operations are accordingly part of the equation of meeting the SDG targets.

Innovation is also part of the equation, with firms generating new technology which increases profits, while solving long standing problems. This was apparent in the aftermath of the 2015 earthquakes when UNDP and Microsoft worked together to devise smart phone technology to map destroyed houses and monitor removal of debris. This ties up with the target of achieving higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors.

In other words, a growing private sector, profitability and the SDGs are naturally aligned and essential in meeting the high cost of the SDGs. Take energy efficiency, for example, where going green offers a chance to boost corporate profits and also squares nicely with Goal 7 which is to ‘ensure access to affordable, reliable, sustainable and modern energy for all’. It’s also obvious in building the workforce, where respecting labour laws and offering an attractive working environment helps staff retention and works for firm-level growth. This matches up with Goal 8 to ‘promote inclusive and sustainable economic growth, employment and decent work for all.’

This in turn leads naturally to the idea that the need for a growing and vibrant private sector strengthens the signal to governments that creating an environment in which it was easier to do business also provides a way to meet the many SDG targets. Bureaucracy strangles enterprise and it’s easy to show that a better business environment links to growth.

Untangling and simplifying bureaucracy is a major task, but the prosperity of the countries with the best business environments shows that it’s worth it. In other words, governments have a double benefit in a simplified business environment – growth and help in meeting the SDGs. A booming private sector also offers higher tax revenues to fund the cost of the SDGs. It also meets the SDG 8 target to ‘Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries’.

Embracing the SDGs can also help firms’ image and in turn their profitability. Consumers are becoming increasingly choosy and want products that are ethical and meet environmental standards. They may turn away from companies that exploit their workers and employ children. They often prefer food products where animal welfare is protected. Becoming carbon neutral can help attract customers. Consumers in export markets have boycotted products from countries which have a dubious human rights record. Besides, the rise of social media and the internet have made it impossible for companies to ignore public sentiment.

In other words, practices, image and profitability also align in supporting individual firms and achieving the private sector. These considerations are central to UNDP’s partnership with Yeti Airlines to develop sustainable models in the airline industry.  UNDP’s partnership with Chaudhary Foundation aims at local economic development through microenterprises, with goals in poverty reduction, innovation and gender equity. Many more such partnerships are possible in Nepal, with diverse linkages to the SDGs.

All of the above underpins UNDP’s support for the Business Coalition for the SDGs. This is a call for action on the part of the firms to view their profitability, their business practices and achievement of the SDGs as mutually reinforcing. ‘Do things the SDG way and raise your profits’ is the central message. The Business Coalition provides the first step in bringing firms into this partnership which will benefit them and the country.

Kemkhadze is Deputy Country Director at UNDP Nepal