Dear Global Sourcing Council community member,
I am pleased to bring you our first greetings in 2016 on behalf of the Board of Directors of the Global Sourcing Council.
P is for Profit
We are moving into a new era in business, in which socially and environmentally responsible sourcing is not just a “nice-to-have” gambit in your marketing portfolio. Consumers are voting with their wallets for responsible products, and employees are offering their talents to entities committed to ethical, sustainable business.
Beyond this, the mainstream financial industry and investment communities are increasingly examining Environmental-Social-Governance (ESG) risks and opportunities of the companies in which they invest. They increasingly incorporate ESG criteria and sustainability data in decisions on where capital flows, and how companies are valued in the capital markets. As millennials become investors, they are driving intense demand for sustainable investment products, and the capital markets are responding with innovative offerings from data providers, analyst research, indexes, impact investing, ETFs, mutual funds, sustainable retirement fund options, and more.
A key opportunity for the private sector in 2016 is found in the 2030 Agenda for Sustainable Development, adopted at the UN by heads of state and government in September 2015, and its Sustainable Development Goals (SDGs). These 17 global goals will stimulate action over the next 15 years, and stand to reshape the practice of development globally. Business entities have much to gain economically by pursuing new markets and new business models through this brand-new agenda, which took effect on January 1, 2016.
GSC will be launching a special program to showcase companies’ contributions to the SDGs. For 17 consecutive weeks, we will highlight one SDG per week, also lending the spotlight to those who have made it their business to take action on each goal.
Why should businesses align with the SDGs?
First, businesses cannot succeed unless the world succeeds. As Unilever says, there is no business case for enduring poverty.
The Harvard Business Review (HBR) recently ran an article identifying three other, even more immediate reasons to care about the SDGs:
- New Markets: The SDGs represent a significant new opportunity for companies for whom emerging and frontier markets are a source of long-term growth, as “trapped value” in these markets is overcome through progress on the SDGs. According to estimates from McKinsey, consumer spending in these markets could be worth $30 trillion by 2025, a significant step up from the 2010 value of $12 trillion.
- Competitive pressure: Many companies have publicly pledged to help with the SDGs. Early-acting companies could get a jumpstart in their industries by organizing partnerships and even positioning themselves as leaders in sustainable development, using the Goals as a branding anchor. Being slow to take action could lead to being left out of these relationships and become a source of competitive disadvantage from a brand equity perspective.
- The World Needs You: The Goals cannot be realized without business participation. The price tag for accomplishing the SDGs is estimated to be up to $3 trillion a year for 15 years. For most governments, financing the Goals’ achievement will be a stretch; governments have already reneged in the past on commitments for similar targets. This time around, many governments and UN leaders have stressed the importance of private sector support to meet the world’s Goals.
In addition to the five “Ps” identified by the world’s governments as shared priorities, there is a sixth P – profit, as Bhaskar Chakravorti notes. The SDGs can be utilized as a framework for innovation and investment, and we invite all businesses to join us in showcasing how your work is aligned with one or more of these brand-new global goals.
The 2030 Agenda took effect as the clock struck midnight in every country around the world on January 1, 2016. On the occasion, the UN General Assembly’s president said that private companies – along with civil society and young people – will “be with us every step of the way over the next 15 years,” and that many companies are showing that “the change we need is not only possible but already happening.”
Is your company part of that change? How is your supply chain already working to make the global goals for sustainable development a reality?
Share your SDGs story!
Contact Lou Coppola to be part of the GSC 17 Weeks / 17 SDGs Initiative!
Best wishes for a fulfilling 2016 and success in building sustainable and responsible global business.
Chair of the Board
Global Sourcing Council