By Maggie Arbogast, Programs
Sustainable Development — Health and Wellbeing for All
The Sustainable Development Goals (SDGs) call upon all global citizens to work together towards an end to poverty, protect the planet and ensure prosperity for all. As part of that vision, SDG 3 singles out the need to ensure healthy lives and promote well-being for all at all ages. Health is key to the success of the SDGs, underpinning or affecting many other SDGs including those dealing with food systems, poverty and gender equality. The SDG 3 targets—which include ending the major epidemics of AIDS, tuberculosis and malaria, reducing premature deaths and achieving universal health coverage—must be achieved within the context of population growth in developing regions, rapid urbanization, increasing globalization, and climate change.
Financing the Vision
It’s estimated that achieving the SDGs will require an additional investment of $2.4 trillion per year. The Lancet Commission on Global Health 2035 has suggested that low- and middle-income countries would need to spend at least $38 billion more per year on healthcare between 2016-2025 and $53 billion more per year between 2026-2035 to prevent 10 million deaths and meet child mortality, AIDS and tuberculosis SDG targets–dramatic gains that could have benefits exceeding the cost of investment by a factor of twenty. However, the question of where these additional investments into health will come from has been the hot topic of discussion over the last few years.
While Official Development Aid (ODA) hit an all-time high in 2016, recent political signals from several donor countries caution against the expectation that ODA will bridge the development financing gap. It is therefore logical that during the 2015 Financing for Development Conference in Addis Ababa, leaders called for innovative solutions to incentivize greater private sector investment. In the development context “private sector” is often loosely defined to encompass business, the financial sector, institutional investors and philanthropists. However, it is important to recognize the different roles the financial sector (institutional investors) and business sector play in supporting sustainable development.
Institutional investors are well-placed to shift investments into activities which support sustainable development by adding positive environmental, social and governing principles into their screening and due diligence processes. Portfolio company evaluations could also incorporate social and environmental metrics alongside financial ones.
While unrealistic to expect that philanthropic investments from businesses will cover the entire $2.4 billion, the Business & Sustainable Development Commission has identified three areas where business leaders can encourage a shift towards investing more sustainably and reduce the pressure placed on investors to generate quick returns.
- Creating standardized and open-access systems for businesses to report performance against the Global Goals allowing sustainably-minded investors to compare potential investments and to encourage competition among businesses to increase performance. The Access to Medicine Index—which analyzes twenty of the world’s largest research-based pharmaceutical companies on how they make key medicines more accessible to low- and middle-income countries—is an example of how standardized systems can provide companies and investors transparent information to start a “race to the top”;
- Massively scaling-up the availability of blended finance—which shares risks between public and private investors—to plug the global gap in infrastructure investments; and
- Revising financial regulations to allow the right type of long-term investments—such as in infrastructure—as well as to support financial inclusion, SME financing and more, that will be needed for sustainable development.
Beyond supporting the crowding-in of private investments, businesses have an important role to play in increasing health and well-being—both globally and locally—by making sustainable development a core operating practice as well as lending their expertise through partnerships to increase capacity and lobby for policies that support sustainable development.
A New Way of Doing Business
Companies are embracing the SDG Agenda in several ways. Some are thinking about the SDGs as a useful framework for reporting Corporate Social Responsibility (CSR) efforts. Others see that SDG 3 opens up significant potential for businesses to make social impact while enhancing business value. The Commission estimates that the 13 largest opportunities for businesses addressing challenges related to health and well-being have a potential value in 2030 of $1.8 trillion.
In a positive signal, a growing number of companies are moving beyond CSR to strategically integrate SDG principles as part of their core business strategy–evaluating non-traditional market opportunities and understanding responsible investing as key to reducing risk. These companies include those on Fortune’s Change the World Listhich highlights companies that are using a profit motive to solve social issues. The companies include the likes of Novartis—for pioneering a pay-for-performance pricing model of its newest cancer treatment—and Nestle for cutting sugars across its product line.
Business leaders including Paul Polman (Unilever) and Bob Collymore (Safaricom) have come together to form the Business & Sustainable Development Commission to mobilize their peers in embracing sustainable development as a necessary—and in the long-term, economically beneficial—new way of doing business. Increasingly, companies are ascribing to the Richard Branson-coined idea that “doing good is good business”.
Business — A True Development Partner
Forging long-lasting partnerships with shared goals between the private sector and other development actors has the potential to bridge sustainable development capacity gaps while bringing the private sector to the table as a full development partner. The private sector will continue to support improvements in global health and wellbeing by:
- Improving the health and well-being of employees and those in their supply chain;
- Providing technical expertise to implementers of health programs (including governments and NGOs) to overcome challenges and improve efficiency; and
- Engaging in “responsible lobbying” to influence policy makers to adopt health-supportive policies and encourage private sector peers to adopt health-supportive activities.
GBCHealth has made leveraging resources of the business community for positive impact on global health challenges the heart of its mission. Since the organization’s founding, companies have become increasingly sophisticated development partners. While the examples are numerous, we highlight a few below.
Providing Technical Expertise – Private Sector Delegation and the Global Fund
Formed in 2002 to address the AIDS, TB and malaria epidemics that were crippling many countries around the world, the Global Fund, through its grant-supported programs, has since saved 20 million lives with the private sector playing a vital role in this partnership. The Private Sector Delegation (PSD) to the Global Fund—a group of companies that brings business expertise, assets and networks to the Global Fund in support of its life-saving mission—is currently working with the Global Fund to develop a platform for companies to assist in strengthening health commodity supply chains focusing on data, capacity building, and knowledge sharing to ensure recipients of Global Fund programs have timely access to quality commodities.
Partnering to Harness the Demographic Dividend – GBCHealth and UNFPA
With Africa’s population expected to peak at 1.6 billion by 2030—nearly 70% of which will be working age – harnessing the economic potential of this population change into a positive force for development will be one of the greatest challenges for African nations over the next 15 years.
Ensuring good health and well-being will be key to creating an environment where youth can reach their full potential. The private sector can play an important role in accelerating progress and removing barriers for women and girls to access sexual and reproductive health services by helping to generate demand; reinforcing commodity availability and optimizing supply chains; training health workers; advocating for supportive local and national policies; and developing and co-funding innovative financial mechanisms to attract new donors. GBCHealth is partnering with UNFPA’s West and Central Africa Office to drive private sector input and investments towards areas where business can have the greatest impact—effectively applying the resources and expertise of the business community—in capturing the positive development potential of the demographic change.
Mobilizing Business in Emerging Economies – Health & SMEs
Africa as a whole grew at 3.6% in 2015, amid global headwinds and regional commodity shocks. The continent currently has 400 companies with revenue of more than $1 billion per year, and these companies are growing faster, and are more profitable in general than their global peers. Investments in better training, healthcare and supply chain accountability have demonstrated direct financial return through gains in productivity and efficiency, while supporting social progress.
And it’s not just corporate giants that will help to shape the future health of many African countries. As explored in a recent GBCHealth article, Small and Medium-scale Enterprises (SMEs) create 80% of employment opportunities in Africa and are vital to the continent’s economic, political and social stability. SMEs who pay attention to keeping their employees as healthy as possible—through dedicated workplace programs, or through linking employees to private insurance markets and national health insurance schemes—will have a distinct advantage over their competitors. Given the growth of SMEs, convincing them of the value of investing in employee health through national insurance schemes may be the most direct path towards achieving universal health coverage. GBCHealth looks forward to working with SMEs in Africa to help managers recognize the tangible benefits of investing in health and to support partnerships which accelerate progress on universal health coverage.
Guidance on Coordinating Efforts to Support the Control and Elimination of Malaria – CAMA Maps Business Impact
Tremendous progress has been made in the fight to end malaria. Since 2000, malaria treatment and prevention programs have saved an estimated 4.3 million lives with private sector contributing greatly to this progress. Businesses have impacted communities through workplace initiatives, developed product and service innovations, shaped policy and invested in malaria research and improved supply chains. Despite advances, steep challenges remain in the fight to end malaria for good. Millions are without access to preventive measures and many cases go unreported and untreated. Malaria perpetuates a cycle of poverty, disrupts education, contributes to stunting in children under-five and has devastating effects on maternal and newborn health.
The private sector can have enormous impact by advancing technology; developing new medicines, vaccines and vector control products; advocating for increased financing; and improving the efficiency of commodity delivery. To support these efforts, GBCHealth’s Corporate Alliance on Malaria in Africa is leading a research project to map global corporate investments in malaria, and identify the needs and gaps in malaria programing. This work will help define clear and simple strategies for how the private sector can best engage in innovation, policy, implementation and finance; identify key points of entry for companies of all sizes to support malaria control and elimination; and stimulate increased and more efficient investments. The project will build on methodology used in earlier research and detailed in a report released this year entitled Mobilizing Nigeria’s Private Sector for Malaria Control and Elimination.
What Will Private Sector Investments in the SDGs Look Like?
The private sector has an extremely important role to play in the success of the SDGs. Investments into health will have direct impact on employees, customers and communities. By increasingly investing in businesses that are addressing social and environmental issues, institutional investors will better support progress in meeting SDG goals and can have significant impact on long term sustainability of limited resources. The development community must recognize that partnerships with the private sector to build capacity in support of sustainable development will play an equally important role in our collective success.
For more information on how the private sector can support and drive sustainable development, GBCHealth recommends the following publications:
- Better Business, Better World (Business & Sustainable Development Commission)
- Development Co-operation Report 2016 – The Sustainable Development Goals as Business Opportunities (OECD)
Contact GBCHealth at email@example.com for more information on how your company can participate in any of the aforementioned programs.