Haoliang Xu: Speech at the CSR Asia Summit 2016Sep 27, 2016
28-29 SEPTEMBER · KOWLOON SHANGRI-LA ·
Mr. Richard Welford, CSR Asia Chairman,
Ladies and Gentlemen,
I am most pleased to be here at the 10th CSR Asia Summit and appreciate the opportunity to discuss how we can work together for a more sustainable future.
I have just arrived from the United Nations General Assembly in New York where world leaders discussed progress achieved one year into Sustainable Development Goals (or SDGs) implementation, and the broad partnerships needed to achieve these ambitious goals.
I am encouraged by the initial results. Almost every country in Asia-Pacific has already started to implement the goals.
They have begun integrating SDGs into their development plans and legislation.
This is therefore a very timely occasion to discuss the topic of “Sustainability Leadership” with corporate partners from countries in Asia-Pacific.
Your work is very relevant to the transformation toward prosperous, peaceful and sustainable world.
The economies in Asia-Pacific accounted for less than 30 percent of the world’s GDP in 2000. Thanks to your entrepreneurial drive, this contribution had risen to almost 40 per cent by 2014.
Consequently, the number of people living in poverty in the region fell sharply from 1.1 billion in 2000 to an estimated 314 million today.
We have to recognize that this would not have happened without the participation of private sector. Now we need to build on this success and scale it up.
Achieving the SDGs is a historic undertaking. According to the UN Conference on Trade and Development (UNCTAD), between $3.3 trillion and $4.5 trillion a year in government spending, private investments and aid will be needed to meet the targets.
These ambitious goals will not be achieved without a revitalized and enhanced Global Partnership.
According to a recent Accenture – Global Compact survey conducted in 100 countries, 87 percent of CEOs believe SDGs provide an opportunity to rethink sustainable value creation; 85 percent see cross-sector coalitions and partnerships as essential for transformation; and 84 percent calls for close collaboration with government on SDG action plans.
We are now hearing of many companies incorporating the SDGs into their corporate mission statement, because they believe that future business success will depend on being inclusive and sustainable.
On average, businesses accounts in developing countries for 60 percent of GDP, 80 percent of capital flows, and 90 percent of jobs. By adopting sustainable practices, companies can also gain a competitive edge, increase their market share, and boost stakeholder value.
Embracing the values and aspirations of the SDGs is how companies will succeed in the future - in the world of constant change and communication.
So the question is: How do we fully unleash the economic power of the private sector to realize the SDGs?
Solutions will involve everything from regulation to disruptive innovation – and everyone from government leaders and CEOs, to teachers, activists and citizens.
Bold sustainability leadership is required to shift the paradigm.
The necessary transformation can be achieved by making sustainable development essential in company strategies and a core competence of companies.
It will require also better use of synergies, complementarities and interplay between public and private.
It will take new blended financial models that integrate sustainable development as a fundamental purpose.
Allow me please to discuss three ideas today. First, expanding inclusive business is one way we can enhance the role of the private sector in sustainable development.
Inclusive businesses encompass corporate social responsibility, philanthropy, and impact investment. They connect poor people to markets and services, and directly improve people’s lives by making them suppliers, distributors, retailers, or customers.
We have found significant common interests in aligning private sector core business to address development gaps.
Companies are working with us to include low-income communities into their value chains which benefits both the company as well as the people.
For example, IKEA has partnered with UNDP in India to empower 3.2 million women through increased productivity and revenue generating activities, which also strengthened IKEA’s own supply chain.
Another example is how Huawei is bridging digital divide—with over 45 global training centers where they help develop ICT skills while providing network access to people in remote areas to bridge information gap.
These examples demonstrate that companies that provide goods, services, and opportunities to people living at the bottom of the economic pyramid - whose collective purchasing power exceeds US$5 trillion - will have significant growth and cost saving opportunities, while creating high development impact.
However, companies cannot advance inclusive business alone, they need support from many stakeholders, which brings up the second point, the importance of partnerships in realizing this new global development agenda.
UNDP has a track record in convening multi-stakeholder platforms and initiatives to support scaling up inclusive business and private sector engagement at the global, regional and country level.
UNDP, the World Bank Group, and the IFC, have launched a global platform for Inclusive Business at the G20 in China this year. It is focused on capacity building, policy research, and analysis.
At the same time, we are seeing that Public-Private-Partnership (PPP) is becoming more significant in developing countries for SDGs implementation, particularly, at local level, both in terms of quantity and diverse modalities.
According to UN DESA report, more than US$ 800 billion in private investments went into PPP projects in Asia from 1994 to 2014, and the amount is increasing.
Private companies are increasingly collaborating with governments to create jobs, establish value chains, build infrastructure, deliver services, and participate more in public policy and regulation that advance national development goals.
This involves sharing responsibilities and risks, joint investment, ensuring effectiveness, efficiency and transparency of partnerships.
UNDP is working closely with governments to facilitate such broad-based partnerships, and at the same time, engaging leading companies in innovation, leveraging private sector technologies and skills, and helping companies to deliver sustainable results in communities where they operate.
In Bangladesh, with support of the Bangladesh Cricket Board and others, we are using crowdfunding to launch a hi-tech mobile classroom where young people from the poorest neighborhoods can learn coding.
This kind of partnerships that involve all stakeholders – governments, the private sector, development partners, the United Nations system, banks, research institutions and civil society– will be essential for the post-2015 sustainable development agenda.
Last but not the least, aligning capital market with the SDGs is rapidly becoming a key part of the success formula. The SDGs aim to redirect global public and private investment flows towards the challenges they address.
Impact investing, which seeks both financial and social return, has the potential to unlock significant sums of private investment capital to complement public resources and philanthropy in addressing pressing global challenges.
The size of impact investing has grown from US$639 billion in the mid-90s to over US$5.6 trillion at the beginning of 2014.
China and India has each launched its national network for Impact Investing, with broad participation from financial and business sectors.
We have seen bold and innovative investment decisions by impact investors to support SDGs such as poverty reduction, sanitation, renewable energy, etc.
The successful scaling of Bridge Schools from Kenya to India is a case in point--with an innovative model of using online technology-driven teaching method and an affordable tuition of $5 dollar per month, it received funding from a broad range of impact investors, including Mark Zuckerberg, Bill Gates, the IFC and Novastar. As a result, poor kids are getting education in 400 schools in Africa and Asia.
At UNDP, we are one of the leaders of the impact investing agenda in the UN.
We launched a 'blended finance' fund dedicated to promoting social impact investing, the United Nations Social Impact Fund.
It is a Social Impact Investing platform for partners to co-invest to achieve the SDGs. The UN Environmental Programme, UN Fund for Population and UN Capital Development Fund are co-founding partners.
Here in Hong Kong, we partnered with the Haifu International Finance Holding Group to scale up the United Nations Social Impact Fund activities to expand impact investing across Asia and the Pacific.
We aim to create an open platform that will facilitate collaboration among CSR funds, philanthropists, and government resources, as well as private funds and other institutional investors, to accelerate businesses that can drive social and environmental benefits.
Tomorrow, I am signing here another partnership – with the Baoshang Bank. They will work with us on creating better future for young people by supporting youth entrepreneurship and inclusive finance.
And we need more financial institutions and investors to join force in implementing SDGs, to meet the financing gap.
All these activities are translating ‘public-private dialogue’ into ‘public-private action’, and driving governments to create enabling environments for the private sector to engage more in, and accelerate, sustainable development through their core business and expertise.
UNDP has been behind some of the most iconic development successes in the last 50 years. For example, the transformation of Singapore and South Korea. Or the launch of tourism industry in Thailand which brings 30 million visitors per year.
But there is no room for complacency.
Our mission here is to identify how each of us will support the achievement of these global goals utilizing our core business, our expertise and skills, and our human and financial resources.
As U.N. Secretary General Ban Ki-moon calls on us for bold moves to ensure that the global community stays on track to achieve the SDGs by 2030, sustainability leadership is needed at all levels.
All sectors must act differently, collaboratively, and become dramatically more efficient and effective if we are to meet these ambitious targets.
Let me conclude by saying that development means business.
Good development has always been smart economics.
I look forward to hearing your vision, leadership and progress made on this important agenda during this summit, and discussing with you how UNDP can partner with you to take joint actions!