How the public sector can support sustainable business

LJD

By Frederique Mestre, Senior Legal Officer, UNIDROIT


This blog is part of a special series exploring subjects at the core of the Human-Centred Business Model (HCBM). The HCMB seeks to develop an innovative – human-centred – business model
based on a common, holistic and integrated set of economic, social, environmental and ethical rights-based principles. Read more about the HCBM here, and check out an event about it here
The HCBM project originated in 2015 within the World Bank’s Global Forum on Law, Justice and Development and is now based at the OECD’s Development Centre

Development-Finance-shutterstock_524218915How can we ensure economic development while advancing social and environmental objectives? How can we promote sustainable growth – a concept that in today’s real world may sound like an oxymoron? These questions are at the core of governments’ concerns at a time when the planet and humanity are faced with greater and more pressing challenges than ever before.

The Sustainable Development Goals (SDGs) are a milestone amongst the many political and legal instruments forming global standards, policies and procedures adopted by the international community for a more sustainable planet. The SDGs call for action to respond to social and environmental challenges. They outline obligations for governments toward their citizens to promote political and social cohesion and a responsibility for them toward future generations to advance long-term sustainable ecosystems.1

In this context, governments should be responsive to virtuous stakeholder initiatives and support them with enabling policies and appropriate legal and regulatory frameworks. And one such stakeholder that can’t be overlooked is the private sector. Recognised as a major driver of productivity, inclusive economic growth and job creation, the private sector has an essential role to play in contributing to sustainable development.2 Continue reading

The role of fiscal policies for sustainability

LJD

By Karen B. Brown, Theodore Rinehart Professor of Business Law, George Washington University Law School


This blog is part of a special series exploring subjects at the core of the Human-Centred Business Model (HCBM). The HCMB seeks to develop an innovative – human-centred – business model
based on a common, holistic and integrated set of economic, social, environmental and ethical rights-based principles. Read more about the HCBM here, and check out an event about it here
The HCBM project originated in 2015 within the World Bank’s Global Forum on Law, Justice and Development and is now based at the OECD’s Development Centre.

development-financeSustainable enterprises seek to marry models for good business practices with principles of economic, social and environmental sustainability, many of which are founded on the United Nations Sustainable Development Goals (SDGs). These objectives aim to advance human rights, fair wages, healthier and safer working conditions, gender equality, child welfare, environmental protections, and ethical behavior designed to impede corruption, money laundering and tax evasion. The failure to achieve these objectives imposes considerable costs on governments: diminished productivity and quality of life for their constituents, inefficiency in the operation of markets, and reduced economic growth. An important step towards achieving sustainability goals may come through a government’s use of incentives in the fiscal regime.

Governments traditionally use their tax codes to make “tax expenditures” designed to achieve objectives that advance important policy goals or principles. For example, a government may provide a departure from normal tax rules by reducing the capital gains tax and deferring the time for when gains must be reported if a taxpayer invests in certain qualified opportunity zones that are designated low-income communities. In other words, the government is willing to forego the capital gains tax revenue it would otherwise collect in exchange for investment intended to stimulate economic growth in areas where underserved constituents reside. Other examples abound of using tax expenditures to achieve legitimate governmental ends. Consider the following three ways — substantive tax provisions, tax rate reductions and “bright listing ”– that use incentives to encourage the integration of human-centred goals into business practices: Continue reading

SMEs and SDGs: challenges and opportunities

LJD

By Dr Teodorina Lessidrenska, Consultant, World Bank


This blog is part of a special series exploring subjects at the core of the Human-Centred Business Model (HCBM). The HCMB seeks to develop an innovative – human-centred – business model
based on a common, holistic and integrated set of economic, social, environmental and ethical rights-based principles. Read more about the HCBM here, and check out an event about it here
The HCBM project originated in 2015 within the World Bank’s Global Forum on Law, Justice and Development and is now based at the OECD’s Development Centre.

women-africa
Women selling eggs in Kigali, Rwanda

Recent studies show that small and medium enterprises (SMEs) account for an overwhelming majority of private sector business and economic activity in both developed and developing countries. Given the role of micro-, small- and medium-sized enterprises (MSMEs)1 in the global economy, it is essential to understand their importance and potential contribution to the Sustainable Development Goals (SDGs)2. 

According to the World Bank3 and the OECD4, multiple reasons explain why MSME development is critical for achieving the SDGs:

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Creating value and doing good: Governance solutions for sustainable enterprises

LJD

By Professor Andrea Zorzi, University of Florence


This blog is part of a special series exploring subjects at the core of the Human-Centred Business Model (HCBM). The HCMB seeks to develop an innovative – human-centred – business model
based on a common, holistic and integrated set of economic, social, environmental and ethical rights-based principles. Read more about the HCBM here, and check out an event about it here
The HCBM project originated in 2015 within the World Bank’s Global Forum on Law, Justice and Development and is now based at the OECD’s Development Centre.

BWO_038

Charitable institutions are an established concept. So is the concept of cooperatives that advance some social goals through business activities. What is relatively new, however, are two related ideas: one is the idea that the pursuit of social goals is the business itself, and the other that the business pursuit of social goals does not mean giving up profits.

In the past decade, many initiatives burgeoned to give legal form to social business. It was necessary before to adapt the legal structures of for-profit companies to not-only-for-profit goals. Adapted standards, however, may not always be effective or may expose entities to legal risks. Now, many jurisdictions provide legal forms for ‘social enterprises’, which are generally expected to pursue only ‘social, environmental or community objectives’, rather than both for- and not-for-profit goals and to reinvest most of their profits.[1] The most important difference between social enterprises and other non-profits is that social goals are pursued by carrying out the business rather than giving out money, goods and services to the needy.
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Transforming the Businesses that are Transforming our World

LJD

By Dr Isabella D. Bunn, Research Fellow in Governance and Global Ethics, Regent’s Park College, University of Oxford


This blog is part of a special series exploring subjects at the core of the Human-Centred Business Model (HCBM). The HCMB seeks to develop an innovative – human-centred – business model
based on a common, holistic and integrated set of economic, social, environmental and ethical rights-based principles. Read more about the HCBM here, and check out an event about it here
The HCBM project originated in 2015 within the World Bank’s Global Forum on Law, Justice and Development and is now based at the OECD’s Development Centre.

 

Mario-KantsukeThe 2030 Agenda for Sustainable Development – under the banner of transforming our world – is a call to action. All countries and all stakeholders are invited to implement this agenda, including the private sector. In fact, the 2030 Agenda acknowledges that ‘’private business activity, investment and innovation are major drivers of productivity, inclusive economic growth and job creation. We call on all businesses to apply their creativity and innovation to solving sustainable development challenges’’ [§67].

But, how is business responding? Around the world, companies of all sizes and sectors are forging new strategies and collaborations to help realise the SDGs. Organisations such as the UN Global Compact and the World Business Council for Sustainable Development offer practical guidance. The UN Development Programme identifies potential projects through its “Business Call to Action.” Multiple institutions are shaping mechanisms for green finance. Further impetus comes from the business case for the SDGs; the Business and Sustainable Development Commission confirms the multi-trillion dollar scale of this opportunity.

The scope of private sector actions, bolstered by diverse partnerships, is impressive. Yet, advancing sustainable development will depend on more than what business might do. It will also depend on what business might become. Thus, the real opportunity is for policy makers, business leaders and other stakeholders to leverage the 2030 Agenda to create lasting change within the private sector itself. Consider the following five themes as potential leverage points for change. Continue reading

A perspective from the financial sector on sustainable business

LJD

By Professor Angela Sansonetti, Golden for Impact Foundation


This blog is part of a special series exploring subjects at the core of the Human-Centred Business Model (HCBM). The HCMB seeks to develop an innovative – human-centred – business model
based on a common, holistic and integrated set of economic, social, environmental and ethical rights-based principles. Read more about the HCBM here, and check out an event about it here
The HCBM project originated in 2015 within the World Bank’s Global Forum on Law, Justice and Development and is now based at the OECD’s Development Centre.

For too long, the financial system worked on its own set of principles focused on attracting clients and maximising short-term profits. These principles, growth within a capitalist and closed economy, are no longer suitable in a circular and sharing economy focused on customer needs as well as on environmental, social and governance rules. Today, several forces are pushing towards a new framework oriented to sustainable development, social innovation and human-centred approaches based on these rules.

In this transition environment, the financial system, plays a key role in driving economic growth towards values of sustainability based on promoting, amongst other factors, greater environmental responsibility, climate resilience, low-carbon, human rights, gender equality, social inclusion and sustainable economic growth. The financial system results from a long-term evolution related to global economic growth and founded on macro-economic choices as well as defined legal, technological and government rules. However, nothing is irreversible. So, in this changing context, sustainable finance plays a key role to support the shift from traditional economies based on high-impact and high-carbon industries to clean-energy and low-carbon sustainable industries.

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