Sustainable development goals: the contribution of business and government. Expert discussion in the framework of the Gaidar Forum
The UN Sustainable Development Goals became today the broadest and the most structured international agenda in the field of sustainable development not only for national governments, non-profit sector, academic institutions and civil society, but also for business, which the UN has officially included in the main drivers for achieving global goals until the year 2030. On January 16 in the thematic expert discussion of the Gaidar Forum, representatives of Russian ministries and leading companies talked about how the agenda is perceived by the state and business, whether they share it as common and understand as a joint perspective.
Moderator of the discussion, Alexander Plakida, Chairman of the Governing Council of the Association “National Network of the Global Compact”, Managing Partner of Alliance Consulting, highlighted the main objectives of the panel: discuss the overall progress in implementation of the SDGs in the world and in Russia, and assess the prospects for the development of cooperation between business and the state in this regard. How to move from mutual expectations to communication taking into account international experience based on the UN Global Compact?
The world organization has given the Global Compact the status of a major platform for business involvement in achieving the Sustainable Development Goals. This takes into account several key assumptions, including the main ones: the achievement of the SDGs is impossible through the efforts of any one of the parties; global change begins and happens primarily locally; the basis of the interaction of business, state and society in the context of the SDGs should be a country-based approach and active partnerships. Such partnerships are working quite actively in the world in various areas. Marina Vashukova, Executive Director of the National Network of the Global Compact Association, presented five main areas of cooperation between government and business to promote the global agenda in different countries where the Global Compact operates.
1. Raising awareness. Helping businesses understand the SDGs and the risks and opportunities arising therefrom. The localization of Agenda 2030 begins with awareness among politicians, companies, investors, trade unions, civil society organizations, academic institutions, consumers, and citizens in both developed and developing countries. Actors are needed in all sectors, in companies of all sizes. In 2018, more than 1,500 seminars and events in the format of public-private interaction aimed at raising awareness were held at the UN GC site with the participation of at least 14,000 companies.
2. Capacity building. Actualization of business approaches, implementation of the SDGs in a business strategy, etc. Almost 80% of the companies participating in the UN GC are already taking action in the field of SDGs. But the main demand is for practical tools and solutions. In order to expand these capabilities, the UN GC networks, in partnership with national governments, organized about 800 events last year, which involved almost 7,500 companies in the discussion of more than 150 practical tools for implementing the SDGs in business strategy.
3. Promotion of the agenda through leadership business practices. Identifying and encouraging leaders, promoting their practices. Over the past year, local networks have collectively demonstrated inspiring practices of nearly 2,000 companies.
4. Political dialogue. Participation of responsible business in the development and implementation of national action plans, strategies and policies. Key instruments for implementing the SDGs are national action plans that may include many different elements: national goals, regulation, re-equipment of procurement policies, new pricing mechanisms or taxes on environmental or social capital, including incentives for companies to participate in sustainable development. The UN considers it most appropriate to involve business in the development of such plans, in particular at such consolidated sites as the UN GC. To this end, institutional mechanisms for the participation of relevant stakeholders in the dialogue around the development of national action plans and public policies on SDGs are being created in many countries around the world. If we talk only about the UN GC, in 2018, more than 200 such initiatives were implemented with the participation of more than 6,000 companies around the world. In 2017 and 2018, 29 local networks made their contribution to the voluntary national reviews presented at the high-level Political Forum in New York.
5. Multilateral partnerships. Promoting collaboration, collective action. In 2018, More than 4,000 companies declared various thematic partnerships in the context of the SDGs at the UN GC site and in collaboration with national governments.
“There are examples of the national or regional governments participation in larger-scale initiatives that go above the country level,” added Marina Vashukova. “A common option is surveys, studies, the results of which are then used by the UN and all interested parties. For example, such studies were conducted by Eurobarometer (a series of surveys under the auspices of the European Commission). Thanks to this resource, in 2016, more than 27,000 Europeans inquired about the SDGs. Another example is the current Global Survey on SDGs. Its task is to identify sustainability priorities for each country and sector. This study is funded by the German government (the Federal Ministry for the Environment), managed by S&C Consultants for Corporate Responsibilities and Yale University.”
In Russia, we cannot talk about this level of interaction within the global agenda yet. Although over the past few years, Russian business has demonstrated unconditional and significant progress in understanding the peculiarities of its involvement in sustainable development processes in various aspects: thematic (priorities in implementing the SDG, areas of focus, motivation, expectations, etc.), structural and managerial (transformation of sustainable development management systems, transfer of responsibility in this area to a higher level of management, etc.), financial and investment (awareness of involvement in the global agenda is not only as a factor of cost reduction due to risks occurrence, but also as a factor for investment attractiveness, obtaining financial preferences, etc.). At the same time, for the purpose of further qualitative step forward, considerable efforts and collective actions are needed to clarify this understanding and to move from discussing priorities to introducing a methodology to achieve them, to transforming business strategies and business models in the interests of the SDG, as well as to measuring specific practical results both in terms of socio-environmental effects, and in terms of growth and development of the business itself in a global economy.
What aspects and common joint tasks should be included in the field of cooperation in order to make this qualitative step? Various versions and contexts were presented by representatives of the authorities (Ministry of Foreign Affairs of the Russian Federation, Ministry of Construction and Housing and Public Utilities of the Russian Federation, Ministry of Health of the Russian Federation), on the one hand, and leading companies already involved in the global agenda (Severstal, MTS, “ Metalloinvest "," Scania-Rus ", Johnson & Johnson, etc.), on the other hand, as well as the philanthropic sector represented by the Charity Fund" System "and" Rybakov Fund ", and organizations that provide consulting and expert support for the topic in Russia – the UN Information Center, the Russian Union of Industrialists and Entrepreneurs (RSPP), FBK Grant Thornton, PricewaterhouseCoopers Center for Corporate Social Responsibility with Graduate School of Management, Saint Petersburg University, MGIMO.
Pyotr Ilyichev, Director of the Department of International Organizations of the Ministry of Foreign Affairs of the Russian Federation, noted that in Russia the global agenda is harmoniously integrated in the presidential decrees of last year – poverty reduction, increase in life expectancy, digitalization of the economy, etc. “The Foreign Ministry is trying to assist those players that make a real contribution to the achievement of the SDGs”, emphasized P. Ilyichev. “This happens both at individual sites (for example, within the framework of the CEF), and at the level of international relations building (measures to establish relations between the regions and the UN with the help of the UN Association of Russia and others). Many companies — PhosAgro, RUSAL, Gazprom, Rosatom, and others — are doing a tremendous job. In 2020, Russia will have to submit a report on its contribution to the achievement of the SDGs, and in preparing this report, a separate role will be assigned to our companies, which we invite to join in the work.”
“It is very important for business that its voice be heard in the world community and elsewhere,” added Vladimir Kuznetsov, Director of the UN Information Centre in Moscow. “For this there are special mechanisms that allow businesses to participate in the implementation of the sustainable development agenda. For example, Rosstat meetings devoted to the development and discussion of SDG indicators are held publicly. Business representatives have the opportunity to participate in these meetings and other projects through ministries and departments, through the national Global Compact network.”
Andrey Chibis, Deputy Minister of Construction and Housing and Utilities of the Russian Federation, believes that the perception of the SDGs as something very remote from Russia, as an imposed document, is due to the fact that we are still discussing the global agenda very little. But at the same time we participate, one way or another, in its development. “For example, Russia has done tremendous work on SDG 11,” said Andrey Chibis. “I am talking about the formation of a program for the development of cities and towns, which was approved at a conference in Ecuador in October 2016. This document has become strategic for the next 20 years. Later, the project to create a comfortable urban environment became one of the key projects. Today it has already been transformed into national projects, one of which is “Housing and the Urban Environment”. In addition to the topic of the urban environment as such and the issues of comfortable public spaces creation, we realized that it is necessary to deal with the digitalization of urban economy and the introduction of technologies in order to effectively develop the city and balance the growing workload. We launched the Smart City project, and there is already an approved minimum standard based on digitalization.”
Andrey Chibis said that Smart City implies the operation of several digital platforms. Among them is a platform for working with citizens for their involvement in the municipal decisions making, open coordination, synchronization of the work of urban services, and so on; a security platform that can use the achievements of Russian companies in video analytics and face recognition, etc.; environmental monitoring platform; platform of digital solutions in the field of intelligent control of the road transport system, etc.
“This is directly related to the Sustainable Development Goals, because the struggle for the welfare of people and for those who are able to ensure this, who can think creatively, has come to the forefront throughout the world,” said Andrey Chibis. “We need cities that can fight for creative human capital. Now our task is to implement the minimum standard of the “Smart City” within five years in all cities with a population of over 100,000, whereas 2 or 3 cities will not only implement the minimum standard, but even go beyond it”.
Oleg Salagay, First Deputy Minister of Healthcare of the Russian Federation, said that Russia's real contribution to the global agenda is much more than it is commonly believed. For example, in 2011, the first global conference on noncommunicable diseases was held in Moscow. The declaration, which was adopted, entailed a number of serious political decisions, including WHO and UN documents.
“We know that in the SDGs, in addition to the declarative aspects, there are clearly formulated tasks,” said Oleg Salagay. “We often perceive them as tasks of a specific state body, but at the same time, we should not forget that such tasks should gradually be included on the private sector agenda. It is hardly possible to deliver these goals without a responsible business. The SDGs are not an additional part of our work, but something that should be organically integrated into our daily life. At the same time, we, of course, cannot cope only by the efforts of administrative bodies and should not perceive these tasks as assigned by an international organization to government bodies. These are the tasks entrusted to us all. For our part, we are working, for example, on programs that will help businesses motivate their employees to a healthy lifestyle. It is important for us that the emerging comfortable environment is also a healthy environment encouraging physical activity”.
According to Oleg Salagay, the Ministry of Health, together with a number of scientific organizations, with the Russian Union of Industrialists and Entrepreneurs and other associations, are developing model corporate programs that will help find the right ways to motivate an employer to care for their employees.
The calls of the authorities to work on the agenda for business leaders are no longer relevant, as work has begun and has gone quite far. Business, whose responsibility programs have evolved from targeted philanthropy to systemic, and then to CSR in the context of sustainable development and taking into account the needs of all stakeholders, considers more important other call: to work together in order to reduce the informational and expert gap between the state and society, to know more about how much progress the business has made on issues of social and environmental responsibility, and to form a common strategic vision for partnership of all segments. In this context, it would be important to take into account the existing experience and approaches presented by the business.
Natalia Poppel, Head of Corporate Social Responsibility and Brand, Severstal Management, highlighted several factors contributing to the success of a modern company: continuous development, corporate culture that integrates policies on human rights, environmental protection, energy efficiency, chain of responsible suppliers and consumption and many others, social partnerships of business, government, society and the media. “In this partnership, we are acutely lacking awareness at all levels,” said Natalia Poppel. “If what we are talking about today is translated wider then we can achieve much more.” However, our success is already quite significant. Where we work outside Russia, we have contributed to the fight against the Ebola epidemic, have built a thousand houses, opened many schools and health centers, and are investing a lot in the development of small and medium-sized businesses. Of course, these are also our main priorities in Russia. In the Soviet times, 52,000 people worked at the plant in Cherepovets with a population of 310,000. After modernization, 17,000 people are employed at the plant today, 30,000 at all the enterprises of Severstal in the Vologda Area, and over 50,000 in small and medium-sized businesses. Today, it is a territory of advanced socio-economic development. This is the merit of not Severstal only but of a huge number of people and organizations. We all have one common task: to improve the quality of life of the population. There are two work areas to achieve this: development and problem solving. Therefore, business is constantly developing and correcting development strategies.”
Alexei Shavenzov, Sr. Director, Government Affairs & Policy, Russia and CIS at Johnson & Johnson: “Healthcare companies often deal with the most acute problems. For example, the topic of HIV, which only a few decades ago was the same as a death sentence and today implies a normal life expectancy comparable to a healthy person, is relevant for us. Or, for example, our company is implementing a partnership project with a manufacturer of a drug for the treatment of tuberculosis with an innovative method of therapy. Today, the site in Russia is the second in terms of production for global health needs. Inside the company, we conducted a large-scale study to identify risk factors by examining various parameters (physical activity, healthy eating, mental health, etc.). Modern people spend most of their time at work. At the same time, everyone knows that prevention is 60% of success and contribution to the healthy lifestyle. Therefore, we set ourselves the task of becoming the healthiest company by 2020. We already have an application for the company employees called Healthy Me, with which they can earn certain points for the number of steps made, exercises, proper nutrition, etc., and then the points are transformed into donations to charitable foundations or prizes.”
Anastasia Savelyeva, Head of External Social Programs and Non-Financial Reporting Function of the Social Policy Department of Metalloinvest Management Company: “Our company also considers the concept of sustainable development as an integral part of a long-term strategy and one of the key factors of its competitiveness. At the same time, for us, sustainable development means achieving strategic goals while maintaining the balance of interests of all stakeholders. For example, when preparing a social report, starting from 2018, a list of the Sustainable Development Goals is included in the surveys of stakeholders on the most significant topics. It is also important for us that each stakeholder understands what they can do in the framework of the Goals achieving. To this end, we integrate information on the SDGs at all levels – from management and staff to residents of the territories of our presence.”
Vakhtang Partsvania, Director for Sustainable Development and Work with Government Bodies, OOO Scania-Rus: “Yes, companies must deal with issues of sustainable development from the very top down and implement these ideas in all of the company's business processes. In addition to the most obvious issues such as human rights, environmental protection, etc., business focuses on products that also contribute to the achievement of the SDGs. In our case, we are talking about transport. The transport industry is a significant source of CO2 emissions. We focus on transport performance and reducing emissions. Now our products operate at the level of efficiency class, which has small emissions on diesel fuel. In addition, we are developing alternative energy sources. Trucks run on bioethanol, biogas, vegetable oil, etc. We always take this into account in our reporting. Now companies set specific goals for themselves and publicly state this. For example, we make a commitment that by 2020 all our manufacturing operations will use electricity from renewable sources.”
Ksenia Kosogorova, Manager of the Corporate Social Responsibility Unit, Personnel Management Department, Mobile TeleSystems: “MTS implements digital technologies based on the principles of sustainable development. This is not just a fashionable trend but a necessary condition for both business development and improving the quality of life of present and future generations. Today we live in a new digital reality. The bank fits in a smartphone, it also includes online commerce, transportation services, geolocation, a cinema, training courses, government services, etc. Important industries such as agriculture and medicine are also moving towards digitalization. The ubiquity of the Internet and new technologies affect a person’s life, habits, behavior, preferences and interests. The spreading of innovations, their use in everyday life contribute to the formation of a special innovative type of thinking, which, in turn, stimulates the development of society, promotes economic growth, and is also a key to sustainable future. Along with the digital transformation of a person, a business is also transforming and is forced to take into account the current characteristics of the services consumer. MTS not only reacts to changes in the surrounding world, but also sets trends on its own. We see opportunities for growth in the search for new businesses related to the digital reality. Developing such areas as telemedicine, fintech, cloud services, the Internet of Things and big data, we contribute to the rapid migration of society into the digital world, the emergence of smart and safe cities and communities. MTS priorities have been and remain socially oriented. We share the UN global Sustainable Development Goals aimed at the world transformation. We strive to integrate the principles of sustainable development into our business objectives, corporate culture and decision-making system. That is why MTS implements a strategy in the field of corporate social responsibility focused on the achievement of 13 UN goals in the field of sustainable development relevant to the company's activities. We strive to use our full potential to make every subscriber's life more comfortable, and the business of corporate clients more efficient.”
Leaders of two charitable foundations representing the third sector also participated in the session and expressed two opposing positions regarding the motivation and purpose of business participation in achieving the SDGs.
Anna Yanchevskaya, President of the Sistema Charitable Foundation, confirmed that the Sustainable Development Goals are a natural vector for the development of modern business, which should be based on innovation and innovative business thinking: “In our work we focus on the non-profit sector, business, government, and society. Many funds are directed, among other things, to other charitable organizations in order to strengthen their competencies that contribute to eliminating the consequences of unsustainable development. Our programs are necessarily implemented with the involvement of volunteers. We have a fairly large volunteer corps. Together with the Ministry of Culture, we are implementing a project on affordable art, opening digital branches of the Russian Museum throughout the country. Last year we began to open museums across the country. We also have a big project that is similar to the SDGs – “Odyssey”, in which we engage the government, business, NGOs, and volunteers. In pro bono format, they are working on creating new breakthrough solutions.”
Ekaterina Rybakova, President of the Rybakov Foundation, is inclined to believe that commercial interests remain a business priority, and considering that huge funds are needed to achieve the SDGs, businesses are forced to participate in this process without waiting for a commercial return. “In many international forums on this topic, the non-commercial sector, non-profit organizations play the main role,” said Ekaterina Rybakova. “It speaks about the level of development of the sector and points of growth. Because the distinctive feature of the philanthropic sector lies precisely in the fact that positive social impact without return is their priority. And what is in this for business?”
Elena Feoktistova, Managing Director of Corporate Responsibility, Social Entrepreneurship and Sustainable Development, RSPP, Vice-Chairman of the Governing Council of the National Network of the Global Compact Association, gave an exhaustive summarizing answer to this question:
“Mankind has chosen and accepted the vector of movement, which will measure the success of states, business and even the possibility of our further existence. One of the world's experts says that by 2025, about 40% of companies in the Fortune 500 list will cease to exist if they keep developing the existing strategies, even at a rapid pace, but do not turn towards sustainable development.
This is why business needs an agenda – to exist, to be competitive, to preserve old and new markets, to have time to create a new product (except for the still existing need, same as for NGOs, to engage in philanthropic, humanitarian, cultural projects). In 2018 alone, 71 countries adopted strategies related to the introduction of responsible production and consumption patterns. The EU has defined a sustainable financing action plan that includes a reorientation of capital flows to support sustainable development – a whole set of supportive measures. There is a common strategy, related plans developed for it, for which, in turn, measures are taken, both regulatory-stimulating and regulatory-restrictive. The problem and risks for us today are that individual successes, which we should be proud of and show others, have not yet formed into a single strategic picture. We need a common strategy, common goals that will determine the vector of movement of our country and business. Now everyone develops a strategy for themselves and solves problems for themselves, but the country's future depends on coherence and strategically interconnected movement. Today, our common task is to formulate a common sustainable development strategy that would link national plans, business, government and NGOs, as well as all their motivations and interconnections.”
The joint work on shaping of the prerequisites for the emergence of such a strategy will be continued, including work at the site of the Russian national network of the Global Compact, which is increasingly active in this direction (in 2018, the Sustainable Development. Russia's Role” poll was organized, the work started on the review and report called “Russian business in the context of SD”, regional program for promotion of the sustainable development values has been developing, etc.). The national network encourages stakeholders to work together and strive to create a single center of competence, in which all these issues will be discussed regularly and in a single context.
10th Gaidar Forum Organizers:
The Russian Presidential Academy of National Economy and Public Administration (RANEPA);
The Gaidar Institute for Economic Policy (Gaidar Institute);
The Association of Innovative Regions of Russia (AIRR).
The general partners of the Gaidar Forum are Gazprom and Gazprombank; strategic partners include Prosveshcheniye publishing house, Coca-Cola, Pharmstandard group, ACIG Group of Companies, the Russian Textbook Corporation, SANOFI, Novartis, Johnson & Johnson, Russian Railways, MSD, and Mastercard; EY, Cisco and Russian Direct Investment Fund are partners. This discussion’s partners are Philips, Cherkizovo and RVC.
The general information partners of the Gaidar Forum include the Rossiya 24 TV channel, Forbes global media company, RBC and TASS news agencies. The official information agency is Rossiya Segodnya. The general radio partner is Business FM. The strategic information partners are Kommersant Publishers, the RT TV channel, Interfax and Gazeta.RU. The main information partners are Profil weekly, FederalPress news agency, and Invest Foresight online magazine. The international information partners are Sputnik and Cision. Other media partners include PRIME news agency, Rossiyskaya Gazeta, RNS news agency, Radio Ekho Moskvy, News.Ru, Polit.ru, Parlamentskaya Gazeta, the PRO BUSINESS TV channel, Strategia magazine, AK&M, BRICS, Ekonomika i Zhizn weekly, National Banking Journal, Expert Tatarstan magazine, the Smart Country information platform, Financial One, Naans Media, and the Public Administration scientific political journal.