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Reimagining sustainable business

The value of platforms and new coalitions

Covid-19 and the challenges of climate change have made the need for new approaches to doing business to manage systemic shocks very clear. In response, several multi-national companies have formed coalitions and announced ambitious new sustainability commitments.

Multi-stakeholder platforms have seen an increase in focus on impact-driven enterprises and a shift in intentionality and innovation.

Inclusive business models can provide solutions to the unequal distribution of value in supply chains, and these can help companies target larger sustainability goals.

By striving for unified impact metrics and benchmarks, companies in coalitions can provide opportunities for better living standards for smallholder farmers who work in sectors such as cotton and cocoa.

Coalitions can also be valuable by creating new funding opportunities that fill financing gaps and provide space for innovation.

Impact management and measurement and selective inclusion criteria provide accountability within platforms and can minimize “greenwashing.”

elderly woman wearing mask, Philippines

Covid-19 has shown the need for sustainable transformation.

Covid-19 and the challenges of climate change have made the need for new approaches to doing business to manage systemic shocks very clear. At the same time, consumers are increasingly questioning where their products come from and if they are sustainably produced. In response, several multi-national companies have made ambitious new sustainability commitments. Recently, high-level multi-stakeholder platforms and initiatives have been launched, including the World Business Council for Sustainable Development (WBCSD)’s Vision 2050 and Business for Inclusive Growth.

Filippo Veglio, Managing Director of WBCSD, believes that levels of ambition are rising: “The zeitgeist has finally caught up with the urgency of the challenges that we face, and leading companies have been part of frank dialogues about the need to dramatically raise levels of ambition and accelerate action in a more systematic way.” WBCSD’s Vision 2050 framework for business action to drive transformation was the result of a two-year collaborative approach among 40 member companies.

market scene

Consumers are questioning where their products come from.

A focus on intentionality and impact

What role do coalitions and platforms play in reimagining sustainable business? And how do they provide opportunities for those in their supply chains, by focusing on inclusive business models? Business Call to Action (BCtA), one of the most established platforms for sustainable business, has witnessed membership expand over the last decade to include primarily impact-driven enterprises, according to Luciana Aguiar, the head of BCtA. “We see this shift in intentionality and focus on impact across all different company sizes, sectors and regions of operations.” One sector that particularly stands out for innovation is the agriculture sector, with a new focus on regenerative and climate-smart agriculture practices.

Coalitions can provide opportunities for better living standards for smallholder farmers who work in specific sectors, such as cotton and cocoa. Food and agri-business Olam International has joined a coalition of peers, including the Sustainable Food Lab, Global Living Wage Coalition, Anker Research Network, and the Living Income Community of Practice, to develop living income benchmarks for all cocoa producing countries they source from. The coalition aims for 150,000 farmers to be earning a living income by 2030. In his blog, Olam’s head of cocoa sustainability, Andrew Brooks, tells us why this effort is critical: “We will not create a truly sustainable future for cocoa until we can make sure farmers can earn a decent income from their crop.”

women harvesting

One sector that particularly stands out for innovation is the agriculture sector.
 

Highlighting innovative, inclusive business models

Inclusive business models can provide solutions to the unequal distribution of value in supply chains, and these can help companies target larger sustainability goals. Forum for the Future is identifying innovative and inclusive business models in the cotton industry as part of the Cotton 2040 initiative. Charlene Collison, Associate Director for Sustainable Value Chains and Livelihoods at Forum, explains in her interview how Cotton 2040 collaborated with World Resources Institute (WRI) to conduct research in multiple countries to identify the core characteristics of a sustainable business model. “We need new business models to become mainstream that build in equity and share risk more fairly across the value chain,” she says.

woman working in the field

Coalitions can improve living standards of smallholder farmers.

Creating new investor coalitions

Coalitions can also be valuable to creating new funding opportunities that fill financing gaps and providing space for innovation. For example, Grameen Capital India has developed Sustainable Development Goals (SDG) Impact Bonds that bring together inclusive businesses and connect them with outcome funding. In choosing entrepreneurs to partner with, Royston Braganza, CEO of Grameen Capital India, explains: “It’s important that we showcase the diversity of business models within each SDG goal.”

Karoline Heitmann and Nicolas Malmendier of the European Venture Philanthropy Association (EVPA) also share their research to explain why companies are forming new coalitions with social investors to accelerate their shift towards more sustainable and inclusive business practices. Corporate social investors can fill funding gaps to support small inclusive businesses and help them scale; they also act as “learning labs” and provide ideas for new innovations to address societal needs and challenges.

local market seller

It’s important that we showcase the diversity of business models within each SDG goal.
 

Impact measurement for accountability

How do new platforms and coalitions mitigate the possibility of “green-washing” or “SDG-washing”? In some cases, coalitions accomplish this by being very selective about membership and monitoring the actions of their members. Impact measurement plays a large role in some coalitions, such as BCtA. “IMM (impact measurement and management) mitigates the risk of SDG-washing and green-washing by fostering a culture of ongoing assessment of business commitment vis-à-vis impact,” says Ms. Aguiar. Indicators such as living income benchmarks can also be used to measure the impact on participants in the supply chain.

Platforms and coalitions have the ability to truly push the needle on sustainable business solutions by both providing a space for sharing innovations and best practice, and also by providing resources or access to markets that enable those in their supply chains to thrive.

woman farmer

Impact management and measurement and selective inclusion criteria can minimize “greenwashing”.

Additional resources

 

 

Slider:  © Dinesh Khanna | Laudes Foundation (man wearing a turban), © GIZ/Gaël Gellé (cocoa farmer)

All other images: Unsplash

Alexandra Harris

Alexandra Harris is a writer, editor and communications specialist with a focus on sustainable private sector development. She previously worked for the International Finance Corporation and the Asia Foundation.

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Table of contents

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GRAPHIC SUMMARY

Learn more about sustainability commitments and new coalitions by reading this sixteenth edition of the online magazine on Inclusive Business! The illustration was developed by Christopher Malapitan, a visual practitioner and trainer based…

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Global shocks such as Covid-19 and climate change have demonstrated the need to transform current models of capitalism to be more inclusive, resilient and sustainable. Recently, new coalitions and platforms have emerged, with a focus on reimagining sustainable business through ambitious sustainability commitments and goals. In this issue of CLUED-iN, coalition leaders, researchers, multi-national companies and impact investors examine the value of platforms and new coalitions, delving into aspects ranging from the role of collaboration in developing just, sustainable value chains to the impact of new investor coalitions on scaling innovative business models.

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In this blog, Karoline Heitmann and Nicolas Malmendier of EVPA draw on their research to explain why companies are forming new coalitions with social investors to accelerate their shift towards more sustainable and inclusive business practices.

Time to transform: How WBCSD is advocating for reinventing capitalism

In collaboration with 40 companies, WBCSD recently launched Vision 2050, a framework including nine transformation pathways. Filippo Veglio of WBCSD explains why business action must be accelerated in a more systematic way to drive transformation.

Collaboration on living incomes is key to unlocking a sustainable future for cocoa

The cocoa industry relies on smallholder farmers, and their wellbeing depends on earning a living income. In his article, OLAM’s Andrew Brooks discusses the importance of collaborating with peers to develop living income benchmarks for all cocoa-producing countries.

SDG Impact Bonds: Funding the Global Goals through coalitions with inclusive businesses

Royston Braganza, CEO of Grameen Capital, illustrates how partnering with a coalition of entrepreneurs and outcome funders on targeted SDG bonds can scale the impact of inclusive business.

Driving impact in multistakeholder coalitions

Luciana Aguiar of BCtA explains how membership has become increasingly impact-driven and why impact measurement is critical for companies aiming to meet sustainable business goals.

Identifying transformative business models for the future of cotton

Charlene Collison of Forum for the Future discusses why we need new business models to become mainstream to address the unequal distribution of value across supply chains. She explains why this issue can’t be resolved through individual sustainability programmes alone.