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.”
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.
Consumers are questioning where their products come from.
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.”
One sector that particularly stands out for innovation is the agriculture sector.
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.
Coalitions can improve living standards of smallholder farmers.
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.
It’s important that we showcase the diversity of business models within each SDG goal.
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.
Impact management and measurement and selective inclusion criteria can minimize “greenwashing”.
- "Sustainable business models for inclusive growth: Towards a conceptual foundation of inclusive business": This new research article by George C. Schoneveld offers revised definitions of Inclusive Business and inclusive business models.
- "Guiding steps towards living income in the supply chain": This toolkit guides companies on how to mainstream living income their business activities.
Slider: © Dinesh Khanna | Laudes Foundation (man wearing a turban), © GIZ/Gaël Gellé (cocoa farmer)
All other images: Unsplash
