Business Models Must Change, Deputy Secretary-General Tells Private Sector Event, Urging Shift from Short-Term Considerations to Delivering Long-Term Value

Following are UN Deputy Secretary-General Amina Mohammed’s remarks at the private sector breakfast, in Johannesburg today:

It is a pleasure to be with you all today. As part of our conversations, I was asked to reflect on the theme of business and the Sustainable Development Goals (SDGs).

In September 2015, all 193 Member States of the United Nations adopted the 2030 Agenda for Sustainable Development. This is a blueprint for achieving a better future for all; a plan to end extreme poverty, fight inequality and injustice, and protect the planet, ensuring that no one is left behind.

The business community is a core development actor with the potential to help bridge the development divide. This is recognized in the 2030 Agenda, the Addis Ababa Action Agenda, the Paris Agreement on climate change and the African Union Agenda 2063.

Together they provide a clear roadmap of where we need to go and how to get there. Central to their vision is that no single nation or sector can address these challenges in isolation. We all need to pull together. The United Nations is proud to be working closely with the African Union on this journey.

These ambitious agendas are a powerful framework for economic transformation. In Africa, this is particularly important given the social, economic and environmental challenges we face. These range from climate change to poverty, from hunger to youth unemployment and illiteracy, from political instability and corruption to violence, terrorism and civil wars.

But these challenges are only part of Africa’s narrative. This is a continent of massive opportunity, from its vast resource wealth to its vibrant population of young people working to build on the continent’s positive developments in democratic and corporate governance. But, to capitalize on this opportunity and promote the equitable and inclusive progress the 2030 Agenda envisages, business models will have to change. We all need to shift perspective from narrow short-term considerations, to strategically focusing on delivering long-term value.

Many African businesses are already taking action to drive progress across the region, demonstrating the potential of inclusive business practices. For example, a South African financial services company is working in collaboration with the South African Human Rights Commission and the African Institute of Corporate Citizenship to sponsor the development of the Human Rights in Business Project. This will develop a customized human rights compliance assessment tool for the country.

Another South African-based multinational retail company is working with the Pacific Institute and WWF South Africa on a water stewardship project in the Western Cape Province to improve water efficiency. The company is also rising to the climate challenge by setting ambitious science-based targets on their emissions and participating in the CEO Water Mandate to address water challenges throughout their supply chain. These examples demonstrate commitment to moving beyond business-as-usual approaches. This will be critical for achieving the Sustainable Development Goals.

So, too, will breakthrough innovation and new technologies. These present a significant investment opportunity for sustainable, inclusive business that benefits the maximum number of people. The vast majority of Africa’s businesses are small, medium or micro-enterprises whose activities benefit large numbers of people. Yet, too many fall outside the formal economy. By engaging businesses of all sizes, companies can make great strides in bringing more entrepreneurs from the informal economy into the formal, domestic job market to drive growth.

The newly emerging African Continental Free Trade Area has significant potential to unlock markets and promote economic growth throughout the continent by promoting a shift from exporting raw material to manufacturing and developing finished products. To capitalize on this opportunity, companies are increasingly seeing the importance of investing in research and development and enhancing the skill sets of the workers.

And in that context, I cannot emphasize enough the importance of empowering our youth � especially young women. With 200 million people aged 15 to 24, Africa has the largest population of young people in the world. The continent needs to seize this demographic dividend. But today, youth accounts for 60 per cent of all Africa’s jobless. And, as they say, idle hands do the devil’s work.

Young people need employment and income opportunities to help build their nations and provide them with dignity and purpose. That is why it is essential that Governments and business work together to equip youth with the right tools and skillsets for the jobs of the future. Investing in education is a first step, and a significant opportunity for the private sector, since companies have a clear interest in ensuring access to skilled labour across their operations.

Another area where business can play a critical role in sustainable development is addressing corruption and the illicit financial flows that continue to deprive many African nations of critical resources needed to build and maintain healthy communities and markets. It is essential to strengthen transparency and root out corruption in all sectors. This requires the involvement of political leaders, business leaders, unions and other actors � supported wherever possible by international organizations like the United Nations or continental bodies like the African Union.

I also encourage you to invest in women. The gender pay gap in sub-Saharan Africa remains a significant barrier to sustainable development, with women earning, on average, 32.4 per cent less than men. Supporting female entrepreneurs in accessing credit and in building businesses, as well as ensuring all women have access to banking services and can exercise control over their own finances is critical. The dividends of women’s financial empowerment are far-reaching and benefit entire families, communities and markets overall.

In conclusion, let me reiterate that one of the most powerful contributions business can make to the 2030 Agenda and the African Union Agenda 2063 is a commitment to ethical, responsible business practices. The UN flagship for responsible business is the United Nations Global Compact. I want to thank those business leaders who are already active participants in the Compact, and I invite those companies who have yet to engage with the Global Compact to join this important initiative.

Here in South Africa, and elsewhere across the continent, Global Compact local networks offer an important platform for companies from all sectors to work together in advocating for strong policies to support sustainable business. Currently, nine Global Compact local networks in the region work with more than 800 companies and other key stakeholders across Africa in their efforts to align their strategies and operations with the SDGs and the Ten Principles of the United Nations Global Compact.

These networks � in connection with United Nations country teams � play an essential role in mobilizing business to fight corruption, contribute to national SDG Action Plans and policies, and support initiatives that promote peace and stability. To truly make the Global Goals local business means embracing the SDGs as a business priority, committing to do business responsibly, and transforming business models to incorporate long-term thinking.

I have no doubt that with your help we can create sustainable growth and unlock countless new opportunities, ultimately contributing to more equitable, safe and prosperous economies across Africa. Thank you.

Source: United Nations