Keynote Speech: League of Corporate Foundations Corporate Social Responsibility Expo 2015Jul 1, 2015
By Titon Mitra
Thank you very much for the opportunity to make this keynote address.
The theme that you have chosen – to collaborate, sustain and revolutionize to secure inclusive development - is indeed very opportune.
This year is in many ways a formative year for global development.
Not only will member states arrive at hopefully a landmark agreement on Climate Change, contend with the challenge of financing the development agenda globally, but also in September, UN Member States will adopt a new sustainable development agenda that will guide global development priorities for the next fifteen years.
A major milestone was achieved last July when the General Assembly’s Open Working Group on Sustainable Development Goals, consisting of representatives from seventy Member States, developed a proposal for a set of seventeen goals.
An unprecedented consultative process informed this proposal. Led by the UN development system, it gathered the views of over seven million people through national and thematic consultations and the MY World online survey.
The voices from the Philippines were an integral element of this process.
This was participatory planning and prioritization taken to a global level.
The proposed SDGs are much more ambitious and bolder than the MDGs.
In addition to tackling ongoing major development priorities, including the eradication of poverty, hunger, and gender inequality, new elements have been proposed.
The proposed agenda will be expanded to address income inequality, and the need for peaceful and inclusive societies.
It will also target problems that have emerged, or have become more pronounced, over recent years, such as climate change as well as those factors leading to accelerated environmental degradation.
The new development agenda will be a universal one which advocates that countries at all income levels make the transformations to their economies and societies which will ensure that development and prosperity occur.
The new agenda is, at its core, about ensuring that human development is both sustainable and inclusive.
In September, the Philippines – not just as a government, but also as a nation - will sign on – effectively committing to the targets and to report on progress.
The challenges to delivering the new agenda will by no means be inconsequential.
While considerable progress has been made on the MDGs and social and economic development more broadly over the last 15 years, there is much still do.
The Philippines is still lagging behind on poverty; completion of elementary education; women’s political participation; boys participation in elementary and secondary education relative to girls participation; maternal mortality; access to reproductive health; and HIV/AIDS infections.
Meeting these targets have been challenged by slow progress in achieving inclusive growth; urban and rural disparities; at times conflicting and overlapping policies; weak implementation and monitoring at the local level; data constraints; and the impact of man-made and natural shocks.
This is the unfinished MDG agenda and the persistent challenges to implementation, to which we will soon have to add the new Sustainable Development Goals and targets – underlining how complex the task ahead will be.
I am sure a number of you have read William Easterly, a development economist at New York University. He is one of the profession’s most determined skeptics.
Setting global goals that nobody is truly accountable for achieving, he says, not only misrepresents what causes poverty but also substitutes goal-setting for real action.
While I am a fan of his writings, in this case I do not agree. I rather subscribe to what John F. Kennedy said some 50 years ago: “By defining our goal more clearly, by making it seem more manageable and less remote, we can help all people to see it, to draw hope from it and to move irresistibly towards it.”
This is both the challenge and opportunity for the Philippines as we approach the era of the SDGs.
The private sector can play a critical role in working with the current government and advocating to the incoming government, to focus on what really matters and ‘land’ the SDG agenda. That is, calibrate the global agenda to the national context.
If we are serious about inclusive development, we need to identify the priority policies and investments – both public and private – that will make the difference.
The Private sector is also uniquely positioned to create peer pressure. One of the strengths of the MDG process was that political leaders were publicly and privately questioned on the steps they were taking to end extreme poverty.
The private sector is hugely influential and you can hold the feet of government to the fire so to speak.
But perhaps most critically – and consistent with one of the themes of today – collaboration - you can help catalyse into action what Jeffrey Sachs calls epistemic communities – networks of expertise, knowledge, and practice – around the SDG targets.
The bold goals set, will require communities of knowledge and practice to come together to recommend practical pathways to achieve results.
It will require mobilising stakeholder networks.
Community leaders, politicians, government ministries, the scientific community, leading nongovernmental organizations, religious groups, international organizations, donor organizations, and foundations can be motivated to come together for a common purpose.
That kind of multi-stakeholder process with active private sector participation – and even leadership - is essential for tackling the complex challenges of sustainable and inclusive development.
You have done this before.
The Philippine Business for Social Progress led the formulation of the Philippines MDG Framework for Business Action through a series of consultations with business executives and leaders of corporate foundations, corporate officers, government partners and the donor community.
The Framework outlined how the business sector could help attain the MDGs through core business, social investment and policy advocacy in the areas of poverty, health, education and environment.
This mobilised around PhP2.5 billion in corporate investments from 2005-2010 for the implementation of MDG initiatives.
The time for a new Framework for Business Action focused on delivering on the SDGs is near and perhaps this event can be the catalyst for the new Framework.
Private Sector Corporate Social Responsibility projects or programs could also be a significant complement to the efforts to achieve the SDGs.
These CSR projects are certainly making an impact.
The challenge however for the private sector will be to move towards scale and inclusive and sustainable business models - thus going beyond the concept of project based philanthropy and voluntary corporate social responsibility.
I stand to be corrected but from what I can ascertain, the vast bulk of CSR in the Philippines falls in the category of traditional philanthropy.
Companies deliver a CSR programme usually made up of small scale projects, often seen as charity, which is separated from their core operations.
In other words, the core business focuses on maximizing shareholder value, while the CSR programme addresses specific CSR issues and targets stakeholders – often at a scale that can only benefit the specifcally targetted communities and with limited impact.
Is it possible to go beyond traditional philanthropy and CSR models?
Let me ask you as the Corporate entities in the Philippines to look again at how you view your core business and approaches to social investment.
While I think still not widespread, some companies in the Philippines are fully integrating CSR in core operations and value chains so as to minimize negative impacts resulting from business activities on the society and the environment.Others are going a step further and are also exploring innovation ecosystems for inclusive business. Recent evidence suggests that inclusive business models can provide strong benefits to those living at the base of the economic pyramid.
PBSP held a financing forum to discuss how private commercial and government banks can support inclusive agribusiness efforts. The Board of Investments is working with the Asian Development Bank in designing inclusive business incentives.
With the understanding that inclusive business models can engage people at the Bottom of the Pyramid as consumers, producers and entrepreneurs, the Philippines is among the leading examples of how the private sector can support inclusive growth.
Yet the practice is still limited in the country.
There is also at the other end of the CSR spectrum an approach that is still in its infancy globally and which deserves serious consideration too.
This is impact investing.
While being present internationally for a number of years, it is still a relatively emerging hybrid of philanthropy and private equity that has the potential to be widespread.
And it certainly has considerable relevance to the Philippine context.
Because it goes beyond charity to fight poverty and destitution and in the same mould as inclusive business models, it enters the world of investments that are return-driven.
With this model, investors expect at least a return of their capital with an adjustment for inflation and, in many cases, a lot more than that.
This can be micro-lending but the trend is grander as in a number of countries the minimum investments are often around $1 million.
In many cases investors have a defined plan to sell their investments after a specific amount of time.
Most investors need to have a net worth of at least $10 million to participate in a meaningful way in impact investing.
Investors are motivated by doing good but they expect private equity like returns of close to 20 percent a year.
And like private equity, these investments are illiquid and can be risky.
Many of the people interested in impact investing appreciate the risk. They hope however to not only make a substantial return but also seek to advance social and environmental goals.
In 2014, J.P. Morgan and the Global Impact Investing Network studied 125 major fund managers, foundations, and development finance institutions and found $46 billion in sustainable investments under management - up nearly 20% from 2013.
Some estimate that the impact investment market could grow to $3 trillion.Can we establish a similar mechanism here in the Philippines that will take us into a new world of corporate social responsibility and provide both the financial and social return on investment?
And make a contribution to the SDGs.
Can we blend funding from government, donor, corporations and even private individual entities to capitalize this mechanism.
Let me leave you with that thought.
Ladies and Gentlemen,
The MDGs, drove progress in several important areas: income poverty; access to improved sources of water; primary school enrollment; and improved health services.
Yet the job is unfinished for millions of people—we need to go the last mile on ending hunger, achieving full gender equality, reducing maternal and child mortality, reducing HIV infection, getting and keeping every child into school, and protecting the environment.
And we must shift the world onto a sustainable path.
The SDGs must finish the job that the MDGs started, and leave no one behind.
To do this effectively will require the particular talents of the private sector.
Within businesses themselves, solutions lie in innovation, new business models, and the right leadership.
In 2002, Mark Malloch Brown, former UNDP Administrator, said that supporting the MDGs is good for business – because providing health services, nutrition, education, water, sanitation and so on will unleash poor people’s energies and encourage stronger societies and economies that can actively participate in the global economy.
These words ring true 13 years later.
The MDGs proved that global goals helped to galvanize a global effort in which the private sector was a critical player.
So let me challenge you to play a similar and stronger role in delivering against the SDGs.
I hope you can respond by coming up with the means by which you as the League of Corporate Foundations collaborate, sustain and revolutionize to help secure sustainable and inclusive development in the Philippines.