The Evolving Role of Business in Society: Toward a Sustainable Development Consensus

Long gone are the days of living in silos. In an increasingly interconnected world, the boundaries between public, private, and social domains are dissolving.

Global megatrends in demography, geopolitics, technology, and climate are reshaping societal and economic dimensions. Alongside the opportunities that these shifts provide, from increasing citizens’ connectedness to their governments, to improved lifespans and health outcomes, these trends are also partially to blame for fears over migratory processes and confusion over technology's impact on jobs.

As indicated by the likes of Gallup, the World Economic Forum, and the Edelman Trust Barometer, these changing trends have coincided with a progressive deterioration of confidence in institutions. The trust crisis between business and society has been strikingly apparent since the 2008 Global Financial Crisis.

In the last year, the effects of these megatrends have been amplified by a synchronized global economic slowdown, which increased potential risks posed by policy mistakes, and, in turn, made global businesses more aware of their capacity and responsibility to shape our shared future.

To fill the void, businesses are rethinking their mandate and venturing into areas they have not been in before. For instance, this evolution may be traced through Larry Fink’s letters to CEOs, which consistently look for ways to combine purpose and profit, making capital “just.”

Action is anchored in healthy pragmatism, as many companies’ mid-term and long-term bottom lines are tied to a sustainable planet.

In 2015, the global community ushered in a new paradigm through the launch of the 2030 Agenda and the Sustainable Development Goals (SDGs). The lynchpin to support this ambitious global agenda is Financing for Development as embodied in the Addis Ababa Action Agenda which encouraged businesses to get involved. The Financing for Development agenda uses the SDGs as a lens through which the private sector can grasp both business opportunities and advance global sustainable development. Some modest successes have been seen since.

For example, companies like Microsoft have placed environmental goals at the heart of their business model. Linked to SDG 12 on responsible consumption and production, SDG 13 on climate, SDG 14 on water, and SDG 15 on biodiversity, Microsoft works to minimize pollution, reduce waste, and protect the planet.

Similarly, the World Bank Group seeks to engage new sets of investors in sustainable development through sustainable development bonds. A liquid and tradeable financial product, they work in the same way as any other bond in terms of credit and financial risk, while simultaneously catalyzing change by promoting sustainable investing approaches and social and environmental impact reporting.

As business leaders begin to assume a different role in the changing world order and look for ways to combine purpose with profit, the landscape is ripe for a system-level shift and to align public and private interests. The SDGs and Financing for Development provide an umbrella for a new consensus between all actors to take place to face megatrends and tackle the trust crisis head on, without business sacrificing profit.

One of the key challenges to the new consensus is establishing a structured dialogue between traditionally “public” and “private” domains that tend to speak different languages. So far, attempts to establish a global collaboration channel that would lead to concrete results and commitments have not been very successful, despite proclaimed (and, we believe, sincere), interest by both sides.

International organizations, like the United Nations and the World Bank, occupy a unique position as trusted, bilingual intermediaries with the convening power of both sides. Not least, because these organizations have adopted the SDGs as a guiding compass that the world needs to address challenges and take advantage of opportunities presented by existing and emerging megatrends.

UN and World Bank Group country-centered engagement models allow them to create a collaborative paradigm - country platforms - bringing together all development actors for maximum impact. The SDGs and the Financing for Development agenda provide a framework for the new Sustainable Development Consensus to grow.

As guiding frameworks go, change can only be actioned if all parties are at the table. The question is, are the boundaries blurred enough for businesses, institutions, and society to step out of their comfort zones and collectively grasp the new paradigm? Is the Sustainable Development Consensus now in sight?

Mahmoud Mohieldin is the World Bank Group Senior Vice President for the 2030 Development Agenda, UN Relations and Partnerships. Before joining the World Bank, Dr. Mohieldin held numerous senior positions in the Government of Egypt, including Minister of Investment from 2004 until 2010.

Svetlana Klimenko is a lead financial management specialist at the World Bank Group. As part of her work she leads dialogue and partnerships with global standard-setting bodies focused on such areas as financial reporting in both the private and public sector, integrated/sustainability reporting, and reporting on the SDGs, and is actively involved in the WBG dialogue with institutional investors focused on the sustainability agenda.