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Businesses and the Sustainable Development Goals (SDGs)

Businesses and the Sustainable Development Goals (SDGs)

The Sustainable Development Goals (SDGs) are universal goals set forth in the 2030 Agenda for Sustainable Development (“2030 Agenda”), adopted at the United Nations Summit in September 2015.

The Preamble of the 2030 Agenda states the pledge to “Leave no one behind” and calls for action by all to achieve a sustainable and inclusive society.

SDGs consist of 17 Goals, 169 Targets, and 232 Indicators.

SDGs by the United Nations.

In general, many people may have a strong image of the logo of the 17 Goals of the SDGs, but I would like you to read and understand Preamble in which the philosophy of the SDGs is enshrined.

Preamble describes what all the SDG goals are about.

Preamble also outlines the 5 P’s that we must take care of. They are People, Prosperity, Planet, Peace, and Partnership. Preamble also states that SDGs “harmonize the three dimensions of sustainable development: economic, social, and environmental. SDGs first describe the principles and philosophy, and then detail specific indicators for action.

Looking at the business world, the importance of harmonizing the above-mentioned economic, social, and environmental aspects has been increasingly emphasized in recent years.

According to the Business and Sustainable Development Commission, achieving the SDGs opens up some USD 12 trillion of market opportunities in the four economic systems examined by the Commission. These are food and agriculture, cities, energy and materials, and health and well-being. They represent around 60% of the real economy and are critical to delivering the SDGs.

The total economic cost (and business potential) of implementing the SDGs could be 2-3 times bigger, if the benefits are captured across the whole economy and accompanied by much higher labour and resource productivity.

In business activities, both economic and social values are required. And the times are beginning to demand “good business,” in which business itself contributes to society, rather than just giving back to society the profits earned by the company. The demand of the times is not “to be successful and then do good things”, but “to be successful by doing good things”.

Reaching the SDGs will require a step-change in both public and private investments. Public sector funding capabilities alone may be insufficient to meet demands across all SDG-related sectors. Today, however, private sector investment in these sectors remains relatively low.

Only a fraction of the globally invested assets of banks, pension funds, insurers, foundations and endowments, as well as transnational corporations, is directly targeting SDG sectors. This figure is even lower in developing countries and particularly the poorest ones.

At the global level, total investment needs are in the order of USD 5 to 7 trillion per year. Developing countries alone are expected to need investments totalling some USD 3.9 trillion per year, mainly for basic infrastructure (roads, rail and ports, power stations, water and sanitation); food security (agriculture and rural development); climate change mitigation and adaptation; and health and education.

Current investment levels in these sectors stand at around USD 1.4 trillion leaving a gap of around USSD 2.5 trillion and implying an annual investment gap of between USD 1.9 and USD 3.1 trillion (UNCTAD). If just some of this investment gap is filled, the opportunities for business to deliver services and solutions will grow manifold.

Today, more and more entrepreneurs around the world are working on startups that solve many social problems. It is a very good trend, but I sometimes feel that there is room for improvement in the way of entrepreneurship and business thinking.

In many cases, businesses that pursue ideas do not succeed. This is because the desire to make our ideas work comes before the needs of society, and we cannot calmly judge the balance of supply and demand in the market.

According to statistics, the number one reason for start-up failure is “there was no demand in the market”.

Social problem-solving thinking and social problem-solving businesses are businesses that use the power of business to solve social problems for which there is no supply, or not enough supply, even though there is enough demand that society needs solutions right now. And since social problems are not temporary and transient fads, but rather structural social problems, business can be sustainable.

In order to start social problem-solving business, you must understand the importance of business and social problems, and be able to envision a future with a dream. At the same time, you must have well thought ideas and make specific action plans, and be able to take first steps in reality.

In conclusion, social entrepreneurs are required to both envision a future with a dream and take first steps in reality.

From the next issue onward, I would like to introduce some examples of social problem-solving businesses or SDGs businesses, as they are called.

Ikuo Kawauchi

Ikuo Kawauchi is the International Analyst & Business Expert at Tatvita Analysts. He is an Advisor to Pimpri Chinchwad University, and Indo-japan Business Council (IJBC). He has graduated from Keio University Economics Department and got a Master's degree in International Corporation Studies at Kibi International University Graduation School of International Corporation and Development. He had been working for a Japanese manufacturing company for over 30 years and worked in the field of business strategy, business planning and new business, overseas business development and marketing research. He has a great deal of knowledge in all areas of industry and experience in business activities. Especially he went to India dozens of times and has more than a thousand connections in a broad range of fields in India.

His current activities have 5 pillars, i.e.,

1. Business consulting, mainly Japan-India relations,

2. SDGs (Sustainable Development Goals) Advisor & Lecturer,

3. Startup Entrepreneur Mentor & Advisor,

4. Japan’s Regional Revitalization Advisor and

5. Academic activities.

His current affiliation includes CEO; Asia-Africa Institute LLC, Founding Board Member, Japan India Sustainable Business Initiatives (JISBI); Managing Director NPO India Japan Friendship Center, Japan; Advisor, BDB India Private Limited; Expat Orbit LLC.  Representative of Japan Desk; International Advisor, NGO Sewa Foundation; Member of the SDGs for Regional Revitalization Public-Private Partnership Platform, the Cabinet Office of Japan; Public Private Partnership Disaster Prevention DX Promotion Council, Digital Agency, Cabinet of Japan; The Japan Society For International Development(JASID); The Japanese Association for South Asian Studies(JASAS); Japan Association for Asian Studies(JAAS); The International House of Japan; and The Japan-India Association.

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