An interview with Global Compact’s Jaime García Alba on the Sustainable Development Goals
In the coming days, world leaders from 193 countries will descend upon Addis Ababa, Ethiopia, for the Financing for Development Conference organized by the United Nations (UN). The goal will be to define a framework to implement the Sustainable Development Goals (SDGs) over the next 15 years. The private sector will play a key role, integrating business perspectives throughout the process.
With more than 8,000 global companies, including 2,700 from the region, signing the Global Compact, we see the private sector’s growing commitment to sustainable development. I recently spoke with Jaime Garcia Alba, Head of Sustainability Reporting at the Global Compact, about the private sector’s role in the SDGs. Below are highlights of our conversation:
What exactly are the UN’s Sustainable Development Goals (SDGs)?
Formalized at the Summit of Rio+20 in 2012, the SDGs seek to go beyond the Millennium Development Goals, which are based primarily on poverty reduction and social issues. The SDGs cover a broader vision of sustainable development, including aspects of economic development and environmental sustainability, and rely largely on private sector activity. For this reason, companies and investors are deeply engaged through the Global Compact, the main initiative of the UN to interact with the private sector and promote corporate sustainability
Why corporate sustainability?
Companies realize that their ability to thrive and grow depends on the existence of a sustainable society. While governments play a role creating incentives and developing regulatory frameworks conducive to sustainable development, it is also necessary to change the behavior of firms as well. This change in behavior however cannot be regulated solely through public policy. This change is most effective when it takes place from within the firms themselves, and this is corporate sustainability.
The Forum for Sustainable and Responsible Investment published a report concluding that portfolios with sustainable assets in the US grew 76% in two years. How do you see the progress of Latin America and the Caribbean in terms of sustainable assets?
This is a global trend. The Principles for Responsible Investment reflect the efforts of institutional investors to incorporate sustainability considerations into their investments, and has many members in Latin America and the Caribbean. In our region, we also have several stock exchanges that are part of the Sustainable Stock Exchange. Recently in Colombia the Latin American Sustainable Investment Forum was launched. Institutional investors and investment banks have demonstrated much interest in the topic in the region.
Given high levels of funding required to achieve sustainable development, what is the value added of the private sector? And in what industries can it maximize its impact?
There are different estimates of the necessary investment. According to the 2014 World Investment Report of UNCTAD, an incremental investment of US$ 2.5 trillion per year in developing countries will be necessary. Overseas development assistance provides approximately US$150 billion annually. To reach US$2.5 trillion, we must mobilize a huge amount of private investment, especially in industries such as transport, energy, telecommunications and agriculture. This report details investment needs by industry.
The Conference on Financing for Development and the COP21 in Paris in December 2015 could play a defining role in the future of sustainable development. At these events, the world hopes to reach agreements that include tangible and impactful actions. Development finance institutions, such as the IDB, aim to work with the private sector both selectively and systemically. Together we can foster the enabling environments, sustainable corporate practices and financing structures to soon make these goals a reality. Stay tuned….
Jaime Garcia Alba is the head of Reporting and Finance at the UN Global Compact. He coordinates the Communication on Progress disclosure initiative, which serves as the UN Global Compact’s main integrity measure as well as a tool to advance transparency and accountability, mobilize sustainable investment, and drive corporate performance through improved reporting. He is also involved in the promotion of business engagement in the UN’s Post 2015 agenda and is the UN Global Compact focal point for foundations.
Prior to joining the UN Global Compact, Jaime worked at the Inter-American Development Bank (IDB), where he helped develop the IDB’s sustainability action plan and the Bank’s efforts to increase the strategic focus and development impact of its private sector activities. His earlier career spanned technology and management consulting, international development project management, and start-ups. Jaime attended ICAI University, Madrid, and Ecole Centrale de Paris, where he received a dual degree in Industrial and Electrical Engineering. He received an MS in Industrial Engineering and a graduate degree in Management of Technology from the University of California, Berkeley.