SDG Partnerships with the Private Sector

01 Nov 2017 - 09:45
Source: Wikimedia Commons

Three Dilemmas for Foreign Ministries (and how they could be solved)

Ambitious Sustainable Development Goals (SDGs) and targets ask for multi-stakeholder solutions, but more often than not national governments and businesses are worlds apart. How to overcome these differences?

The public-private partnerships (PPPs) necessary to reach the targets of the UN’s 2030 Agenda require better mutual understanding between national governments and the private sector. This is a specific challenge for ministries of Foreign Affairs.

While PPPs have been on the rise since the early 2000s, the new ‘SDG partnerships’ ask for universal solutions instead of mere North-South transfer of aid and technology. The SDGs cannot be reached without (parallel) domestic action and policy in wealthier countries. These processes need to be streamlined and ministries of Foreign Affairs are best placed to build these bridges. Seeing the evolution from state-to-state diplomacy towards multi-stakeholder diplomacy, the SDGs are a particularly relevant test case for new forms of diplomacy.

The ambitions of the SDGs are steep. Even in a country such as Sweden more than 75 per cent of the non-development cooperation targets require ‘considerable work’. Partnerships are therefore necessary; identification of criteria for partnerships will facilitate their creation and help to monitor their contributions. The suggested indicator to measure effectiveness of these SDGs partnerships only in ‘amount of US dollars committed’ is insufficient and do no justice to CEOs such as Paul Polman (Unilever) and Jack Ma (Ali Baba) that step up as SDG advocates.

We have looked into this innovative field of practice and asked the question how governments, specifically ministries for Foreign Affairs, should adapt to this situation. The literature on partnerships leads us to conclude that we needed private sector involvement and policy recommendations based on current practice. In addition, we conducted an online consultation with selected experts in the United States, China, Germany, Italy and Brazil, which gave us a broader view. We received feedback from practitioners and businesses on policy recommendations throughout our research and during a multi-stakeholder seminar.

We find that foreign ministries have not yet sufficiently adapted to the new requirements for implementing the 2030 Agenda. It is time for diplomats to invest in relations with the business community beyond the traditional PPPs. In addition, we identify three policy challenges for governments in their SDG-related dealings with the private sector, and suggest how they could be resolved.

First, it is clear that time is a much scarcer resource for business than for government. Time-consuming consultations on governance structures could be avoided by using a light, pragmatic touch in governance structures.

Second, the new multi-stakeholder partnerships ask for ‘shared responsibility’ in horizontal networks instead of the hierarchies more familiar to government bureaucracies. Knowledge capacity and action capacity count more than status. Government network partners do not share diplomatic behavioral norms. Foreign ministries therefore need to invest more in these interface cultures by using part of their traditional strength of relationship management, dialogic competences and knowledge sharing.

Third, SDGs are about long-term objectives and governments need to become aware of the business perspective on strategic action: corporations use scenario planning, but they are also lobby organizations geared towards profit making, which the Volkswagen emission scandal makes clear. Long-term sustainability objectives could go hand in hand with short-term commercial objectives. It is crucial for MFAs to understand that businesses are only interested in partnerships when they have commercialization potential. In (Asian) countries with a closer nexus between government and business, this principle has been embraced across the public-private divide.

While having unrelated and often contrasting professional cultures, governmental policy dilemmas for SDG partnerships could be solved by investing more in the relationship with business. This is no guarantee for success but a minimum requirement, and with much wider application. Networking has become the conceptual basis of diplomacy and collaboration with non-governmental players will progressively become the ‘new normal’.

This opinion was originally published on IISD - SDG Knowledge Hub.