More international frameworks for sustainability are gravitating towards a multi-stakeholder approach.
This could help companies and governments to realize the “different economy” that must be at the center of our better future after COVID-19.
Balanced and open dialogues involving partners from the North and the South are critical to building sustainable global value chains that pursue measurable SDG impacts.
By Kalyanee Paranjape and Namit Agarwal
Speaking at the G20 Leaders’ Summit in late 2020, UN Secretary-General Antonio Guterres declared that “the recovery from COVID-19 crisis must lead to a different economy.” As the international community steps into the ‘Decade of Action,’ the Sustainable Development Goals (SDGs) have emerged as the accepted framework for businesses and investors to align themselves with the sustainable development agenda, collaborate with governments, and ultimately “build forward better” post-COVID-19.
The whole world has witnessed the severe challenges that the pandemic has created, as up to 100 million more people are pushed into extreme poverty and half of the global workforce has faced a 60% decline in their incomes. However, the pandemic has also opened new avenues for cooperation within and among businesses and between countries and stakeholders, in areas like greening economies, sustainable finance, digital economy, circular economy, and nature-based solutions. Traditionally, when partners from the Global North and Global South have collaborated on sustainability and the SDGs, the Northern partners have often set the agenda, led the discussion, and created implementation programmes, while the Southern partners have often been silent recipients or observers. Dialogues and consensus-building has been limited at best.
But emerging evidence shows that more international frameworks for sustainability are gravitating towards a multi-stakeholder approach. This could help companies and governments to realize the “different economy” that must be at the center of our better future after COVID-19.
Shifts in Global North-South Dynamics
Multi-stakeholder systems are helping to gradually reformulate North-South relationships. Southern actors have become more proactive in highlighting their expectations when collaborating with Northern partners, with a focus on specific impacts. Indian tea packers and exporters worked in partnership with government and civil society organizations to create an Indian tea sector sustainability initiative, Trustea. The platform I-SPOC brings together MNCs, Indian businesses, financial organizations and civil society to drive uptake of sustainable palm oil in India. Such processes help contextualize international sustainability standards and make these grounded in local realities.
Global value chains have traditionally relied on power imbalances, often placing workers in unacceptably vulnerable positions. The pandemic has provided supporting context for Southern partners’ requests, by exposing such power imbalances. For example, fashion brands were found to have cancelled orders or paid lower rates to suppliers, resulting in a staggering USD 5.8 billion in unpaid wages to garment sector workers .
Addressing systemic gaps on human rights, labor rights, climate, gender, and other areas is important if we are to achieve the SDGs by 2030. Part of the solution is for different actors to hold each other accountable. Gerbrand Haverkamp, Executive Director of the Netherlands-based World Benchmarking Alliance (WBA), believes that “accountability will be needed from private companies, governments, civil society, and these actors will also keep each other accountable.” To this end, WBA creates benchmarks to assess how the world’s most influential companies contribute and help in achieving the sustainable development goals and creates mechanisms to hold companies accountable and recognize the leading ones.
The Significance of Value Supply Chains
As national and international decision makers emphasize the urgency of progress towards the SDGs, multinational corporations along with their value chain partners need to lead the charge. Policy decisions and initiatives need to account for local wisdom and socio-cultural contexts in developing economies.
This begins with reimagining new and transformative Global North-South partnerships involving the business community, investors, and other stakeholders. This will involve redesigning how collaborations form and conceptions of what unusual alliances look like. Not just at the international and national level, collaboration and capacity building at the sub-national level, involving local government and SMEs, are crucial.
The landscape of decision-making in global value chains is undergoing change. There has been a gradual shift from compliance-driven engagement among suppliers and buyers, and investors and producers, gravitating instead towards collaboration on specific sustainability issues and challenges. Malawi Tea 2020 is one example of a collaborative project aimed at securing a living wage for agricultural workers. Greater and more balanced participation of the North and the South has been recognized as imperative. Some efforts are also being made to go beyond compliance and deeper into value chains – where the vulnerabilities lie, for example the work of the Responsible Mica Initiative deep in the mica value chains in India and Madagascar.
There is also an increasing trend to go beyond the transactional relations between buyers – suppliers, and to look through a systems lens into the entire ecosystem. Collaborative supply chain research in the agriculture and footwear sectors are examples of such efforts. Willingness on the part of global businesses to come together, pool their resources and find viable co-solutions are emerging, for example the Consumer Goods Forum and Business for Nature. However, these initiatives must engage and encourage national level players in the sourcing/host countries – thereby allowing for more voices and power to small, marginalized players. Initiatives such as the Roundtable on Sustainable Palm Oil (RSPO), the Accord on Fire and Building Safety in Bangladesh, and the Tamil Nadu Multi-Stakeholder Programme (TNMS) represent some of these approaches.
Meeting the Challenge of the Decade of Action
Initiatives that support collaborative action wherein suppliers/producers are part of both the design and implementation processes are still few and far in between. Multiplicity and proliferation of initiatives also remain a concern. Harmonization and alignment across various interventions will reduce redundancies and confusion among relevant stakeholders. Rijit Sengupta, CEO of the India-based Centre for Responsible Business (CRB) asserts that “balanced and open dialogues involving partners from the North and the South are critical to building sustainable global value chains that pursue measurable SDG impacts.”
Getting international business and buyers’ contribution to the Decade of Action right will encourage actors to support mutual accountability, invest in capacity building, share knowledge, and ultimately help get the world back on track with the SDGs.
The authors of this guest article are Kalyanee Paranjape, Program Officer, Centre for Responsible Business, and Namit Agarwal, Asia Policy Lead, World Benchmarking Alliance.