13 July 2018: A side event convened by the Permanent Missions of Germany and Uruguay to the UN and partners in the margins of the High-level Political Forum on Sustainable Development (HLPF), focused on the theme, ‘Partnership or Business Case? Private Sector and the SDGs,’ and discussed whether the privatization of public goods and services is contributing to better SDG implementation.

Questions for discussion focused on private sector activities and strategies vis-à-vis the SDGs, whether the Goals positively affect business models, and what recommendations can best inform the private sector, governments and civil society organizations with regard to sustainable development.

Opening the event, Anna Cavazzini, Bread for the World, highlighted the growing interest in business engagement in the SDGs, in part due to reports that highlight the need to mobilize the “trillions” of dollars in finance for sustainable development. She noted that although four in ten of the world’s largest 250 companies already include SDGs in their corporate reporting, regulation is still necessary to create a level playing field and to ensure that externalities are internalized. Cavazzini also underscored the importance of changing core business strategies, and the need for tax system reform to collect more funds from companies.

By creating bundles of projects, SDG bonds and green bonds make it possible for large financial actors to invest.

The event featured remarks by Wolfgang Obenland, Global Policy Forum, who presented findings from a case study on the SDGs and the finance sector, featured in a joint paper launched in July 2018. While the “flavor of the day,” he said, is that we need more money, as articulated at the HLPF, Financing for Development (FfD) discussions in April 2018, and in what capitals are saying, he emphasized that there is US$40 trillion available to invest in big projects. One instrument for doing so, he highlighted, is SDG bonds and green bonds, each in their nascent stages. As established financial instruments, these bonds are special in that they come with earmarking, increased oversight by third party observers, and have been created specifically to make it possible for institutional investors to invest in sustainable projects. Obenland lamented that pension funds and other major pools of finance have not previously been able to engage because the projects are either too small or do not have a high enough or stable enough rate of return. By creating bundles of projects, these bonds make it possible for large financial actors to invest.

One issue, Obenland noted, is that a standardized definition of what constitutes a “green” or “SDG” bond is lacking. He offered examples of principles being developed by actors such as the International Capital Market Association (ICMA) and HSBC, but cautioned that there are still significant questions around environmental, social and economic inequality across borders, and lock-in effects for infrastructure. He closed by identifying sources of finance that could be redirected towards the SDGs through policy reform. These include, among other sources, weapons/defense spending, illicit financial flows, and fossil fuel subsidies.

Moderated by Marie-Luise Abshagen, German NGO Forum on Environment and Development, the ensuing panel discussion touched on why the SDGs are important to companies, and whether they have engaged on their own or required a push from civil society. Speakers addressed the concept of public-private partnerships (PPPs), and fostering more positive behavior to address human rights issues.

Panelists noted that as an international agenda, the SDGs are valid to everyone, and that all SDGs need to be considered together in a longer-term approach than businesses may be used to taking. Larger companies, discussants emphasized, have participated in the SDG agenda-setting process since before the Goals’ adoption. However, as noted by Laura Scheider, econsense, taking up the Goals and fostering dialogue with civil society to push further is harder for small and medium-sized enterprises (SMEs).

Shanta Lall Mulmi, Resource Centre for Primary Health Care (RECPHEC) noted that PPPs need to put people at the center. With regard to these partnerships and models where the private sector delivers services, Sandra Vermuyten, Major Group of Workers and Trade Unions, voiced concerns in terms of equity, accessibility, prices, and the difficulty of adapting long-term contracts such that they further improve situations on the ground. She flagged evidence in the public health, education and transportation sectors, as well as in the prison industry and refugee centers, where privatization led to reduced service provision or outcomes.

The event was organized it partnership with German NGO Forum on Environment and Development, Bread for the World, Global Policy Forum and others. [Partnership or Business Case? Private Sector and the SDGs]