The Center for Sustainable Development at Brookings launched a publication exploring how the targeted pursuit of business profits can better support sustainable development. During the launch event, participants shared perspectives offering insights into how sustainability can be introduced into business practices, finance, and policymaking while expanding market opportunities and accelerating progress towards the SDGs.
Director of the Brookings Center for Sustainable Development John McArthur opened the discussion.
While for centuries, private enterprise has fostered prosperity, he said, market forces have also exacerbated humanity’s challenges and the planet’s stressors. Highlighting that the world is “at the intersection of capitalism and sustainable development,” McArthur called attention to the growing recognition that major priorities can only be achieved at scale if market forces are harnessed better, noting the need to incentivize and reward business for supporting sustainable development. He urged using the next five years of the 2030 Agenda to learn how we can shape post-2030 global goals, defined not only in financial terms but also in terms of benefit and progress. He emphasized the need to understand the right reasons and market incentives to develop market-viable solutions.
Introducing the book, McArthur said it is a product of a partnership between The Brookings Institution and the Japan International Cooperation Agency (JICA) Ogata Sadako Research Institute for Peace and Development. Titled, ‘For the World’s Profit: How Business Can Support Sustainable Development,’ the volume in the seventh in a series produced through this collaboration since 2011.
Miyahara Chie, Director General, JICA Ogata Sadako Research Institute for Peace and Development, said the book is the culmination of three years of “tremendous” effort by both institutions. She outlined JICA’s history, starting from the establishment of the Federation of Japan Overseas Associations in 1954, and described how the private sector helps advance global cooperation through implementing projects and advancing technology, among other roles. Drawing attention to the book’s focus on aligning with global priorities to scale the impact of business on societal outcomes embodied in the SDGs, Chie noted the opportunity to enhance the collective understanding of how to drive system change.
Homi Kharas, Senior Fellow, Global Economy and Development, Brookings Center for Sustainable Development, said what prompted the volume was the realization that the private sector wasn’t contributing to sustainable development at the scale and with the urgency needed. Kharas noted that this year, for the first time, there will be mandatory reporting on sustainability data by large companies in every major jurisdiction in the world, accompanied by mandatory disclosure and adoption and acceptance of assurance standards that will make the information disclosed verified and verifiable by an independent team. He said the book responds to the need for an ecosystem of actors that would make sure this “silent revolution in the corporate accounting world” has an impact.
Kharas said the book focuses on: business actors, including executive leaders, small businesses, corporate boards, and multisector alliances; financial actors, including asset owners, banks and infrastructure investors, and insurance providers; and policymakers and regulators, including standard setters, assurance providers, national policymakers, lobbyists, and national business communities – all with their distinct sets of interests and incentives. He outlined three big debates around “where we are and where we’re headed” on: value creation (for shareholders or for stakeholders more broadly); risk management (risk only to firms or for society as well); and accountability (mandatory coverage or keeping regulation as simple as possible).
A panel discussion was moderated by Jane Nelson, Non-resident Senior Fellow, Global Economy and Development, Brookings Center for Sustainable Development, who underscored the need to increase private sector engagement not only in terms of quantity but also quality. She said business can be more effective in creating value, identifying and mitigating risk to itself as well as to people and the environment, and enhancing comparability of corporate reporting and accountability.
Ndidi Okonkwo Nwuneli, President and CEO, ONE Campaign, emphasized that most businesses in the world are small and medium-sized enterprises (SMEs). Dominating in emerging markets, SMEs, she said, drive growth, innovation and creativity, and job creation, but often do not engage in designing for “the future we desire.” She stressed the need to:
- recognize the role small businesses can and do play in the transition to sustainability;
- foster partnerships among SMEs, given their limited capacities to engage with data for sustainability reporting;
- invest in innovation to transform businesses; and
- for SMEs to play a role in shaping policies so they are seen as engines of growth and are not left behind.
Tom Seidenstein, Chair, International Auditing and Assurance Standards Board, highlighted the importance of improving sustainability reporting so that companies can manage risk better and identify opportunities for value creation. While evidence suggests that companies that incorporate sustainability standards perform better, he said increased reporting can help better “prove it.” Seidenstein cited the availability of data and the immaturity of governance and reporting systems as challenges. Noting that “we want to get sustainability reporting to the level of financial reporting,” he warned that “Rome was not built in a day” and “perfect cannot be the enemy of the good.” “Let’s see what good can be expected along this maturity curve,” he suggested.
Koji Makino, Visiting Fellow, JICA Ogata Sadako Research Institute for Peace and Development, spoke about the role of government in creating an ecosystem for sustainable development. He described the case of Japan, where the government used a combination of top-down and bottom-up approaches to build such an ecosystem in three years’ time. Efforts included the introduction of SDG-focused educational guidelines in schools and a SME-focused certification system. Alongside national efforts, Makino highlighted the role of multilateral and bilateral official development assistance (ODA) in building whole-of-society ecosystems for sustainable development in developing countries.
Responding to questions from the audience, panelists highlighted the importance of:
- catalytic financing for business growth;
- high-quality reporting, which can help create trust in the system and generate, rather than discourage, capital flows; and
- building conditions through public investment that allow all entrepreneurs to thrive.
They also discussed: educating the next generation of leaders, including through peer mentoring and engagement; markets and sustainable development outcomes coming together; and the need for ambitious and courageous leadership from policymakers, businesses, and financial institutions in terms of vision as well as practical steps.
Themed, ‘Profit and Purpose: Aligning Business for a Sustainable Future,’ the launch event took place in Washington, D.C., US, on 10 January 2025, with opportunities to follow the webcast in real time. [Publication: For the World’s Profit: How Business Can Support Sustainable Development] [Publication Landing Page] [SDG Knowledge Hub Sources]