"Business needs to show that we are part of the solution to the major issues of poverty and development" by Sir Mark Moody-Stuart
The Millennium Development Goals were the product of a moment of optimism in history. In setting some clear targets for reducing poverty and some related measures, the UN Secretary General and participating governments were hoping to capitalise on that moment and to inject some political will into their achievement. To date, the gamble has met with limited success. Whilst the MDGs have provided a focal point for benchmarking progress, the indications are that we will not realise them by the target date of 2015.
Some spectacular advances have been made, for example, in China but with disappointing progress in much of Africa. When the Goals were conceived the role of business in helping to achieve them was barely considered. Things began to change with the emphasis given to partnerships and to the role of enterprise at the World Summit on Sustainable Development in 2002. But development economics had hitherto been the last bastion of an essentially Statist frame of reference. Indeed some of the NGOs – although increasingly a minority - most active on development issues are still more inclined to see business as an enemy rather than ally.
Although the role of business in progressing the MDGs has long been a focus of the signatories of the UN Global Compact, the involvement of business in development issues was made more explicit by the MDG Call to Action launched last year by Gordon Brown and supported by twenty three company Chief Executives.
Most companies do not, however, benchmark their performance against the MDGs; since most of the Goals fall primarily to governments for their delivery. But the role of business is crucial in relation to those dealing with reducing poverty and hunger and the formation of partnerships for development. For individual companies, other specific goals – such as contributing to gender equality, improved education or the fight against HIV/AIDS – may also have resonance. For multinationals, the challenge is not only to contribute to poverty alleviation through running our businesses responsibly, generating jobs and paying our taxes, but also to increase our linkages back into our host economies and to maximise the impact of the capacities that we can bring to bear. This involves three key steps.
In relation to the first step, businesses are not development agencies but we can be significant development actors. However, we cannot maximise our beneficial impacts, and minimise any negative ones, if we don’t understand those impacts or the actual – rather than the assumed - needs of those around us.
Thus within Anglo American we have developed a Socio-Economic Assessment Toolbox (or SEAT process) which is implemented at our established mines at least every three years to provide regular stakeholder input. The process initially involves assembling key economic and environmental data about our impacts; the second stage involves structured stakeholder identification and consultation; the third stage involves a gap analysis between our internal processes and external perceptions and the development of management responses to the issues raised; and the fourth stage involves the identification of ongoing Key Performance Indicators. The process is completed by the publication of a report which sets out commitments to be delivered over the coming three years. The crucial aspect of the process is that it concentrates on improving the development impacts of our core business rather than on social investment.
The second step is for businesses to be prepared to step outside our comfort zone and to work with partners in government or civil society in tackling issues extraneous to our direct business impacts. Examples of this approach include the Extractive Industries Transparency Initiative; the Investment Climate Facility for Africa; the Global Business Coalition on HIV/AIDS; and national level partnerships directed at ends such as improving education; building healthcare capacity; or reforming customs processes.
Finally, a consistent issue in trying to ensure that multinationals can deliver better development impacts relates to our internal capacities. Experience shows that it is often difficult to deliver such partnerships and approaches in-country because we simply do not have the right skills available or because we do not incentivise management to give them priority. The fundamental fact is that for most major companies we are more likely to protect our licence to operate and to be able to do good long-term business if we find ways to contribute to solving the biggest socio-economic challenges facing our host countries.
I certainly believe in examining the business case for an involvement in wider development objectives. We need to remain vigilant against the core accountabilities of governments being shuffled onto private sector shoulders. But if we are to retain public confidence in market based economic systems, business needs to show that we are part of the solution to the major issues of poverty and development. Contributing to making up the deficit in the achievement of the MDGs is a crucial part of this agenda.
Sir Mark Moody-Stuart is Chairman of Anglo American
Some spectacular advances have been made, for example, in China but with disappointing progress in much of Africa. When the Goals were conceived the role of business in helping to achieve them was barely considered. Things began to change with the emphasis given to partnerships and to the role of enterprise at the World Summit on Sustainable Development in 2002. But development economics had hitherto been the last bastion of an essentially Statist frame of reference. Indeed some of the NGOs – although increasingly a minority - most active on development issues are still more inclined to see business as an enemy rather than ally.
Although the role of business in progressing the MDGs has long been a focus of the signatories of the UN Global Compact, the involvement of business in development issues was made more explicit by the MDG Call to Action launched last year by Gordon Brown and supported by twenty three company Chief Executives.
Most companies do not, however, benchmark their performance against the MDGs; since most of the Goals fall primarily to governments for their delivery. But the role of business is crucial in relation to those dealing with reducing poverty and hunger and the formation of partnerships for development. For individual companies, other specific goals – such as contributing to gender equality, improved education or the fight against HIV/AIDS – may also have resonance. For multinationals, the challenge is not only to contribute to poverty alleviation through running our businesses responsibly, generating jobs and paying our taxes, but also to increase our linkages back into our host economies and to maximise the impact of the capacities that we can bring to bear. This involves three key steps.
In relation to the first step, businesses are not development agencies but we can be significant development actors. However, we cannot maximise our beneficial impacts, and minimise any negative ones, if we don’t understand those impacts or the actual – rather than the assumed - needs of those around us.
Thus within Anglo American we have developed a Socio-Economic Assessment Toolbox (or SEAT process) which is implemented at our established mines at least every three years to provide regular stakeholder input. The process initially involves assembling key economic and environmental data about our impacts; the second stage involves structured stakeholder identification and consultation; the third stage involves a gap analysis between our internal processes and external perceptions and the development of management responses to the issues raised; and the fourth stage involves the identification of ongoing Key Performance Indicators. The process is completed by the publication of a report which sets out commitments to be delivered over the coming three years. The crucial aspect of the process is that it concentrates on improving the development impacts of our core business rather than on social investment.
The second step is for businesses to be prepared to step outside our comfort zone and to work with partners in government or civil society in tackling issues extraneous to our direct business impacts. Examples of this approach include the Extractive Industries Transparency Initiative; the Investment Climate Facility for Africa; the Global Business Coalition on HIV/AIDS; and national level partnerships directed at ends such as improving education; building healthcare capacity; or reforming customs processes.
Finally, a consistent issue in trying to ensure that multinationals can deliver better development impacts relates to our internal capacities. Experience shows that it is often difficult to deliver such partnerships and approaches in-country because we simply do not have the right skills available or because we do not incentivise management to give them priority. The fundamental fact is that for most major companies we are more likely to protect our licence to operate and to be able to do good long-term business if we find ways to contribute to solving the biggest socio-economic challenges facing our host countries.
I certainly believe in examining the business case for an involvement in wider development objectives. We need to remain vigilant against the core accountabilities of governments being shuffled onto private sector shoulders. But if we are to retain public confidence in market based economic systems, business needs to show that we are part of the solution to the major issues of poverty and development. Contributing to making up the deficit in the achievement of the MDGs is a crucial part of this agenda.
Sir Mark Moody-Stuart is Chairman of Anglo American
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BAA MDGs report WEB.pdf, 1.3 MB
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