Aliging Profit with Purpose - Global Goals Yearbook 2019

What are companies for? The rules for companies have changed. The focus is increasingly on their sustainable, social, and ecological impacts. The strategic orientation toward the so-called corporate purpose is decisive for profitable growth in the future. This currently results in a large number of questions for businesses: How do you find an inspiring and future-oriented corporate purpose, and how can it be aligned in such a way that it brings profitable growth and social responsibility in concert? The new 2019 edition of the Global Goals Yearbook offers answers to these crucial questions thanks to its consistent orientation toward the UN Sustainable Development Goals and a competent editorial board and author pool.

What are companies for? The rules for companies have changed. The focus is increasingly on their sustainable, social, and ecological impacts. The strategic orientation toward the so-called corporate purpose is decisive for profitable growth in the future.
This currently results in a large number of questions for businesses: How do you find an inspiring and future-oriented corporate purpose, and how can it be aligned in such a way that it brings profitable growth and social responsibility in concert? The new 2019 edition of the Global Goals Yearbook offers answers to these crucial questions thanks to its consistent orientation toward the UN Sustainable Development Goals and a competent editorial board and author pool.


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<strong>2019</strong><br />

Aligning<br />

<strong>Profit</strong> <strong>with</strong><br />


This publication is kindly supported by:<br />

Arab African International Bank<br />

Audi<br />

BASF<br />

Bayer<br />

Beaulieu International Group<br />

Bergen Plastics<br />

Bosch<br />

Cargolux<br />

Casinos Austria and Austrian Lotteries Group<br />

CEMEX<br />

Deloitte<br />

Deutsche Telekom<br />

EDF Group<br />

Elsewedy Electric / Iskraemeco<br />

Green Delta Insurance<br />

ING<br />

iPoint-systems<br />


MAN<br />

Manila Doctors Hospital<br />

Mazars<br />

MediaMarktSaturn<br />

Merck<br />

METRO<br />

Moelven<br />

Nomura<br />

Olam International<br />

Pernod Ricard<br />

Philia Earth<br />

Philip Morris International<br />

PUMA<br />

Sakhalin Energy<br />

Symrise<br />

The University of Manchester<br />

The <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> is a product of macondo publishing GmbH in support of the Sustainable Development <strong>Goals</strong>, and the advancement of<br />

corporate sustainability globally. This publication is intended strictly for learning purposes. The inclusion of company names and / or examples<br />

does not constitute an endorsement of the individual companies by the United Nations.<br />

2 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

H.E. António Guterres<br />

We have global warming, but we have<br />

UN Secretary-General<br />

also global political warming, and<br />

“<br />

this can be seen in relation to trade<br />

Opening remarks at press conference<br />

at the G20 Summit in Osaka,<br />

and technology conflicts, it can be<br />

June 28, <strong>2019</strong>, Japan<br />

seen in relation to situations in several<br />

parts of the world, namely the Gulf.<br />

And it is also a moment in which there are uncertainties<br />

about the global economy – uncertainties due to trade<br />

conflicts, but also uncertainties related to high levels of<br />

debt, to potential instability in financial markets, the<br />

risk of slowdown in global growth...<br />

And then in relation to the Agenda 2030, it is clear that<br />

we are lagging behind. If we project the different Sustainable<br />

Development <strong>Goals</strong>, the evolution since the beginning<br />

until now to 2030, we will be more or less at midway of<br />

what the international community has determined when<br />

the Agenda 2030 was approved, which means that we<br />

need to accelerate, accelerate the mobilization of resources,<br />

natural resources, countries need to do more, mobilizing<br />

their own internal resources, improving their governance,<br />

reducing corruption, implementing the rule of law.<br />

At the same time, we need to do more in mobilizing the<br />

private sector. Without the private sector, it would be<br />

impossible to achieve these <strong>Goals</strong>. And a lot needs to be<br />

done in order to raise awareness and to show the opportunities<br />

that exist and to create mechanism to reduce risks.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


QUOTE<br />

3 H.E. António Guterres,<br />

United Nations<br />

Secretary-General<br />


6 <strong>Profit</strong> and <strong>Purpose</strong> –<br />

An (Im)perfect Match?<br />

Elmer Lenzen<br />



42 The Curse of the Carbon Bubble:<br />

How to Really Exit the Fossil Age<br />

Stefan Brunnhuber<br />

52 <strong>Profit</strong>s, <strong>Purpose</strong>, and the Planet<br />

Sheila Bonini<br />

58 Stronger <strong>Profit</strong> Potential for<br />

Companies That Serve Society<br />

Alex Edmans<br />

166 GLOBAL GOALS<br />



12 Tomorrow’s Capitalism: The<br />

Leadership Agenda for the 2020s<br />

John Elkington and<br />

Richard Roberts<br />

18 Reconceptualizing Business for<br />

the 21st Century: The Future of<br />

the Corporation<br />

Professor Colin Mayer<br />

22 Get C-level Executives to<br />

Understand It Is “Crunch Time”<br />

for Sustainability Initiatives<br />

Paul Marushka<br />

25 Women’s Empowerment<br />

“Essential to <strong>Global</strong> Progress”<br />

Says Guterres<br />

26 Why Collaboration Isn’t Just a<br />

Sustainability Buzzword<br />

Sunny Verghese<br />


30 Thank God It’s Monday<br />

Jean-Noel Chaintreuil<br />

34 The Future of Business: What<br />

Matters Most to the Millennial<br />

Workforce<br />

38 Migration-led Innovation<br />

Alice Barbe, Guillaume Capelle,<br />

and Camille Soulier<br />

60 No Sustainable Development<br />

Without Tax Transparency<br />

63 The Grand Theft<br />



66 Whose Prosperity Are We<br />

Talking About?<br />

70 Chris Martin: Harvest for the<br />

World<br />

Danny Bowman<br />

74 Basic Welfare State Models<br />

Frank Oschmiansky and<br />

Jürgen Kühl<br />

78 The Rise and Fall of Prosperity<br />

Around the Globe<br />

Faiq Lodhi<br />

<br />

12<br />

Tomorrow’s Capitalism:<br />

The Leadership Agenda for<br />

the 2020s


40<br />

Financing Common<br />

Prosperity<br />

<br />

28<br />

Quest for Talents<br />

66<br />

Distribution of Prosperity<br />

86<br />

88<br />

90<br />

92<br />

94<br />

96<br />

98<br />

100<br />

102<br />

104<br />

106<br />

108<br />

110<br />

112<br />

116<br />

118<br />

120<br />

124<br />

126<br />

128<br />

130<br />

134<br />

136<br />

138<br />

142<br />

144<br />

146<br />

150<br />

152<br />

154<br />

158<br />

160<br />

162<br />

164<br />

Arab African International Bank<br />

Audi<br />

BASF<br />

Bayer<br />

Beaulieu International Group<br />

Bergen Plastics<br />

Bosch<br />

Cargolux<br />

Casinos Austria and Austrian Lotteries Group<br />

CEMEX<br />

Deloitte<br />

Deutsche Telekom<br />

EDF Group<br />

Elsewedy Electric / Iskraemeco<br />

Green Delta Insurance<br />

ING<br />

iPoint-systems<br />


MAN<br />

Manila Doctors Hospital<br />

Mazars<br />

MediaMarktSaturn<br />

Merck<br />

METRO<br />

Moelven<br />

Nomura<br />

Olam International<br />

Pernod Ricard<br />

Philia Earth<br />

Philip Morris International<br />

PUMA<br />

Sakhalin Energy<br />

Symrise<br />

The University of Manchester

<strong>Profit</strong><br />

and<br />

An (Im)perfect<br />

Match?<br />

<strong>Purpose</strong><br />

6 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


The rules for companies have changed. The focus is increasingly<br />

on their sustainable, social, and ecological impacts. The<br />

strategic orientation toward the so-called corporate purpose is<br />

decisive for profitable growth in the future.<br />

Dr. Elmer Lenzen<br />

Publisher<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong><br />

This currently results in a large number<br />

of questions for businesses: How do you<br />

find an inspiring and future-oriented<br />

corporate purpose, and how can it be<br />

aligned in such a way that it brings profitable<br />

growth and social responsibility<br />

in concert? This edition of the <strong>Global</strong><br />

<strong>Goals</strong> <strong>Yearbook</strong> offers answers to these<br />

crucial questions thanks to its consistent<br />

orientation toward the UN Sustainable<br />

Development <strong>Goals</strong> and a competent<br />

editorial board and author pool.<br />

The driver of development is to a large<br />

extent competition for the best minds.<br />

“When everyone is competing for the<br />

same kind of talent, you need a much<br />

clearer way of explaining how you will<br />

attract those people to your organization,”<br />

says Jeff Joerres, Chairman and<br />

Chief Executive Officer of Manpower-<br />

Group. But it is not only the human<br />

resources departments that are pushing<br />

the topic. Experts speak instead of<br />

“inclusive capitalism” and urge that all<br />

stakeholders be taken along, including<br />

boards of management, customers, and<br />

even fund managers. Responsible businesses<br />

have governance structures that<br />

monitor and advise on environmental,<br />

social, as well as financial issues. When<br />

leaders understand and thrive <strong>with</strong>in the<br />

broader social and environmental contexts<br />

in which their businesses operate,<br />

it signals to employees, investors, and<br />

key stakeholders just how important<br />

purpose really is.<br />

What is business for? What role does<br />

and should business play in society? To<br />

what extent should it perform a public<br />

purpose alongside its commercial activities?<br />

How should the aspirations of<br />

humanity, as set out in the Sustainable<br />

Development <strong>Goals</strong>, be reflected in the<br />

objectives of business?<br />

Oxford university professor Colin Meyer<br />

argues: “Corporate purpose is distinct<br />

from the consequential implications<br />

of the corporation’s profitability and<br />

shareholder returns. The purpose of<br />

corporations is not to produce profits.<br />

The purpose of corporations is to produce<br />

profitable solutions for the problems of<br />

people and the planet. In the process it<br />

produces profits, but profits are not per<br />

se the purpose of corporations.”<br />

How, then, does a company<br />

become an effective agent of<br />

systems change?<br />

As part of the Tomorrow’s Capitalism<br />

Inquiry, John Elkington, doyen of the<br />

sustainability community, together<br />

<strong>with</strong> Richard Roberts write: “Being a<br />

little more ‘sustainable’ than your >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


“Only those<br />

businesses that<br />

strategically align<br />

their company<br />

correctly will continue<br />

to be successful.<br />

peers will do little to insulate a company<br />

from external shocks caused by extreme<br />

weather or extreme politics. When the<br />

risks are systemic and the failures are at<br />

a market level rather than an individual<br />

business level, a response that focuses<br />

exclusively on improving individual business<br />

performance will prove inadequate.<br />

So companies are going to have to step<br />

up to become much more active and effective<br />

agents of systems change, unless<br />

they are content simply to be passengers<br />

on a voyage captained by the ghost of<br />

Milton Friedman, which appears to be<br />

headed toward the mother of all icebergs.”<br />

Unpredictability – A world in a vacuum<br />

This realignment is taking place in turbulent<br />

times. Planning was yesterday.<br />

Today we are constantly exposed to new<br />

surprises, and the biggest uncertainty<br />

factor is politics. Is an era of instability<br />

beginning? Uncertainty is not good.<br />

It disturbs our planning. That is a significant<br />

problem for the economy, for<br />

entire societies, and for each individual.<br />

Growing levels of uncertainty mean that<br />

our picture of the future is becoming increasingly<br />

blurred, which has an impact<br />

on economic development. Citizens and<br />

businesses are holding back, purchases<br />

are being postponed, and investment<br />

plans are being cut back.<br />

There are also new cracks opening up.<br />

Confidence levels in state institutions<br />

and companies have declined, and<br />

science is no longer necessarily reliable.<br />

Journalism is no better off: Many citizens<br />

say they can no longer distinguish<br />

between real news and fake news. Societies<br />

are at risk of losing their common<br />

knowledge base.<br />

Worse still is if untested technologies<br />

begin to upset the balance. Whether<br />

it is artificial intelligence or cyber war:<br />

What managers call “game changers”<br />

in strategy jargon are instruments that<br />

transcend experience and control. New<br />

technologies demand new strategies. This<br />

can also be seen as an opportunity, for<br />

example by using the UN <strong>Global</strong> <strong>Goals</strong><br />

as a moral compass. Corporate purpose<br />

can also function as a guideline and<br />

yardstick for correct action.<br />

Therefore, in our chapter about the distribution<br />

of prosperity, we ask “Whose<br />

prosperity are we talking about?” How<br />

can we conserve – and even improve<br />

– the model of the welfare state in a<br />

fragmented, globalized, and highly<br />

competitive world? Finally, an international<br />

study shows that prosperity<br />

is more than just money. Wealth has<br />

many expressions.<br />

Climate change and poverty – What<br />

if the real question is not the impact<br />

on GDP? What if it is the impact on<br />

poverty?<br />

Climate change will have the greatest<br />

impact on those living in poverty, but<br />

it also threatens democracy and human<br />

rights, according to an UN expert. “Even<br />

if current targets are met, tens of millions<br />

will be impoverished, leading to widespread<br />

displacement and hunger,” says<br />

the UN Special Rapporteur on extreme<br />

8 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


to protect themselves,” Alston says. “We<br />

risk a ‘climate apartheid’ scenario, where<br />

the wealthy pay to escape overheating,<br />

hunger, and conflict while the rest of<br />

the world is left to suffer.”<br />

Climate change has immense, but largely<br />

neglected, implications for human rights.<br />

The rights to life, food, housing, and<br />

water will be dramatically affected. But<br />

equally important will be the impact<br />

on democracy as governments struggle<br />

to cope <strong>with</strong> the consequences. What<br />

will also be important is persuading<br />

people to accept the major social and<br />

economic transformations required. “In<br />

such a setting, civil and political rights<br />

will be highly vulnerable,” the Special<br />

Rapporteur says.<br />

poverty and human rights, Philip Alston,<br />

in a report released in June <strong>2019</strong>.<br />

The best-case scenario of 1.5°C of warming<br />

by 2100 will see extreme temperatures<br />

in many regions and leave disadvantaged<br />

populations <strong>with</strong> food insecurity,<br />

lost incomes, and in worse health. Many<br />

will have to choose between starvation<br />

and migration.<br />

“Perversely, while people in poverty are<br />

responsible for just a fraction of global<br />

emissions, they will bear the brunt of climate<br />

change, and have the least capacity<br />

It will also have a tremendous impact on<br />

biodiversity: The rapid loss of biodiversity<br />

threatens the $125 trillion per year in services<br />

that nature provides – from clean<br />

air to clean water, food, fuel, medicine,<br />

and more. “Most human rights bodies<br />

have barely begun to grapple <strong>with</strong> what<br />

climate change means, and it remains<br />

one on a long laundry list of ‘issues,’<br />

despite the extraordinarily short time<br />

to avoid catastrophic consequences,”<br />

Alston explains.<br />

In our chapter “Financing common prosperity,”<br />

Club of Rome member Stefan<br />

Brunnhuber draws a holistic arc from<br />

decarbonization and the curse of carbon<br />

bubble over taxation, impact funding,<br />

and ex-swap strategies to solutions in<br />

partnerships and perhaps even sustainable<br />

parallel currencies.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />



<strong>Purpose</strong> is not the sole pursuit of profits<br />

but the animating force for achieving them.<br />

<strong>Profit</strong>s are in no way inconsistent <strong>with</strong><br />

purpose – in fact, profits and purpose<br />

are inextricably linked. <strong>Profit</strong>s are essential<br />

if a company is to effectively serve all of its stakeholders<br />

over time – not only shareholders, but also employees,<br />

customers, and communities. Similarly, when a company<br />

truly understands and expresses its purpose, it functions<br />

<strong>with</strong> the focus and strategic discipline that drive long-term<br />

profitability. <strong>Purpose</strong> unifies management, employees, and<br />

communities. It drives ethical behavior and creates an<br />

essential check on actions that go against the best interests of<br />

stakeholders. <strong>Purpose</strong> guides culture, provides a framework for<br />

consistent decision-making, and, ultimately, helps sustain longterm<br />

financial returns for the shareholders of your company.”<br />

Larry Fink, Founder, Chair, and CEO of BlackRock<br />

10<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 11

Tomorrow’s Capitalism:<br />

The Leadership<br />

Agenda for the<br />

2020s<br />

12 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


John Elkington<br />

Founder and CEO<br />

Volans<br />

Today, globalized capitalism is being contested in a way that it<br />

has not been since the end of the Cold War. Even arch-capitalists<br />

such as Ray Dalio, founder of Bridgewater, a hedge fund, and<br />

Larry Fink of BlackRock, the world’s largest asset management<br />

firm, have issued stark warnings that capitalism-as-usual is no<br />

longer fit for purpose.<br />

Richard Roberts<br />

Inquiry Lead<br />

Volans<br />

Serious reform is needed to deal <strong>with</strong> the<br />

systemic challenges currently roiling the<br />

global economy. The climate, biodiversity,<br />

society, politics: All are in crisis, and increasing<br />

numbers of people are pointing<br />

the finger of blame at capitalism – or,<br />

rather, the version of capitalism that<br />

has reigned supreme across much of<br />

the world for the last 25 years.<br />

The age of hyper-globalization and<br />

shareholder value maximization has<br />

led businesses to create negative social<br />

and environmental externalities like<br />

never before. From spiraling greenhouse<br />

gas emissions to the hollowing out of<br />

local communities as jobs and tax revenues<br />

disappear – the costs to society<br />

of corporations’ single-minded pursuit<br />

of profits are adding up.<br />

Whose job is it to address these systemic<br />

flaws in the way contemporary capitalism<br />

operates? Many business leaders<br />

would say: not theirs. These are political<br />

challenges, and politics is not – to<br />

adapt a familiar adage – the business of<br />

business. Or at least that is what many<br />

CEOs continue to believe. That does not<br />

mean that corporate leaders are blind to<br />

the problems that business-as-usual is<br />

creating for society. Far from it, in fact.<br />

An awareness of the unsustainability<br />

of many current business practices has,<br />

over the last 25 years, led thousands<br />

of companies to adopt corporate social<br />

responsibility or sustainability programs,<br />

often built around concepts such as the<br />

“triple bottom line” – a term coined by<br />

one of us (John) in 1994.<br />

Last year, we issued a “product recall”<br />

of the triple bottom line concept via<br />

Harvard Business Review on the grounds<br />

that 25 years of well-intentioned efforts<br />

by companies have not halted – let<br />

alone reversed – the undermining of<br />

social and environmental systems on >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


which we all rely. That does not mean that nothing worthwhile<br />

has been achieved: Thousands of companies have reduced<br />

their negative impacts and increased their positive impacts on<br />

society as a result of concerted efforts to integrate sustainability<br />

into corporate decision-making. But anyone who believes that<br />

a few more companies trying a little bit harder to do what<br />

we call “sustainability-as-usual” will eventually add up to a<br />

sustainable global economy is deluding himself or herself.<br />

The defining characteristic of sustainability-as-usual is that<br />

it tries to create change <strong>with</strong>in businesses and across value<br />

chains <strong>with</strong>out challenging contemporary capitalism’s operating<br />

system. Companies may talk about purpose, shared<br />

value, or stakeholder value, but they operate <strong>with</strong>in markets<br />

that reward them principally for their financial performance.<br />

Hence, as we wrote in the HBR piece, “whereas CEOs, CFOs,<br />

and other corporate leaders move heaven and earth to ensure<br />

that they hit their profit targets, the same is very rarely true<br />

of their people and planet targets.”<br />

Rewiring capitalism’s operating system<br />

Since announcing the triple bottom line “recall” in 2018,<br />

Volans – alongside a select group of corporate and noncorporate<br />

partners – has embarked on an in-depth inquiry<br />

into what the corporate leadership agenda for the 2020s will<br />

need to look like in order to address the interlinked climate,<br />

biodiversity, social, and political crises we now face. We call<br />

this the Tomorrow’s Capitalism Inquiry.<br />

People in the corporate sustainability field have talked about<br />

the need for “systems change” for a long time now. The 2020s<br />

are going to have to be the decade when we finally learn how<br />

to do systems change. This starts from a recognition that there<br />

is no such thing as a sustainable company in an unsustainable<br />

economy. Again, this is not a new idea, but the truth of<br />

this statement will be brought home forcefully to companies<br />

over the next decade as their bottom lines are negatively<br />

impacted by climate and social breakdown – symptoms of<br />

an unsustainable economy.<br />

Being a little more “sustainable” than your peers will do<br />

little to insulate a company from external shocks caused<br />

by extreme weather or extreme politics. When the risks are<br />

systemic and the failures are at a market level rather than an<br />

individual business level, a response that focuses exclusively<br />

on improving individual business performance will prove<br />

inadequate. So companies are going to have to step up to<br />

become much more active and effective agents of systems<br />

change, unless they are content simply to be passengers on<br />

a voyage captained by the ghost of Milton Friedman, which<br />

appears to be headed toward the mother of all icebergs.<br />

How, then, does a company become an effective agent of systems<br />

change? As part of the Tomorrow’s Capitalism Inquiry,<br />

we are working to distil the best available thinking on this<br />

question into actionable guidance for corporate leadership<br />

teams. The Inquiry is still ongoing, but what follows is a<br />

preview of our emergent conclusions.<br />

Firstly, companies interact <strong>with</strong> other stakeholders in the<br />

markets, economies, and societies in which they participate<br />

in a number of ways. They act as citizens, buyers, investors,<br />

employers, and producers. The way in which a company<br />

14 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


How, then,<br />

does a<br />

company<br />

become an<br />

effective<br />

agent of<br />

systems<br />

change?<br />

performs these functions determines<br />

its effectiveness as an agent of systems<br />

change. Let us look, briefly, at each in<br />

turn.<br />

1. Citizen: Whether we like it or not,<br />

companies are powerful political actors.<br />

They may not vote in elections,<br />

but many are nonetheless extremely<br />

effective at ensuring their voices are<br />

heard by legislators and regulators.<br />

Typically, though, corporate lobbying<br />

is primarily defensive: It seeks to halt<br />

or slow down the implementation<br />

of rules that will make business-asusual<br />

more costly. But imagine if the<br />

substantial political influence wielded<br />

by companies was targeted instead<br />

toward achieving market reforms that<br />

ensure social and environmental value<br />

creation is properly incentivized. This<br />

may sound far-fetched, but remember<br />

that thousands of companies already<br />

go beyond regulatory compliance in<br />

some aspect or other of their sustainability<br />

performance. In advocating for<br />

regulation that would compel their<br />

competitors to meet the same standards<br />

that they have already chosen to<br />

meet voluntarily, these companies are<br />

merely pursuing their own enlightened<br />

self-interest.<br />

2. Buyer: Companies spend trillions of<br />

dollars a year on procuring goods and<br />

services from other companies. SAP<br />

Ariba, the world’s largest procurement<br />

platform, processes more than $2 trillion<br />

worth of transactions each year<br />

– more than Amazon, Alibaba, and<br />

eBay combined. Today, most procurement<br />

teams are incentivized to do one<br />

thing and one thing only: minimize<br />

costs. But imagine if companies started<br />

to treat procurement not just as a<br />

cost center, but as an engine of social,<br />

environmental, and economic value<br />

creation. By integrating extra-financial<br />

outcomes into purchasing decisions,<br />

companies can create real demand for<br />

products and services that contribute<br />

toward the sustainability of the overall<br />

economy. This is already happening in<br />

places as companies commit to source<br />

energy from renewables or work <strong>with</strong><br />

suppliers that create good jobs at fair<br />

wages in poor communities.<br />

3. Investor: It is not only investment<br />

firms that manage financial assets.<br />

Many non-financial companies have<br />

very significant investments, too –<br />

stretching into the hundreds of billions<br />

of dollars in the case of large<br />

multinationals such as Apple and >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />



Features<br />

Five characteristics that determine how a company behaves<br />

Functions<br />

Five roles that every company plays<br />

Ownership<br />

From… models that privilege uncommitted owners and shortterm<br />

value extraction<br />

To… owners committed for the long term, empowering the<br />

company to pursue social and environmental value creation<br />

Citizen<br />

From… passive, defensive engagement in politics and social<br />

movements<br />

To… being an activist voice for political reforms needed to<br />

make markets sustainable<br />

<strong>Purpose</strong><br />

From… no matter what it says on our website, our actual<br />

lived purpose is to make as much money as possible for our<br />

shareholders<br />

To… our purpose is genuinely about making a positive contribution<br />

to society<br />

Buyer<br />

From… the goal of procurement is to minimize costs<br />

To… we use our purchasing power to create market demand<br />

for socially and environmentally beneficial enterprises<br />

Management<br />

From… the incentives and KPIs that drive our business are<br />

purely about financial performance<br />

To… the incentives and KPIs that drive our business incorporate<br />

social and environmental performance on a par <strong>with</strong><br />

financials<br />

Investor<br />

From… corporate investments managed purely to maximize<br />

financial returns<br />

To… we invest in assets that generate positive outcomes for<br />

people and planet<br />

Data<br />

From… the way we track social and environmental impact is<br />

largely qualitative and the data is patchy and out of date<br />

To… we track social and environmental impact rigorously and<br />

benchmark our performance against what science and ethics<br />

tell us is necessary for a sustainable society to flourish<br />

Employer<br />

From… labor is a cost; we will replace our workers <strong>with</strong> robots<br />

as soon as the robots are cheaper and, until then, we’ll treat<br />

the humans like robots<br />

To… creating good jobs that pay a decent wage and allow<br />

humans to flourish is part of how we create value for society<br />

Culture<br />

From… creating positive social and environmental impact is<br />

not as highly valued as generating financial returns<br />

To… our commitment to creating positive social and environmental<br />

impact is strong enough that it doesn’t disappear<br />

when the going gets tough<br />

Producer<br />

From… we make and sell stuff that is harmful to people and/<br />

or the planet<br />

To… our products and services directly contribute to ecosystem<br />

restoration and social inclusion<br />

16 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


Alphabet. How these assets are managed is a critical element<br />

of how companies engage <strong>with</strong> the wider market. Do they<br />

focus on financial returns exclusively? Do they screen out<br />

certain investments that have a negative environmental or<br />

social impact? Or do they actively seek out investments that<br />

create positive impacts for people and the planet?<br />

4. Employer: Just as supply chains are often treated simply as<br />

a cost to be squeezed, so too workers – in the shareholder<br />

value-maximization paradigm – are seen primarily as<br />

an expense. Over the last few decades, the social contract<br />

between workers and employers has been eroded. In a less<br />

globalized, less digitally connected age, companies faced<br />

an imperative to invest in creating good jobs. Maintaining<br />

a loyal workforce was crucial for business success back<br />

when jobs could not so easily be outsourced to somewhere<br />

halfway around the globe <strong>with</strong> lower labor costs, or to a gig<br />

economy worker who receives none of the benefits of being<br />

an employee, or, indeed, to a robot. Now companies must<br />

learn once again what it means to create good jobs that<br />

allow prosperity to be shared, and to provide people of all<br />

genders, sexual orientations, ethnicities, and backgrounds<br />

<strong>with</strong> opportunities for advancement.<br />

5. Producer: Companies exist to produce goods and services.<br />

But are the goods and services they are producing – and<br />

the business model that wraps around them – good for<br />

society and the planet? Given that studies have shown that<br />

– in a world where all negative externalities were internalized<br />

– almost every industry would today be unprofitable,<br />

most companies will need to radically rethink their products<br />

and business models to thrive in a more sustainable<br />

capitalist system.<br />

Curing corporate schizophrenia<br />

Digging a layer deeper, a company cannot act sustainably<br />

over the long term unless its ownership structure, purpose,<br />

management practices, data systems, and culture are properly<br />

aligned to enable this. Many companies today suffer from<br />

a form of what Kate Raworth, author of Doughnut Economics,<br />

calls “corporate schizophrenia” – a condition brought on<br />

by a fundamental misalignment between these different<br />

elements of a company’s DNA. Many companies today have<br />

lofty purpose statements proclaiming their commitment to<br />

making the world a better place. But too often, there is a<br />

world of difference between a company’s stated purpose and<br />

its lived purpose as expressed by the day-to-day actions of its<br />

employees and executives.<br />

One common cause of this disconnect is the way ownership<br />

is structured. To quote Martin Wolf of the Financial Times, a<br />

publicly listed company in today’s world is required “to serve<br />

the interests of those least committed to it, while control is<br />

also entrusted to those least knowledgeable about its activities<br />

and at least risk of damage by its failure.” The traditional PLC<br />

model may be failing, but there are lots of alternative models<br />

that provide more fertile ground for sustainability: employee<br />

ownership; private or family ownership; state ownership;<br />

industrial foundations; and, perhaps especially, hybrid models<br />

that combine elements of these (by giving an industrial<br />

foundation a controlling stake in the business, for example)<br />

<strong>with</strong> the access to liquidity provided by having some shares<br />

publicly traded. None of these forms of ownership guarantees<br />

a specific set of outcomes, but at least they make it possible<br />

for companies to seriously pursue outcomes other than shortterm<br />

profit maximization.<br />

Management, too, must evolve in order to deliver on a sustainability<br />

agenda that is about more than incremental harm deduction.<br />

Generations of corporate executives have been trained to<br />

maximize shareholder value. Now, as the shareholder value<br />

paradigm disintegrates, they are having to learn a new game:<br />

how to manage and incentivize extra-financial value creation.<br />

To do this, corporate decision-makers require access to the<br />

right data at the right time. Extra-financial impacts need to<br />

be tracked in real time and assessed in relation to science- and<br />

ethics-based thresholds so that companies can use this data<br />

to inform their decision-making and steer a course toward<br />

genuine positive social and environmental impact.<br />

Last but not least, nurturing and sustaining a corporate culture<br />

that empowers all employees to access and act on their innate<br />

human desire to make a positive contribution to the world<br />

is essential. Companies have sometimes relied too heavily<br />

on culture to be the carrier of corporate values. When these<br />

values are at odds <strong>with</strong> the way formal incentives are structured,<br />

culture alone is rarely strong enough. But <strong>with</strong>out the<br />

thousands of individual choices and behaviors that make up<br />

an organization’s culture being aligned to the vision of creating<br />

a sustainable business <strong>with</strong>in a sustainable economy, very<br />

little can be achieved.<br />

Pockets of the future<br />

This essay has only skimmed the surface of the transformative<br />

leadership agenda we see emerging over the next decade. We<br />

have not yet encountered a single organization that successfully<br />

combines all of the elements summarized in the table<br />

below. But we have uncovered many “pockets of the future”<br />

<strong>with</strong>in companies all over the world where the future-fit version<br />

of one or more of these functions and features is already<br />

in play. None of the ideas presented in this essay is based<br />

simply on wishful thinking: All we have done is extrapolate<br />

from and synthesize the best, most hope-inspiring aspects of<br />

the contemporary corporate landscape.<br />

As the science fiction author William Gibson famously said,<br />

“The future is already here – it’s just not evenly distributed.”<br />

Yet.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


Reconceptualizing Business for the 21st Century:<br />

The Future of the Corporation<br />

What is the role of business in contemporary<br />

society? Corporations were originally<br />

established <strong>with</strong> clear public purposes. It is<br />

only over the last half century that corporate<br />

purpose has come to be equated solely <strong>with</strong><br />

profit. This has been damaging for corporations’<br />

role in society, trust in business, and the impact<br />

that business has had on the environment,<br />

inequality, and social cohesion. In addition,<br />

globalization and technological advances risk<br />

exacerbating problems of regulatory lag.<br />

What is business for? What role does and should business play<br />

in society? To what extent should it perform a public purpose<br />

alongside its commercial activities? How should the aspirations<br />

of humanity, as set out in the Sustainable Development<br />

<strong>Goals</strong>, be reflected in the objectives of business?<br />

These are critical questions that are increasingly being asked<br />

of business as its role in exacerbating human, social, and<br />

environmental problems as well as its remarkable contribution<br />

in promoting growth, development, and the alleviation<br />

of poverty are being emphasized.<br />

The bond between the corporation and its public purpose has<br />

waxed and waned since corporations were first established<br />

nearly two centuries ago. This has happened in response to<br />

socioeconomic and geopolitical shifts, but the corporations’<br />

18 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


Professor Colin Mayer<br />

Peter Moores Professor of<br />

Management Studies<br />

Said Business School,<br />

University of Oxford<br />

foundations remained embedded in<br />

delivering a public purpose alongside<br />

commercial functions. It is only over the<br />

last half-century that the sharp intensification<br />

of the profit motive has occurred.<br />

It came as markets for corporate control<br />

emerged to fill the vacuum in corporate<br />

governance created by a growing dispersion<br />

of ownership.<br />

In 1962, Milton Friedman set out a framework<br />

for business in which he described<br />

the social responsibility of businesses as<br />

being to increase profits so long as they<br />

stay <strong>with</strong>in the rules of the game. It was<br />

a powerful and influential proposition<br />

that established the conventional framework<br />

for business around the world.<br />

However, it has serious deficiencies and<br />

is no longer tenable as a framework for<br />

business in the 21st century. It has been<br />

the source of growing disaffection <strong>with</strong><br />

business, its environmental, social, and<br />

political problems, and the erosion of<br />

trust in it. Those problems will intensify<br />

in the future as technological advances<br />

risk exacerbating social detriments as<br />

well as the benefits of corporations, and<br />

public policy responses lag increasingly<br />

further behind innovations.<br />

The case for change<br />

There is a strong and growing ambition<br />

to reconsider and reinterpret the nature<br />

of the corporation, especially in terms<br />

of enabling better alignment between<br />

business and public interests. History<br />

tells us there is nothing radical in this<br />

and demonstrates that it has been commonplace<br />

in many manifestations of the<br />

corporate form.<br />

Tensions caused by technology and evolving<br />

corporate forms are not new either.<br />

Technology is once again the driving<br />

force behind the need for an evolution<br />

in the corporate form. Increasing levels<br />

of technological change are pushing<br />

corporations to adapt business models<br />

and management practices in order to<br />

survive. But institutions and regulations<br />

are adapting too slowly, and the situation<br />

calls for a robust new framework for<br />

business that recognizes the importance<br />

of both corporate and public interests.<br />

Accelerating and disruptive technological<br />

change<br />

Disruptive innovation has always been<br />

part of the corporate landscape. The<br />

Industrial Revolution marked the demise<br />

of many institutions, corporate<br />

structures, labor practices, social and<br />

political norms, and laws, but the birth<br />

of others. That continuing process of<br />

renewal raises complex and inter-linked<br />

economic, social, and political questions.<br />

Technological innovation has, in large<br />

part, driven globalization, prompting<br />

growing tensions between digitally<br />

skilled, location-agnostic commercial corporations<br />

and the constraints of nationbased<br />

political and legal systems. More<br />

specifically, the digital age is bypassing<br />

traditional authorities and changing<br />

the world of work. Smart technologies<br />

are global, networked, intuitive, learning,<br />

and automated. They rely heavily<br />

on the trust and trustworthiness of all<br />

participants and transform how people<br />

and corporations relate to each other.<br />

Among the most disruptive innovations<br />

are artificial intelligence (AI), blockchain,<br />

quantum computing, and 3-D printing,<br />

but there are others not yet formed or<br />

publicized. Such technologies – many<br />

based on data mining and manipulation<br />

– are already impacting economic<br />

activity, from new “clean” energy to<br />

personal communications, medicine,<br />

and bioengineering.<br />

>><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


Recent analysis suggests that technological<br />

innovation may increase incremental<br />

profits for first movers but also reduce<br />

innovation incentives for laggards. What<br />

is already clear is that the world’s highestvalued<br />

corporations are based around<br />

digital ecosystems. Cloud-based platform<br />

businesses rely on global networks of<br />

connectivity of both producers and consumers<br />

rather than the single-location,<br />

hierarchical, linear structures of the<br />

past. The CEOs and board members of<br />

the future may have to be as adept at<br />

the selection of high-quality algorithms<br />

as they are <strong>with</strong> the management of<br />

staff. The rate of technological change<br />

appears to be increasing over time and<br />

becoming less predictable. The pace of<br />

change exceeds the ability of policymakers<br />

and regulators to respond to it.<br />

Instead, business itself needs to be better<br />

placed to manage it <strong>with</strong> a greater clarity<br />

of purpose and an enabling culture to<br />

accommodate it.<br />

There is an urgent need for reform<br />

In response, the British Academy has<br />

brought together leading academics<br />

and business stakeholders under an<br />

ambitious program to redefine the future<br />

of business in the 21st century.<br />

The synthesis covered by our research<br />

has brought out three principles that<br />

could help in the development of a<br />

new framework for the future of the<br />

corporation: corporate purpose, trust,<br />

and culture.<br />

The first principle is well-defined and<br />

aligned purposes. <strong>Profit</strong> is a product<br />

of the corporate purpose. It is not the<br />

corporate purpose. In some – but by no<br />

means all – cases, corporate purposes<br />

should include public purposes that<br />

relate to the firm’s broader contribution<br />

to public interests and societal goals.<br />

The second principle is a commitment<br />

to trustworthiness. When corporations<br />

commit to purposes, they commit to the<br />

various parties that are involved in the<br />

The<br />

purpose of<br />

corporations<br />

is not to<br />

produce<br />

profits. The<br />

purpose of<br />

corporations<br />

is to produce<br />

profitable<br />

solutions.<br />

delivery of those purposes and vice versa.<br />

This creates reciprocal benefits for the<br />

firm, its stakeholders, and society. These<br />

arrangements rely on relations of trust.<br />

The third principle is embedding an<br />

enabling culture. The trustworthiness<br />

of an organization is reliant on clearly<br />

articulated values that are adopted consistently<br />

in the culture of the corporation.<br />

<strong>Purpose</strong> means more than profit<br />

Corporate purpose is the reason a corporation<br />

is created and exists, what it seeks<br />

to do, and what it aspires to become. It<br />

reflects the contribution it wishes to<br />

make in furthering the interests of its<br />

customers, communities, and societies<br />

and is the basis on which relations of<br />

trust are created in business.<br />

Corporate purpose is distinct from the<br />

consequential implications of the corporation’s<br />

profitability and shareholder<br />

returns. The purpose of corporations is<br />

not to produce profits. The purpose of<br />

corporations is to produce profitable<br />

solutions for the problems of people and<br />

the planet. In the process it produces<br />

profits, but profits are not per se the<br />

purpose of corporations.<br />

That distinction is fundamental, and its<br />

confusion in the Friedman Doctrine has<br />

been the source of many of the defects<br />

of current business practice and policy.<br />

All corporate purposes should be intrinsic,<br />

in the sense that they are core<br />

to the businesses and not just driven by<br />

shareholder interests.<br />

On the other side of the coin, corporate<br />

purpose is sometimes automatically<br />

equated <strong>with</strong> public purpose – the<br />

revealed preferences of societies and the<br />

public. There are some circumstances<br />

in which the purposes of corporations<br />

should indeed be equated <strong>with</strong> those of<br />

the public interest. For example, a close<br />

alignment and observance of public<br />

interests in corporate purpose is par-<br />

20 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


ticularly relevant to some companies that perform important<br />

social functions, such as utilities. However, other corporations<br />

should be able to pursue purposes that are not necessarily<br />

prescribed by public preferences.<br />

Embedding a commitment to trustworthiness<br />

Most existing business theories focus on the importance of<br />

respecting contractual obligations, but trust and trustworthiness<br />

are as important as legal obligations. Trust embodies a set<br />

of values, including competency, reciprocity, consistency, and<br />

dignity, which reduce risk, bind parties together, and build<br />

value. In a global, digitally connected society, where reputation<br />

is built via random networks over which corporations<br />

have little or no control, the successful corporation of the<br />

future will be built on trustworthiness, defined as “a robust<br />

disposition to fulfill given commitments.”<br />

Building trustworthiness through the distribution of corporate<br />

duties is desirable and costly, and this responsibility can and<br />

should be encouraged by a range of internal and external<br />

measures. Particularly important in this regard is the culture<br />

of a corporation.<br />

An enabling culture<br />

There is consensus on the importance of corporate culture<br />

and its integrative and holistic essence, but little on how it is<br />

defined, let alone measured and influenced. Culture is vital<br />

as a facilitator of strategy and is particularly important when<br />

implementing corporate changes, notably technological change.<br />

Several studies have demonstrated a clear correlation between<br />

negative business performance and cultural obstacles.<br />

A weak or damaging culture is recognized as a cause of excessive<br />

risk-aversion, thinking in silos instead of multilaterally,<br />

and linear rather than networked transfer of information. But,<br />

despite this, corporate culture is still seen as a “soft” resource,<br />

elusive to define and difficult to measure and manage. False<br />

culture can block change, defeat governance, and provoke<br />

financial instability.<br />

The levers of change<br />

There are a range of possible tools and levers available to business<br />

leaders and governments to promote change. Achieving<br />

a shift to this new framework will require coordinated action<br />

using five levers. First is ownership. Corporate ownership is<br />

currently equated <strong>with</strong> shareholders. Instead, it should be associated<br />

<strong>with</strong> defining and implementing corporate purpose. The<br />

rights and responsibilities associated <strong>with</strong> corporate purpose<br />

should replace property right views of ownership. Different<br />

types of owners are suited to different types of corporate<br />

purposes and activities. This points to the need for diversity<br />

in corporate ownership.<br />

The second lever is corporate governance. Corporate governance<br />

is currently associated <strong>with</strong> aligning the interests of<br />

management and shareholders. Instead, it should be linked<br />

to the implementation of corporate purposes. Boards cannot<br />

control some of the largest risks relating to globalization, the<br />

environment, and technology. New performance measures are<br />

needed for executives to ensure conformity of corporations’<br />

activities and investments <strong>with</strong> their purposes.<br />

The third lever is regulation. The notion that competition,<br />

regulation, and taxation are sufficient to align the interests<br />

of business <strong>with</strong> society is no longer tenable. Technology is<br />

intensifying the problem of regulatory lag. One concrete proposal<br />

in this regard is to promote “forward compliance.” More<br />

generally, a fundamental overhaul of regulation is required<br />

that encourages companies which perform significant social<br />

functions to incorporate public purposes in their corporate<br />

purposes.<br />

Fourth is taxation. <strong>Global</strong>ization has eroded the corporate tax<br />

base by allowing corporations to arbitrage tax domiciles and<br />

transfer liabilities to lowest-tax jurisdictions. Our study identifies<br />

and debates the main reforms that are currently being<br />

discussed. However, none of these are <strong>with</strong>out their problems,<br />

pointing to the need for a closer association of corporate <strong>with</strong><br />

public purposes in the determination of fair levels of taxation.<br />

The final lever is investment. Public as well as private investment<br />

is required to deliver large-scale, long-term infrastructure<br />

investments. Attempts to achieve this through privatization,<br />

public–private partnerships, and private finance initiatives<br />

have often been disappointing. It is in precisely these areas<br />

where corporations perform important public and social functions.<br />

Private and public purposes need to be aligned through<br />

the adoption of public purposes in corporate charters and<br />

articles of association.<br />

Together, these levers offer the opportunity of promoting<br />

businesses that can be trusted to uphold their commitments<br />

to their corporate purposes.<br />

This article is based on the study “Reforming Business for the 21st<br />

Century. A Framework for the Future of the Corporation” which was<br />

published by the British Academy as part of its Future of the Corporation<br />

program in November 2018.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


Get C-level Executives to<br />

Understand It Is “Crunch Time”<br />

for Sustainability Initiatives<br />

When it comes to getting a buy-in for a<br />

sustainability project – or any other plan that<br />

could be perceived as low priority – you cannot<br />

pull any crunches.<br />

Number crunches, that is. It is no secret that C-level executives<br />

want to see solid bottom-line results from their strategic business<br />

decisions. Who would not? They want to ensure there is<br />

a solid reason to act, and that it will be financially beneficial<br />

to do so. When it comes to sustainability, even companies that<br />

make decisions for the greater good also end up benefiting<br />

the greater good of their budgets.<br />

On the surface, procuring a budget for what some consider<br />

“nonessential” sustainability issues might appear to be a huge<br />

challenge, but it really is not. A sustainability focus is a sound<br />

business strategy. Forward-thinking organizations understand<br />

the importance of being good stewards for their organizations,<br />

22 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


their neighbors, the environment, and future generations as<br />

well. The real challenge centers around appropriately justifying<br />

and communicating the tangible benefits of sustainability<br />

investments.<br />

In his recent commencement speech at Tulane University,<br />

Apple CEO Tim Cook said: “When we talk about climate<br />

change or any issue <strong>with</strong> human cost – and there are many<br />

– I challenge you to look for those who have the most to lose<br />

and find the real, true empathy that comes from something<br />

shared. That is really what we owe one another.”<br />

Cook gets it: It is your job to make people in your C-suite understand<br />

sustainability’s importance as well. Making sustainability<br />

part of an organization’s DNA goes a long way toward<br />

developing a culture of action. The first step is to educate the<br />

organization about the benefits of sustainability. Every year<br />

my company, Sphera, hosts a Sustainability Day, which gives<br />

our colleagues the ability to learn about the importance of<br />

sustainability and even a chance to volunteer for environmental<br />

initiatives.<br />

Paul Polman, Unilever’s CEO, and CB Bhattacharya, a professor<br />

of marketing and management at the University of Pittsburgh,<br />

wrote in the Stanford Social Innovation Review in 2016: “The key<br />

to creating a vibrant and sustainable company is to find ways<br />

to get all employees – from top executives to assembly-line<br />

workers – personally engaged in day-to-day corporate sustainability<br />

efforts.”<br />

Paul Marushka<br />

President and CEO<br />

Sphera<br />

That can pay big dividends. A 2018 sustainability study from<br />

ING Group, a Dutch banking and financial services company,<br />

found that 48 percent of the US companies surveyed said<br />

that sustainability concerns “actively influence their growth<br />

strategies,” and 68 percent of the companies <strong>with</strong> the most<br />

mature sustainability programs said their performance “has<br />

helped them to win new business from clients.” Additionally,<br />

the report explains how UPS was able to reduce CO 2<br />

emissions<br />

by 210,000 metric tons and save $400 million annually since<br />

2013 by employing its On Road Integrated Optimization and<br />

Navigation (ORION) program, which uses telematic data to<br />

make delivering packages more efficient. >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


First<br />

crunch<br />

To make the case for sustainability, the first number that<br />

needs to be highlighted in an extra-large font is “1.5.” This<br />

refers to the increase in temperature scientists predict the<br />

Earth will realize (1.5°C) between 2030 and 2052 – a generation<br />

or less from now – if global citizens do not do anything<br />

to combat climate change. As the Intergovernmental Panel<br />

on Climate Change reported last year: With increased global<br />

temperatures being caused by greenhouse gases and the like,<br />

sea levels will continue to rise, some areas of the world will<br />

be affected by heavy precipitation, others will experience<br />

droughts, and the frequency of extreme weather events will<br />

likely pick up. A recent World Bank report found that some<br />

countries’ gross domestic products could drop 7.7 percent<br />

because of climate change when people “live in locations that<br />

could become moderate or severe hotspots by 2050 under the<br />

carbon-intensive scenario.”<br />

Second<br />

crunch<br />

After you have explained the problem and the importance of<br />

sustainable measures, the next number to focus on is “15.”<br />

In 2017, the World Economic Forum posted an article called<br />

“How Going Green Can Help the Planet and Your <strong>Profit</strong>s.” The<br />

article states that companies that focus on eco-innovation<br />

grow at a 15 percent rate compared <strong>with</strong> a flat rate for their<br />

competitors. Indeed, Nielsen predicts the US sustainability<br />

market will reach $150 billion by 2021, and the Millennial<br />

generation is leading the charge. In the survey, 75 percent of<br />

Millennials said they are “definitely” or “probably” changing<br />

their buying habits to focus on sustainable products vs. 34<br />

percent of Baby Boomers. It is no wonder why companies such<br />

as Method went from a small soap business in 2000 to a $100<br />

million company, according to Inc. magazine, by focusing on<br />

sustainability.<br />

Third<br />

crunch<br />

Focus on the number “50.1 billion.” That is the projected<br />

number of Internet of Things devices expected by 2020. Why is<br />

that significant? Governments take environmental compliance<br />

seriously. The US Environmental Protection Agency in fiscal<br />

2018 alone enforced $69.5 million in administrative and civil<br />

penalties. In fiscal 2017, because of Clean Air Act violations,<br />

penalties almost reached $1.7 billion.<br />

By employing Integrated Risk Management 4.0 strategies that<br />

use data from Industrial Internet of Things sensors, which can<br />

play a key role in sustainability efforts, companies can monitor<br />

their environmental performance and make prescriptive and<br />

predictive decisions to lower their carbon footprint and their<br />

risk of being fined for not being in compliance. Although taking<br />

initiatives to lower environmental risks might not make<br />

breaking news, they still always trump the negative publicity<br />

and damage-control expenditures that come from being named<br />

on a news report for causing damage to the planet and not<br />

being a good corporate citizen.<br />

Fourth<br />

crunch<br />

This takes us to the final number that you should consider highlighting:<br />

$3.3 trillion. The CDP is a not-for-profit organization<br />

that helps companies manage their environmental effectiveness.<br />

Its 115 global members have a combined $3.3 trillion in procurement<br />

spending, which means they have mega purchasing<br />

power. Every year, the organization surveys its members on<br />

supply chain sustainability initiatives. The most recent report<br />

found that the 5,500 suppliers queried were able to collectively<br />

cut their CO 2<br />

emissions by 633 million tons (more than 1 percent<br />

of all global emissions). Perhaps even more compelling,<br />

especially from a C-suite perspective: “[T]hese were associated<br />

<strong>with</strong> annual monetary savings in excess of US$19.3 billion<br />

for those companies, highlighting the frequently compelling<br />

business case for taking action on climate change.”<br />

One more<br />

crunch<br />

The numbers add up. Sustainability initiatives promote the<br />

common good and are good for your budget. We just need<br />

to use the numbers to clearly articulate the economic case<br />

for the C-suite and the entire organization of the benefits of<br />

sustainability. After all, it is crunch time.<br />

24 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


Women’s Empowerment “Essential to<br />

<strong>Global</strong> Progress” Says Guterres<br />

Women’s empowerment and gender equality are “essential to global progress,” United Nations<br />

Secretary-General António Guterres stressed in his message for International Women’s Day, which<br />

this year puts “innovation by women and girls, for women and girls” at the heart of efforts to<br />

achieve gender equality.<br />

“Last year, for the first time, we achieved<br />

gender parity in the UN’s Senior Management<br />

Group and among those who lead<br />

UN teams around the world,” the UN<br />

chief said, adding that the organization<br />

is “working to achieve parity across the<br />

whole United Nations system <strong>with</strong>in a<br />

decade.”<br />

The UN began celebrating the day in<br />

1975, which was designated International<br />

Women’s Year. Over the decades, it has<br />

morphed from recognizing the achievements<br />

of women to becoming a rallying<br />

point to build support for women’s rights<br />

and participation in the political and<br />

economic arenas.<br />

“Gender equality is essential to the effectiveness<br />

of our work, and we cannot<br />

afford to miss out on the contributions of<br />

half of the world’s population,” Deputy<br />

Secretary-General Amina J. Mohammed<br />

explained. Moreover, she continued,<br />

“women’s equal participation in the labor<br />

force would unlock trillions of dollars<br />

for global development.”<br />

“Let us be clear,” she spelled out: “We cannot<br />

build the future we want and achieve<br />

the Sustainable Development <strong>Goals</strong> (SDGs)<br />

<strong>with</strong>out the full participation of women.”<br />

Achieving a gender-equal world requires<br />

social innovations that work for both<br />

women and men and leave no one behind,<br />

according to the overarching UN<br />

strategy. E-learning platforms that take<br />

classrooms to women and girls; affordable<br />

and quality childcare centers; and<br />

technology shaped by women are a few<br />

examples of the innovation needed to<br />

meet the deadline set out in the 2030<br />

Agenda for Sustainable Development.<br />

“And we need more women leaders<br />

participating in public life and taking<br />

decisions,” explained General Assembly<br />

President María Fernanda Espinosa,<br />

urging everyone to redouble their efforts<br />

“against the discrimination and violence<br />

women and girls face every day.”<br />

For her part, UN Youth Envoy Jayathma<br />

Wickramanayake is drawing attention<br />

to the millions of young girls preparing<br />

to start their working lives, saying that<br />

far too often, “they don’t get the opportunity<br />

to realize their dreams and<br />

grow into their power.” She added, “let’s<br />

invest in girls’ education and skills so<br />

they become the leaders and innovators<br />

they were born to be.”<br />

In her message for the day, Executive Director<br />

of UN Women Phumzile Mlambo-<br />

Ngcuka pointed out that “women and<br />

girls around the world still face many<br />

challenges,” arguing that changes begin<br />

<strong>with</strong> making sure that their needs and<br />

experiences are integrated and enhanced<br />

by new technology and innovation. “On<br />

International Women’s Day,” she concluded,<br />

“we ask all to join us to ‘Think<br />

equal, build smart, and innovate for<br />

change.’”<br />

Phumzile Mlambo-Ngcuka<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


Why Collaboration Isn’t<br />

Just a Sustainability<br />


Today’s businesses are in the<br />

spotlight like never before.<br />

Many have had their own<br />

visions for sustainability<br />

in place for years, <strong>with</strong><br />

globalization intensifying<br />

environmental and societal<br />

concerns. But now the world<br />

has given us a deadline –<br />

2030 – by which time we are<br />

all to have achieved the 17<br />

UN Sustainable Development<br />

<strong>Goals</strong> (SDGs).<br />

Sunny Verghese<br />

Chair, WBCSD<br />

Co-Founder and Group CEO<br />

Olam International<br />

Over the next 11 years, business success<br />

will be inextricably linked to solving the<br />

world’s big societal and environmental<br />

challenges.<br />

Magnifying the odds of success<br />

The ambitions of the SDGs are well beyond<br />

the reach of any company in isolation.<br />

The transformative agenda cannot<br />

be achieved <strong>with</strong> “business as usual,” nor<br />

through the singular approach of a few<br />

disruptive innovations here and there.<br />

Whole sectors need to rally around the<br />

challenges and think bigger in terms of<br />

systems transformation: To transform<br />

the key economic systems by 2030 that<br />

are needed to create a world in which<br />

9 billion people can all live well and<br />

<strong>with</strong>in the boundaries of our planet.<br />

Crucially, this is where the bigger business<br />

opportunities lie. Consider a global<br />

food and agricultural system in line <strong>with</strong><br />

the <strong>Global</strong> <strong>Goals</strong> – one that feeds the<br />

growing population, generates higher<br />

incomes, and restores natural resources<br />

and vital ecosystems. This would unlock<br />

economic value of more than $2 trillion<br />

by 2030 and would be much more resilient<br />

to climate risk. If we include the<br />

other economic systems – cities, energy<br />

and materials, and health – the opportunity<br />

totals $12 trillion * . This makes it<br />

a commercial imperative for business<br />

leaders to work <strong>with</strong> sector peers to drive<br />

systemic change. Industry needs to build<br />

coalitions such that each participant in<br />

every sector – be it food, energy, or<br />

transportation – can pool resources and<br />

map their collective route to optimize<br />

their contributions on the road to 2030.<br />

This, in turn, helps the sector to collectively<br />

strengthen its license to operate,<br />

manage operational and regulatory risks,<br />

and open up growth markets.<br />

The first Sector SDG Roadmap was developed<br />

last year by nine of the world’s<br />

leading chemical companies, who joined<br />

forces and worked <strong>with</strong> the World Business<br />

Council for Sustainable Development<br />

(WBCSD). The Roadmap that are<br />

aligned <strong>with</strong> tangible actions, through<br />

which they can deliver transformative<br />

impact in their industry.<br />

The forestry and Indian cement<br />

sectors have since followed suit <strong>with</strong><br />

their respective roadmaps, and the oil<br />

and gas sector has one in the pipeline<br />

for next year.<br />

System transformation requires<br />

surprising alliances<br />

We also need to galvanize those beyond<br />

our own sectors and take action at every<br />

level. At Olam, as a food and agriculture<br />

business, we need to get others to become<br />

more sustainable to protect our supply<br />

chains – we need the energy, transport,<br />

26 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


and construction sectors playing their<br />

part to combat climate change.<br />

Being a member of the Climate Smart Agriculture<br />

project has helped our thinking<br />

evolve around climate change strategies<br />

that drive business improvements, such<br />

as providing weather stations right across<br />

the West Africa cocoa belt. For our farmers<br />

in Ghana, this access to weather data<br />

means they can time the applications of<br />

inputs and farm practices <strong>with</strong> the right<br />

conditions, which translates into higher<br />

yields and incomes. As for the business<br />

benefits for all involved, food companies<br />

receive higher volumes of data to<br />

inform trading strategies, while chemical<br />

companies can more efficiently meet<br />

demands for providing crop protection.<br />

Rice-growing is another example of<br />

where cross-sector alliances are driving<br />

real change at the country level. Every<br />

year, the production of this staple crop<br />

around the world emits the same amount<br />

of greenhouse gases as Germany, making<br />

it a leading contributor to climate change.<br />

But the Sustainable Rice Landscapes<br />

Initiative – led by a broad coalition<br />

that includes the Food and Agriculture<br />

Organization, UN Environment, the<br />

Sustainable Rice Platform, and WBCSD<br />

– is focussing on reducing greenhouses<br />

gases under the Paris agreement. The<br />

solution is simple: Just training farmers<br />

on efficient water management can cut<br />

methane emissions by up to 70 percent.<br />

Moreover, the farmers can earn up to 20<br />

percent more this way. The approach allows<br />

businesses such as Olam to develop<br />

replicable, scalable models to deliver<br />

tangible change for farmers, for businesses,<br />

and for governments.<br />

Having a voice in these alliances is also<br />

essential to ensure a strong degree of<br />

practicality and relevance regarding the<br />

overall focus. The very nature of whole<br />

system transformation means that no one<br />

can afford to be left behind. This is Olam’s<br />

rationale for joining the Food Reform<br />

for Sustainability and Health (FReSH)<br />

project – to balance the conversation<br />

around consumer demand <strong>with</strong> the supply<br />

perspective. Now that the EAT Lancet<br />

has defined what a sustainable diet looks<br />

like, we – along <strong>with</strong> manufacturers –<br />

need to start thinking collaboratively<br />

about how we produce this.<br />

Comparability is key<br />

When it comes to accounting for our<br />

impact, it helps to create consensus as<br />

a sector about what is material and the<br />

right methodologies. This allows for comparability,<br />

and where there is underperformance,<br />

businesses have the support<br />

to build corrective action plans.<br />

For the agriculture and forestry sectors,<br />

the Cocoa & Forests Initiative, <strong>Global</strong><br />

Forest Watch, and Cocoa Action are<br />

just a few of the examples of valuable<br />

industry-wide alliances that offer a clear<br />

picture of progress. They help us develop<br />

the right pathways for greater impact.<br />

A new standard of competitiveness has<br />

stemmed from these reporting initiatives,<br />

as businesses are increasingly open<br />

to reporting on their SDG contributions.<br />

Just look at the 575 companies that<br />

have signed up to the Science Based<br />

Targets to date.<br />

We know that the SDGs cannot be delivered<br />

only through the efforts of individual<br />

companies. Businesses need to<br />

understand how they operate <strong>with</strong>in<br />

the broader landscape and then work<br />

collaboratively – both <strong>with</strong>in and outside<br />

of their sector – to achieve the<br />

outcomes that can deliver the necessary<br />

impact.<br />

*<br />

Source: Better Business, Better World,<br />

http://report.businesscommission.org/<br />

report%23references”<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


people to your organization.”<br />

When everyone is competing for the same<br />

kind of talent, you need a much clearer way<br />

of explaining how you will attract those<br />

Jeff Joerres, Chair and CEO of ManpowerGroup<br />

28 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


Thank<br />

God<br />

It’s<br />

Monday<br />

How the Search for Talents Affects<br />

Corporate Culture, Working Concepts, and<br />

Business Attitudes Toward Sustainability<br />

30 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


“Talented people are vital<br />

to our continued success,<br />

and we continuously invest<br />

in our associates, giving<br />

them the tools and training<br />

to succeed.” – Indra Nooyi<br />

Nooyi, who served as CEO of PepsiCo for 12 years and made<br />

the company’s sales grow by 80 percent, is one of the best<br />

examples to open an article about understanding the importance<br />

of corporate culture in the war for talent – and how it<br />

serves the company’s longevity. But how can you build longterm<br />

talent management plans in a world where the median<br />

tenure for workers aged 25 to 34 is 3.2 years – down from<br />

10.3 years for employees aged 65 and over? How can you make<br />

sustainability part of your corporate culture in a way that will<br />

help you attract the best talents and create an environment<br />

that prevents job-hopping as much as possible? How do the<br />

attitudes of business leaders have to change so that company<br />

values are aligned <strong>with</strong> the values of its talented workers?<br />

Jean-Noel Chaintreuil<br />

Founder and Director<br />

Change Factory<br />

Let us start by setting one thing straight: Do not target young<br />

people. Do you need young people? Yes, of course. Did Apple<br />

poach Ian Goodfellow, a 34-year-old who was one of Google’s<br />

top AI researchers? Yes. Did they first poach John Giannandrea,<br />

a 54-year-old researcher? Most definitely. You can focus on<br />

young people, but do not overestimate the results of having a<br />

company filled <strong>with</strong> the same age group, as you also need more<br />

experienced talents – and their expectations have changed<br />

as well. If you want to answer young people’s expectations,<br />

do not forget two things: They are not as young as you think<br />

(Millennials have children and mortgages to pay), and they<br />

have come around to the fact that ping pong tables will not<br />

help them advance in their careers. Although you could at<br />

some point address Baby Boomers and Generation X members<br />

as groups <strong>with</strong> common interests and goals, Millennials >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


have to be considered as individuals <strong>with</strong><br />

different aspirations – or at least as sets<br />

of subgroups <strong>with</strong> different aspirations<br />

– all while their attitude has rubbed off<br />

on their elders.<br />

But you will have to reconcile different<br />

time scales to address these aspirations<br />

in a way that serves your company:<br />

• your company’s strategy and short-term<br />

goals that serve your long-term goals;<br />

• the relatively short-term goals of the<br />

employees who will stay, on average,<br />

three years in your company;<br />

• the long-term goals they strive to serve<br />

by working for you.<br />

Think adapted compensations and<br />

benefit strategies, custom career paths,<br />

and identification <strong>with</strong> their leaders. If<br />

talents start seeing a position in your<br />

company as both a stepping stone to<br />

another position and a valuable experience<br />

in itself, consider what you can do<br />

to bring them both.<br />

The era in which talents climb the ladder<br />

in one occupation – whether it be<br />

communications, human resources, or<br />

sales – and go from a junior or assistant<br />

position to a senior or head position is<br />

partly over. Career paths increasingly<br />

consist of two years spent in corporate<br />

communications, three years of entrepreneurship,<br />

one experience in employer<br />

branding, and one in digital project management.<br />

How companies adapt to this<br />

new paradigm is key for their ability to<br />

win the talent war. Adjust to that new<br />

paradigm by offering training and opportunities<br />

that will bring added value<br />

to your employees.<br />

Of course, some jobs include mandatory<br />

trainings, such as in ethics or confidentiality<br />

and privacy. But why would<br />

you offer training in communications<br />

only to communications officers? Then<br />

again, why would you even tell your<br />

employees what training they should<br />

follow? Of course,<br />

the company can<br />

still suggest the<br />

most appropriate<br />

trainings to reach<br />

a given goal, but<br />

why would you<br />

not empower your<br />

employees even<br />

more? Give them<br />

the possibility to<br />

access the whole<br />

catalog of courses<br />

they can attend –<br />

whether online<br />

or offline – and<br />

encourage them to actually make the<br />

most of it, which implies encouraging<br />

managers to happily allow their teams to<br />

take time off for training (for reasonable<br />

amounts of time, of course).<br />

Make your middle managers a key link to<br />

the growth of your company in the long<br />

run. They are the ones who are in touch<br />

<strong>with</strong> your employees on a regular basis<br />

and are therefore uniquely positioned<br />

to know what your employees want –<br />

and what they are actually planning for.<br />

But they cannot make it happen if they<br />

stay in their fields <strong>with</strong>in the company.<br />

A network of middle managers will both<br />

allow for developing transversal projects<br />

and for creating more mobility opportunities<br />

for people <strong>with</strong>in their teams,<br />

allowing the employees who want to<br />

change positions to do so <strong>with</strong>in the<br />

company.<br />

Making empowerment part of your company<br />

culture is the best way to help your<br />

employees grow – so they can make<br />

your company grow.<br />

Offering the possibility of having various<br />

career paths sounds great on paper. But<br />

how do you ensure your employees feel<br />

they have actual opportunities <strong>with</strong>in<br />

your company? Did you know that black<br />

women tend to move from one company<br />

to another more than white women<br />

because they feel that it is the only way<br />

for them to get ahead in their careers?<br />

Microsoft took a big stance to create an<br />

inclusive company by launching their<br />

“communities” at the end of the 1990s.<br />

“Communities” are groups of workers<br />

who are united by the fact that they identify<br />

<strong>with</strong> groups that could be discriminated<br />

against in the workplace: Blacks@<br />

Microsoft, the LGBTQ+ community, the<br />

parents community, the Asian community,<br />

etc. How does it work? It creates<br />

opportunities for talents who fit in their<br />

communities – through scholarships<br />

and the sponsoring of organizations such<br />

as Black Girls Code – and advocates for<br />

changes. The point is to make the lives<br />

of these community members easier<br />

<strong>with</strong>in Microsoft, even though the law<br />

does not require special dispositions in<br />

all the countries where Microsoft is present.<br />

“Communities” can also act as small<br />

internal lobbies to offer insurance and<br />

benefits to same-sex domestic partners,<br />

as they would for heterosexual couples,<br />

and cover transgender care, for example.<br />

It even led some LGBTQ+ employees to<br />

say that, although they are in a country<br />

where being gay is illegal, Microsoft<br />

offices are a safe haven where they can<br />

be themselves.<br />

Even though you cannot necessarily<br />

reproduce this exact model <strong>with</strong>in your<br />

company – some countries would<br />

consider it discriminatory and illegal<br />

– think about what allows people to<br />

feel that they have equal opportunities<br />

<strong>with</strong>in your company. There are two<br />

32 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


So how do you set in motion sustainable actions that are<br />

good for your employees and good for your company – and<br />

ultimately good for society? Of course, there are simple things<br />

such as making sure you reduce waste used by company<br />

operations – in packaging and in advertising. But for all<br />

the things that are harder to measure – or have a long-term<br />

impact that cannot be proven yet – such as making your<br />

company more inclusive, find and follow your own KPIs.<br />

ways to do so: On the one hand, ensure that who they are<br />

does not slow their careers down; on the other hand, provide<br />

an inclusive and transparent environment at every level of<br />

your company. Start <strong>with</strong> easy things that you can control:<br />

See that the pay gap is bridged <strong>with</strong>in your company (or<br />

create dynamic salary scales as Warren Buffet did), that all<br />

mothers and fathers are treated the same (Millennials are<br />

now old enough to have children!), that you offer the same<br />

compensations to same-sex couples as you do to heterosexual<br />

couples, and that people who have a sick parent are able to<br />

take some time off to take care of them. Without getting too<br />

political, see that your employees know you are aware that<br />

they are individuals <strong>with</strong> different needs and have identities<br />

beyond being your (young) employees.<br />

Then, make sure that your staff is diverse at every level. A<br />

company where the whole C-suite is composed of white males<br />

might seem less attractive to young white women or people<br />

of color. Leaders <strong>with</strong> varied experiences will be better able to<br />

understand the experiences (and struggles) of a diverse workforce.<br />

A more diverse workforce will have more empathy for<br />

a diverse set of clients, a better ability to expand product lines<br />

to cater to diverse needs, and a better ability to understand<br />

why some demographics will not use them. It will also allow<br />

you to communicate in a more thoughtful way so that you<br />

can make positive contributions to social debates instead of<br />

being talked about in a negative way.<br />

It would be tempting to directly associate young talents <strong>with</strong><br />

the causes they seem to support, just as it would be easy to<br />

think that meaning well results in great actions. Sometimes<br />

even the best intentions end up serving a bad purpose, as in<br />

the case of Doug Evans. Even though he was very much aligned<br />

at a personal level <strong>with</strong> healthy ways of eating, he ended up<br />

founding a company, Juicero, that produced expensive juicers<br />

pointlessly connected – in other words, he ended up selling<br />

a wasteful way to take care of oneself.<br />

This article started <strong>with</strong> the idea that young people tend<br />

to change positions more often than previous generations.<br />

Measuring how long people stay in your company is a good<br />

start. You can also measure packaging costs, the time needed<br />

to recruit talent, the number of candidates for a given position,<br />

the growth on given markets, etc. Consider what<br />

society cares about. Companies and society as a whole now<br />

belong to the same world. Companies have a major impact,<br />

and both your employees and your clients know it. Then<br />

again, do not “greenwash” (insincere environmentalism) or<br />

“pinkwash” (fake concern for women’s rights), as these rate<br />

very poorly among young talents – they make the company<br />

look like it is trying to show positive actions to hide (very)<br />

negative ones. They want their company to be aligned <strong>with</strong><br />

their values. They also want the company’s actions to be<br />

aligned <strong>with</strong> its message.<br />

Do not lie about the areas in which you could still improve<br />

your actions; acknowledge that you are not perfect and<br />

could do better. Glossier, a company that has made sending<br />

stickers and a plastic pouch <strong>with</strong> each order part of its playful<br />

image, has acknowledged that this marketing move can<br />

be considered wasteful if the little gifts are not used. They<br />

now plan to give customers the option not to receive the<br />

gifts <strong>with</strong> their order. If you feel there is an area you could<br />

improve in as a company, let your employees know and<br />

create taskforces that go beyond research and development.<br />

You can even include your customers to create a more open<br />

company, as they might be the ones to let you know something<br />

is unsustainable in the way you work. Maybe some of<br />

your employees and customers already use solutions to reuse<br />

packaging, reduce the pollution created by ordering online,<br />

use fewer chemicals – they can bring interesting ideas to the<br />

table. In the field of sustainability, being able to admit that<br />

you probably can do better and actually achieve continuous<br />

improvement is key.<br />

The two keywords of how the search for talents affects<br />

corporate culture as a whole are probably empathy and<br />

empowerment. If you want to attract the best talents, make<br />

the talents you already have <strong>with</strong>in your company feel like<br />

you care. Listen to them, act accordingly, and find ways to<br />

give them more responsibility and more freedom to make<br />

your company the change they want to see in the world.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


The Future<br />

of Business:<br />

What Matters<br />

Most to the<br />

Millennial<br />

Workforce<br />

The conversation around Millennials and Generation Z is<br />

old news? Well, by 2020 they will form 50 percent of the<br />

global workforce. In fact, business leadership is becoming<br />

Millennial. Therefore, it is better to forget the frustrations<br />

of managing and influencing these folks. They are about<br />

to be in charge soon. So, it might be time to assess our<br />

attitudes to those born between 1980 and 2000.<br />

“The contract between the organization<br />

and the individual is beginning to<br />

change,” says Lynda Gratton, Professor of<br />

Management Practice at London Business<br />

School (LBS). “The old contract looked<br />

like this: ‘I work to buy stuff that makes<br />

me happy.’ The contract is negotiated<br />

by tangible assets. The new contract<br />

will be, ‘I work to make me happy.’ We<br />

have to think about work as being the<br />

thing, not the money you get from it. I<br />

don’t see many companies realizing how<br />

profound that change will be.”<br />

The fact that purpose tops the agenda for<br />

Millennials is backed up by PwC’s recent<br />

Workforce of the Future survey, which<br />

found that 88 percent of them want to<br />

work for a company whose values reflect<br />

their own. Millennials will comprise 75<br />

percent of the global workforce by 2025.<br />

34 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


The Deloitte 2017 <strong>Global</strong> Human Capital<br />

Trends report similarly found that most<br />

Millennials look beyond a company’s<br />

financial performance when deciding<br />

whether or not to work there. Only one in<br />

five survey respondents said they would<br />

choose to stay at a solely profit-driven<br />

company for more than five years.<br />

<strong>Profit</strong> <strong>with</strong> purpose the new norm?<br />

“<strong>Profit</strong> <strong>with</strong> purpose is set to become the<br />

new norm,” said Antonio Zappulla, CEO<br />

Designate of Thomson Reuters Foundation,<br />

at this year’s World Economic<br />

Forum in Davos. “Up to this point, social<br />

enterprise and impact investment have<br />

been driving this concept, which has<br />

somehow remained confined to a niche.<br />

Not anymore. Now, it’s all set to change:<br />

The CEOs of the future will want their<br />

companies to be recognized as forces for<br />

good. In business, CEOs have gone from<br />

being symbols of aspiration to objects of<br />

intense scrutiny,” he explained. “Even<br />

the younger, ‘cooler’ entrepreneurs, the<br />

kick-starters of the shared economy, are<br />

now being asked questions about the<br />

impact their companies have on society.<br />

Trust has become the ultimate currency.”<br />

“There has to be a strong connection<br />

between what your company wants to<br />

do and be, and what you want to do and<br />

be,” advises Richard Hytner, Adjunct<br />

Professor of Marketing at LBS. “If you<br />

can’t see any connection at all, you’re<br />

in the wrong place. Don’t expect your<br />

company to find that connection. There<br />

are many things you can – and should<br />

– delegate responsibility for in life. Your<br />

personal purpose is not one of them.”<br />

The Associate Professor of Strategy and<br />

Entrepreneurship at LBS, Dr. Ioannis<br />

Ioannou, adds: “When companies are<br />

genuinely committed to purpose and<br />

sustainability, it is reflected in their<br />

governance structure. The top of the<br />

organization sets the tone and signals<br />

a credible pledge to purpose.”<br />

ESG performance also an indicator<br />

for talent recruiting?<br />

“Responsible businesses have a governance<br />

structure that monitors and advises<br />

on environmental, social, as well as<br />

financial issues,” Ioannou continues.<br />

“When leaders understand and thrive<br />

<strong>with</strong>in the broader social and environmental<br />

context in which their businesses<br />

operate, it also signals to employees,<br />

investors, and key stakeholders how<br />

important purpose really is.”<br />

Ioannou cites Intel as a strong example<br />

in this area. The company has made<br />

social responsibility everyone’s job, <strong>with</strong><br />

clear sustainability goals. “In 2008 the<br />

leadership team took a bold step and tied<br />

environmental performance to employee<br />

compensation,” he says. “Since then,<br />

Intel has continued to rally the troops<br />

through a series of responsible competitions<br />

and sustainability projects. The<br />

winning teams receive environmental<br />

excellence awards and a pay bonus.”<br />

He advises senior executives to follow<br />

suit by setting ambitious targets and<br />

providing generous incentives that fully<br />

reflect their organization’s purpose. “You<br />

fail to send out a consistent and credible<br />

message when, for example, social<br />

responsibility is part of your company’s<br />

media rhetoric, yet only financial performance<br />

is incentivized.”<br />

Positive perception of companies<br />

declines<br />

The Deloitte Millennial Survey 2018<br />

shows a clear, negative shift in Millennials’<br />

feelings about business’ motivations<br />

and ethics. Today, only a minority of<br />

Millennials believe businesses behave<br />

ethically (48 percent vs. 65 percent in<br />

2017) and that business leaders are committed<br />

to helping improve society (47<br />

percent vs. 62 percent in 2017).<br />

There continues to be a stark mismatch<br />

between what Millennials believe responsible<br />

businesses should achieve and what<br />

they perceive businesses’ actual priorities<br />

to be – but where matches exist, the<br />

perception is that those companies are<br />

more successful, have more stimulating<br />

work environments, and do a better job<br />

of developing talent.<br />

Diversity and flexibility are key to<br />

loyalty<br />

Forty-three percent of Millennials envision<br />

leaving their jobs <strong>with</strong>in two years;<br />

only 28 percent seek to stay beyond<br />

five years. The 15-point gap is up from<br />

seven points last year. Employed Gen Z<br />

respondents express even less loyalty, >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


<strong>with</strong> 61 percent saying they would leave <strong>with</strong>in two years if<br />

given the choice.<br />

Attracting and retaining Millennials and Gen Z respondents<br />

begins <strong>with</strong> financial rewards and workplace culture; it is enhanced<br />

when businesses and their senior management teams<br />

are diverse, and when the workplace offers higher degrees of<br />

flexibility. Those who are less than satisfied <strong>with</strong> their pay and<br />

work flexibility are increasingly attracted to the gig economy,<br />

especially in emerging markets.<br />

Money still matters to Millennials<br />

Paul Polman, former CEO of Unilever, once told a businessschool<br />

audience: “You need to have something where you<br />

want to have an impact and that aligns <strong>with</strong> your values. It<br />

will drive your passion. People’s self-worth should not be<br />

measured by their net worth.”<br />

Millennials do not want to work for an organization that is<br />

driven only by profit, but nevertheless money still matters.<br />

Successful companies offer a smart mix of salary and benefits<br />

as well as a good work–life balance and leadership opportunities<br />

to attract the best talents.<br />

According to PWC’s Next Gen Survey, the new workforce<br />

generation believes in flextime and that productivity should<br />

be measured by the quality of work rather than the amount<br />

of hours spent in the office.<br />

Young workers are not ready for Industry 4.0<br />

Millennials and Gen Z recognize the current and future importance<br />

of Industry 4.0, yet many feel unprepared for the changes<br />

it will bring. Fewer than 4 in 10 Millennials (36 percent) and 3<br />

in 10 Gen Z currently in work (29 percent) believe they have<br />

the skills and knowledge they will need to thrive.<br />

While technical skills are always necessary, respondents are<br />

especially interested in building interpersonal skills, confidence,<br />

and ethical behavior – all of which they consider essential<br />

for a business to be successful. They would like business to<br />

take a lead role in readying people for Industry 4.0.<br />

So how to respond?<br />

The blogger Deirdre Pluck writes: “On an employee level, HR<br />

can achieve this by ensuring Millennials are clear about their<br />

job purpose and align their objectives <strong>with</strong> the goals of the<br />

organization. Employees who are clear about their goals and<br />

understand their purpose in the businesses are much happier,<br />

engaged, and more likely to stay <strong>with</strong> your organization longer.”<br />

Lauren Coulman is a social impact consultant. In her worthreading<br />

essay in Forbes magazine, she writes: “These kids are<br />

more financially savvy, highly entrepreneurial, and true<br />

digital natives, putting the generation that preceded them<br />

to shame in their ability to disrupt industries. Existing in a<br />

world of corporate hierarchies, political game-playing, and<br />


@ WORK<br />

Boomers<br />

Millennials<br />

Monday<br />

Tuesday<br />

Wednesday<br />

Thursday<br />

Friday<br />

9 a.m. – 5 p.m.<br />

9 a.m. – 5 p.m.<br />

9 a.m. – 5 p.m.<br />

9 a.m. – 5 p.m.<br />

9 a.m. – 5 p.m.<br />

Monday 10 a.m. – 8 p.m.<br />

Tuesday 2 a.m. – 12 p.m.<br />

Wednesday 11 a.m. – 5 p.m.<br />

Thursday 3 a.m. – 2 p.m.<br />

Friday 10 a.m. – 4 p.m.<br />

Source: thecooperreview.com<br />

36 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>





• They grew up <strong>with</strong> digitalization and are globally<br />

networked. Development and freedom of choice are<br />

extremely important values for them. (Future Institute)<br />

• They have grown up in a world where there are rampages<br />

and terrorist attacks – this leads to an abstract<br />

sense of insecurity. (The Guardian)<br />

• Millennials are often stressed. According to a recent<br />

study from the United Kingdom, 49 percent of respondents<br />

suffer from too much stress – mainly due<br />

to comparisons <strong>with</strong> others. (Mental Health Foundation)<br />

• They are a generation of heirs. However, the consequences<br />

of the financial crisis have made it more<br />

difficult for them to build up their own assets. The rich<br />

thus become richer, and the poor remain barred from<br />

social advancement. (Business Insider)<br />

• Millennials have pretty clear ideas about jobs: They<br />

demand fulfilling tasks, a secure job, a good salary,<br />

and bosses who see themselves more as coaches.<br />

(Hays)<br />

low institutional trust, what we’re really<br />

witnessing is a clash of values, and<br />

a major shift in how we operate, consume,<br />

and societally engage. With our<br />

wider social impact ranking higher in<br />

millennial collective decision-making,<br />

and purpose becoming as important as<br />

profit, working <strong>with</strong> (and not against)<br />

this new world order will inform who<br />

succeeds long-term, and the teller will<br />

be in how we perceive and respond to<br />

the change.”<br />

A passing trend or a tidal change?<br />

“Maybe we will stop talking about purpose<br />

in 10 years’ time because it will just<br />

be ingrained in any organization as a<br />

taken-for-granted – that any company<br />

that wants to be successful must pursue<br />

purpose,” says Alex Edmans, Professor<br />

of Finance at LBS. Deirdre Pluck adds:<br />

“Organizations that are not focusing on<br />

recruiting, nurturing, and engaging the<br />

Millennials of today a re putting their<br />

business at risk of losing the leaders of<br />

tomorrow.”<br />

Source: London Business School, Deloitte Millennial Survey<br />


AND ETHICS (%)<br />

Good work-life balance<br />

Opportunities to progress/be leaders<br />

Flexibility, i.e., remote working, flexible hours<br />

Sense of meaning from my work<br />

Professional development training programs<br />

The impact it has on society<br />

The quality of its products/services<br />

Strong sense of purpose<br />

Opportunities for international travel<br />

Fast-growing/dynamic<br />

A leading company that people admire<br />

Invests in and uses the latest technology<br />

The reputation of its leaders<br />

16.8<br />

13.4<br />

11.0<br />

9.3<br />

8.3<br />

6.8<br />

6.4<br />

6.2<br />

5.9<br />

4.4<br />

4.3<br />

4.1<br />

3.1<br />



43%<br />

39%<br />

25% 25%<br />

Generating jobs Improving society Generating profits<br />

Percentage of Millennials<br />

seeing as stated business<br />

priorities<br />

24%<br />

51%<br />

Percentage of Millennials<br />

seeing as actual business<br />

priorities<br />

Source: Deloitte Millennial Survey<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


igration-led<br />

Innovation<br />

The Premise of a New<br />

Social Architecture<br />

Can we count on the Marie<br />

and Pierre Curies of our time<br />

to bring their collective genius<br />

to science? Are we benefiting<br />

from the entrepreneurial spirit<br />

and thousands of jobs created<br />

by all the Hamdi Ulukayas out<br />

there? The answer is no. The<br />

way we designed our social<br />

architecture around migration<br />

is preventing many creators<br />

from contributing.<br />

By Alice Barbe, Guillaume Capelle,<br />

and Camille Soulier<br />

How can we get rid of obstacles<br />

they face on their way to innovation<br />

and entrepreneurship?<br />

It is only fair that anyone<br />

should be allowed to start a positive<br />

project. It is also a pity that our societies<br />

and economies are missing out when<br />

newcomers are not able to reveal their<br />

talents. We need new spaces and tools<br />

encouraging both newcomers and locals<br />

to find their complementarities, learn<br />

from each other, and build a brighter<br />

future, together.<br />

At SINGA, we believe in migration-led<br />

innovation and we think that the fusion<br />

economy is completely underexploited.<br />

We have created incubators, spaces, and<br />

accelerators to support ideas, projects,<br />

and super projects fitting this description.<br />

After three years, our programs have<br />

supported more than 211 companies,<br />

which have in turn created more than<br />

300 jobs. In <strong>2019</strong>, we plan to support 100<br />

more in seven European cities.<br />

Essentially, migration-led innovation<br />

comes from the ability to use one’s diverse<br />

background to identify a gap or an<br />

opportunity in the market, or use one’s<br />

experience to create a never-seen-before<br />

product. For instance, what Shaza has<br />

missed the most in her journey from<br />

Syria to France is daily contact <strong>with</strong><br />

her parents. She is working on a connected<br />

object to keep bonds alive despite<br />

the distance, beyond existing digital<br />

tools such as audio and video. Shaza<br />

is now prototyping her product <strong>with</strong><br />

the support of SINGA and a renowned<br />

university in Lyon. Abbas used to be an<br />

accountant in Afghanistan before he<br />

left for Italy, then France. His passion in<br />

life? Pizza. Abbas reinvented himself as<br />

the first at-home Pizzaïolo, bringing his<br />

oven <strong>with</strong> him to people’s homes, where<br />

he cooks and teaches small groups of<br />

friends how to make pizza <strong>with</strong> local,<br />

organic ingredients. Today, Abbas has<br />

become so popular he is turning down<br />

events and is looking to expand his<br />

38 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


“Everybody is a<br />

genius. But if you<br />

judge a fish by its<br />

ability to climb a tree,<br />

it will live its whole<br />

life believing that it<br />

is stupid.<br />

Albert Einstein<br />

business by creating<br />

training and job opportunities<br />

for other<br />

newcomers.<br />

SINGA’s inclusive approach<br />

also means<br />

that we are promoting<br />

solutions built <strong>with</strong><br />

diversity instead of for<br />

diversity – a good way<br />

to avoid local resentment<br />

and contestations.<br />

When you aim<br />

to create social innovation and business for all <strong>with</strong> people<br />

who are refugees, you include local citizens. The bridge is the<br />

best to avoid the “us” vs. “them” distinction. We are promoting<br />

a plural and evolving sense of belonging.<br />

In many ways, what we have created through entrepreneurship<br />

is contributing to a new social architecture. When you build<br />

society and economy like a house, there are people inside<br />

and outside. You design windows to look out at others. You<br />

design doors and stairs, entryways, and means to ascend that<br />

are only accessible to those privileged enough to have made<br />

it inside. You discuss how your precious food and drinks, the<br />

only available resources, can be split <strong>with</strong> new roommates<br />

<strong>with</strong>out affecting established tenants. You get into frenzied<br />

discussions over whether you should open the door or not.<br />

It is time to look at it differently. Big data, AI, and climate<br />

change challenge our definition of identity. We have plural,<br />

cross-borders, and evolutive identities. No matter our nationality<br />

or language, we can love the same sport or team, and we<br />

can commit to solving the same global issues together. We<br />

understand that migrants are not outside societies, they are<br />

also inside them. They do not come empty-handed; they bring<br />

human and intellectual wealth. Societies are not houses <strong>with</strong><br />

unwavering foundations and impenetrable walls – they are<br />

shaped on common stories and experiences. They are the results<br />

of everyday human interactions, which may lead us to inventing<br />

the new penicillin or the next sustainable energy source.<br />

SINGA is a global community of refugees, migrants, and local citizens<br />

who are meeting in the present and building the future together.<br />

SINGA implements local incubators in 20 cities of eight countries<br />

to support migration-led citizenship and innovation. In each city,<br />

SINGA creates a value chain between the community, innovators,<br />

and their local ecosystems.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />




“<br />

To get all businesses involved in solving<br />

the world’s toughest problems, we must<br />

change the accounting rules. That’s why<br />

we need to ensure that corporate reporting<br />

makes clear how a company is making its<br />

money, not just how much money it has made. For every robust,<br />

time-tested measure of return on financial capital, we need<br />

another for social capital (the economic benefits that derive<br />

from cooperation among groups), and yet another for natural<br />

capital (the supply of natural ecosystems – think forests, oceans,<br />

mineral deposits), all of which are turned into valuable goods<br />

or services in the future.”<br />

Peter Bakker, President of the WBCSD and former CEO of TNT<br />

40 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


The Curse of the<br />

Carbon Bubble:<br />

How to Really<br />

Exit the Fossil<br />

Age<br />

New Hybrid Financial<br />

Engineering for a Low-carbon<br />

Economy in the 21st Century<br />

Prof. Dr. Dr. Stefan<br />

Brunnhuber<br />

Professor for Sustainability<br />

and Psychology<br />

Member of the Club of Rome<br />

Introduction<br />

The world has changed. We are now<br />

living in a new era – the Anthropocene<br />

– where everything is connected. At the<br />

same time, we are operating <strong>with</strong>in<br />

geophysical planetary boundaries and<br />

face increasing levels of complexity, uncertainty,<br />

and acceleration. Such a “full<br />

world” confronts us <strong>with</strong> the challenges<br />

of asymmetric information, increased<br />

unwarranted liabilities and maturities,<br />

and uncontrolled feedback loops, which<br />

lead to vast direct and indirect costs<br />

and expenditures for damage control,<br />

spillovers, and negative externalities.<br />

What does this mean for the financial<br />

sector? The search for a new planetary<br />

balance will change our investment<br />

strategies, risk analyses, consumption<br />

patterns, political decision-making, and<br />

the way we do business. In fact, it will<br />

change everything – even our minds<br />

and consciousness. In the following,<br />

we address the prominent role of the<br />

financial sector as one of the key players<br />

in this shift. New financial engineering<br />

will be required as we move toward a<br />

new equilibrium.<br />

Eighty percent of our world economy<br />

depends on fossil fuels. On a global scale,<br />

this percentage has not changed since<br />

1971. However, <strong>with</strong>in this time period,<br />

total primary energy consumption has<br />

tripled in absolute terms. Fossil fuels generate<br />

CO 2<br />

emissions that lead to global<br />

warming, and global warming is now<br />

considered to be the single largest threat<br />

to humanity. Robust scientific evidence<br />

has shown that going beyond the “2<br />

degree scenario” (2DS) will cause huge<br />

disruptions to our planet in the form of<br />

extreme weather patterns and the loss<br />

of biodiversity and natural habitats. It<br />

will significantly affect human life due<br />

to forced migration, the rise in uninhabitable<br />

regions, and food insecurity<br />

42 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


due to harvest loss, to name but a few factors. Although we<br />

have traditionally used a linear perspective to look at future<br />

trends, we will increasingly find ourselves confronted <strong>with</strong><br />

non-linear tipping points, where no return to the earlier status<br />

quo is possible.<br />

If we take the 2DS as a political benchmark, then the so-called<br />

carbon bubble represents the financial correlate to this scenario.<br />

It will affect approximately $23–100 trillion in assets<br />

over the next two decades. This large range in estimation is<br />

related to the extent to which the fossil fuel value chain is<br />

taken into account. Of the 3 billion tons of fossil reserves still<br />

available on this planet, only 500 million tons can be used<br />

before reaching the estimated carbon limits of the 2DS. The<br />

rest of the fossil fuel reserves consist of stranded, unburnable<br />

assets that need to remain in the ground. In statistical<br />

terms: If we want to remain <strong>with</strong>in the 2DS <strong>with</strong> 90 percent<br />

certainty, there is in fact no planetary carbon budget left, even<br />

<strong>with</strong> future food production and deforestation calculated in.<br />

This means that most listed companies will have to depreciate<br />

their balance sheets by up to one-third or more. Institutional<br />

investors <strong>with</strong> skin in the game in assets that are dependent<br />

upon fossil fuels will be forced to write off substantial parts<br />

of their investments.<br />

Flogging a dead horse<br />

This will relatively quickly lead to a depreciation of large<br />

cohorts of pension funds and privately funded social security<br />

systems, in particular those of the Baby Boomers. But as long<br />

as no alternative scenario is available, rational investors will<br />

stick to their assets as long as possible and resist change –<br />

even if the horse they are flogging is dead. In the period up<br />

until 2017, only $2.5 trillion of the estimated $23–100 trillion<br />

carbon bubble was divested. What we need is a different<br />

perspective on how to invest in the future.<br />

The six-pack<br />

The carbon bubble is part of a larger picture, expressed in the<br />

2015 UN Sustainable Development <strong>Goals</strong> (SDGs). A lot has<br />

been written about the SDGs, but little about how to finance<br />

them. Calculations demonstrate that the world community<br />

requires an additional $4–5 trillion every year to finance our<br />

future. About one-third of the goals are eligible for private<br />

investments, while two-thirds refer to the global commons.<br />

If we had endless time, our options would be unlimited. We<br />

keep pretending that we are in such a situation – but we are<br />

wrong. We have 10–15 years, at most, to significantly >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


change the course of this planet for the better or for the<br />

worse. We do not have limitless time for academic discussions,<br />

further field studies, randomized controlled trials, or<br />

political propaganda or maneuvering, nor for endless expert<br />

panels or manipulated fake news campaigns. As our time is<br />

restricted, our options are limited, too, and we will have to<br />

carefully choose the tools and interventions that have the<br />

highest likelihood of changing the course of this planet for<br />

the better. We may also have to make bold decisions and<br />

adopt a multi-step approach to enable the world community<br />

to shift toward a more sustainable future. The longer we wait,<br />

the more limited the options and the smaller the window for<br />

opportunities will become. In the following, we introduce<br />

the so-called financial six-pack. It provides a rationale for<br />

operating <strong>with</strong>in the given limits and will allow us to shift<br />

our society toward a sustainable model, ensuring the survival<br />

of our grandchildren and great-grandchildren.<br />

Regulation – harmonization – transparency<br />

Taxation, fees, and subsidies<br />

Impact funding<br />

Ex-swap strategies<br />

Private–public partnerships / private-citizen partnerships<br />

Parallel currencies<br />

List 1: The financial six-pack<br />

In the following, we describe the six most relevant financial<br />

engineering tools required to finance our future. They are<br />

structured like a staircase (see graph below). The staircase<br />

follows the following rationale: The more time we have available<br />

and the more strongly our world is built on multi-lateral<br />

agreements, the more we will be able to favor the lower steps.<br />

The less time and the more multipolar and bilateral our world<br />

becomes, the higher we will have to climb up those stairs and<br />

the more we will be forced to favor bold and unconventional<br />

monetary and financial decisions in order to put a more sustainable<br />

common future in place. Whereas there is increasing<br />

literature and empirical evidence concerning the lower steps,<br />

there is less awareness about the upper steps of our staircase.<br />

In fact, a “tragedy of the horizon,” as Mark Carney coined it,<br />

is associated <strong>with</strong> the issue. <strong>Global</strong> warming and its associated<br />

risks imply a time lag of 25–30 years between the initial carbon<br />

emission, the resulting climate impact, and the discount<br />

of any future impact. In short, the future will be over before<br />

it has even started. As neither the Paris Agreement nor the<br />

SDGs contain any politically binding criteria, a multi-step<br />

approach is required.<br />

Regulation – harmonization – transparency<br />

Since 2008 in particular, efforts to regulate the international<br />

payment and trading system have gained momentum. Most,<br />

if not all, academic and political attention has focused on<br />

regulatory efforts that seek to avoid, prevent, and manage<br />

future crises. There is general agreement that financial crises,<br />

especially idiosyncratic ones, cannot be predicted, and that<br />

systemic crises require additional regulatory effort to insulate<br />

the real economy from these more intrinsic perils. There has<br />

been a wealth of proposals, most of which focus on singular<br />

codes of conduct and rules, and some of which suggest replacing<br />

the entire system <strong>with</strong> an alternative – past examples<br />

include the Chicago Plan in the 1930s, the introduction of the<br />

gold standard, and its abandonment in the 1970s.<br />

Discussions cover aspects such as greater transparency and<br />

accountability; increase in the level of sound regulations;<br />

international cooperation and reinforced institutions; Basel III<br />

(plus); the recapitalization of the International Monetary Fund<br />

and the World Bank; a shift to more macro-prudential policy<br />

tools; and more surveillance strategies such as early warning<br />

exercises, mutual assessment programs, and peer reviews.<br />

This debate also refers to a variety of contributions on a different<br />

set of risk assessments, such as market-to-model versus<br />

market-to-market; the “too big to fail” argument; bonus programs<br />

for top managers; the impact of bail-in strategies along<br />

a liability cascade and contagion effects (from stock owners to<br />

borrowers to clients to the taxpayer); whether ratings agencies<br />

should serve as a public good, and so on. This list is not<br />

complete and not fully updated, as regulatory efforts since<br />

2008 alone would have filled a volume of some 35,000 pages.<br />

This process has also not come to an end. The argument on<br />

regulatory efforts needs to be more general and fundamental:<br />

Is regulating the monetary system currently in place the best<br />

way to achieve a maximum of output <strong>with</strong> regard to resilience,<br />

efficiency, and sustainability? Regulatory efforts always tend<br />

to be behind the curve, despite their ability to adapt to historical<br />

events. What if all these regulatory efforts produce a<br />

false sense of control over manifest reality? What if all these<br />

preventive regulatory efforts fail? What if regulation of the<br />

given system is a suboptimal, even wrong approach, like trying<br />

to put toothpaste back into the tube, making the overall<br />

system even less resilient to future adverse shocks?<br />

If we cannot predict idiosyncratic and random crises and events<br />

like black swan effects but want to stop them from becoming<br />

44 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


systemic risks, then regulating the given system may produce<br />

only limited results. It is somewhat like operating on the heart<br />

of a runner in an “Iron Man” competition while he is actually<br />

running. However, regulation has a moral and economic point<br />

to consider: A completely unregulated market is like forcing<br />

your six-year-old child to work on the streets shining shoes<br />

instead of going to school and becoming an MD, a teacher, an<br />

engineer, or a physicist. When we constantly regulate a system,<br />

we admit that we are unable to rely on the self-regulating or<br />

autopoietic power of the given, and thus implicitly admit that<br />

there is something wrong <strong>with</strong> the system’s design. Regulation<br />

is just the first step up the staircase.<br />

The beauty of taxation, fees, and subsidies<br />

There are dozens of very clever and thoughtful taxation schemata<br />

on how to refinance social and ecological goods and<br />

invest in the commons. The debate of the last 50 years has<br />

demonstrated the intellectual power of these schemata. With<br />

the high growth rates during the post–World War II period<br />

in particular, redistribution mechanisms involving fees and<br />

taxes successfully provided additional sources of revenue and<br />

income to finance social and ecological projects and public<br />

infrastructure. However, although times of high growth are<br />

now past, redistribution via taxation and fees has become more<br />

and more critical in a worldwide context. For example, if the<br />

poorest 20 percent of Scandinavian citizens are richer than the<br />

richest 20 percent in developing countries, the well-established<br />

and conventional way of redistributing money through taxation,<br />

fees, and subsidies becomes, at its best, one political tool<br />

among others, but it is not the tool to finance our future.<br />

To further clarify the argument: Most financial experts and<br />

academics agree that a carbon tax is the best redistributive<br />

measure. Theoretically, it would be the mechanism to shift<br />

corporates, consumers, and states away from the fossil age<br />

toward a low-carbon-oxid economy. But the argument has several<br />

flaws. Firstly, implementing a carbon tax would require a<br />

high level of global consensus, as states and corporates would<br />

otherwise be incentivized to avoid the tax. Secondly, a carbon<br />

tax would have a massive impact upon the entire value chain.<br />

Currently, the average barrel of crude oil costs around $10. To<br />

remain <strong>with</strong>in the 2DS, a barrel would need to cost around<br />

$75–100, and this increase would need to happen <strong>with</strong>in<br />

the next 10–15 years. This means that most products along<br />

the value chain would face massive price and cost pressures<br />

<strong>with</strong> hugely disruptive social consequences, which are next<br />

to impossible to anticipate. >><br />

Sustainability<br />

accomplished<br />

80%<br />

System level<br />




Transformation curve<br />

20%<br />

by proxy sector<br />

value chain<br />

SCR & ESG criteria<br />

efficiency – adjustment – avoiding –<br />

rethinking – reducing – replacing –<br />

recycling<br />

lifestyle changes and modification –<br />

agricultural reforestation<br />

system –<br />

infrastructural changes<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


In other words, the dilemma is the following:<br />

We have to increase carbon tax<br />

and reduce the direct and indirect subsidies<br />

for all fossil energy, which will<br />

make it possible to lower CO 2<br />

emissions<br />

in the atmosphere on a global level. At<br />

the same time, we have to reduce the<br />

tax burden and increase subsidies for<br />

renewables on a local and global level.<br />

Both of these strategies interfere <strong>with</strong><br />

social and ecological tradeoffs on the<br />

local and global levels, such as overcoming<br />

poverty and hunger and protecting<br />

biodiversity, among other things. In such<br />

a complex, mixed, and unforeseeable<br />

situation, technology, taxation, subsidies,<br />

and regulation are part of the solution,<br />

but they are not the solution. Focusing<br />

only on taxation and regulation overlooks<br />

the speed, volume, and magnitude<br />

required to ensure the shift. Instead,<br />

it generates endless “socio-ecological<br />

paradoxes” and forces us to engage in<br />

multilevel re-regulatory efforts to compensate<br />

for unwanted social impacts.<br />

Such paradoxes are created when we<br />

want to do good and avoid harm, but they<br />

create the exact opposite. For example,<br />

if a nation representing 3–4 percent of<br />

the global burden of atmospheric CO 2<br />

decides to exit the fossil age, the shock<br />

caused by the drop in demand for fossil<br />

fuels would trigger a decrease in the<br />

prices of fossil fuels for the rest of the<br />

world, leading to increased consumption.<br />

The impact of impact funding<br />

Ratings are a tricky problem. On the one<br />

hand, it is crucial that we learn to differentiate<br />

between green and “brown” or<br />

“black” investments. However, studying<br />

corporate reality reveals that, on average,<br />

about 20 percent of all tangible and intangible<br />

assets as well as short-term and<br />

long-term spillovers can be managed and<br />

mitigated <strong>with</strong>in the corporation only.<br />

Anything above this would cause the<br />

business to collapse. We can differentiate<br />

between three levels.<br />

1. SCR and ESG criteria on a<br />

corporate level.<br />

2. Sector level that implies value<br />

chains, customers, and clients as<br />

well as the social and ecological<br />

environment by proxy.<br />

3. Systemic level. This requires a shift<br />

in the incentives to make it happen.<br />

List 2: Ratings are tricky: from SCR<br />

to sector to system<br />

Corporate profits are near record highs<br />

but are realized on the basis of huge,<br />

unpriced, negative externalities. Such<br />

negative externalities are transferred to<br />

TAXONOMY is key to ensuring private equity<br />

impact-funding. There are initiatives by different stakeholders<br />

(NGOs, politics, the corporate world, science)<br />

<strong>with</strong> different interests and objectives that have to be<br />

reconciled. Essentially, we require a matrix that allows<br />

us to evaluate, measure, and compare the entire expenditure<br />

of human economic activities. This includes a<br />

“total costs analysis” upstream and downstream along<br />

the value chain; integral accounting; improved comparability<br />

for mergers and acquisitions; and measuring<br />

and evaluating the impact not only on profit, but on<br />

human wealth in general. In addition, we need a relative<br />

benchmarking for different sectors (such as aluminum,<br />

cement, agriculture) and between sectors, facilitating<br />

comparability as well as improving corporate decisions<br />

(de-risking) and public awareness on different levels<br />

(OECD, EU, G7, G20). Finally, we need an enabling<br />

environment for harmonized regulation and taxation<br />

that would set up a new global accounting system for<br />

every agent involved. Initiatives such as these that seek<br />

to better incorporate natural, social, and human capital<br />

have been around for at least 30 years. However, most<br />

of them already failed at the stage where the different<br />

stakeholders provide completely different views on<br />

the topic. For example, international accounting firms<br />

already have different opinions on how to evaluate and<br />

measure an upstream impact of child labor or water<br />

pollution on the corporate balance sheet. We might end<br />

up <strong>with</strong> three findings: relative banning, relative benchmarking,<br />

and single case-to-case approaches.<br />

tax payers and governments. Disruptive<br />

and involuntary system changes can lead<br />

to unprecedented suffering and costs.<br />

Any change by design is better than by<br />

disaster. We have to differentiate between<br />

the sign and symptoms on the one<br />

hand, and the overall root causes on the<br />

other. Whereas ranking refers to symptoms<br />

in the form of further transparency,<br />

information, and documentation, the<br />

root causes lie in the monetary system<br />

itself. A system change such as this does<br />

not mean that we have to do everything<br />

all at once at the same time, but we do<br />

have to consider (almost) everything to<br />

ensure this integral change.<br />

Generally speaking, investing in something<br />

is a commitment to the future and<br />

46 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


“impact investments” even more so because they consider not<br />

only the returns in terms of money, but also the “impact” such<br />

an investment can have upon social and ecological perspectives.<br />

The higher the impact, the better. In 2017, the value of<br />

such impact funds – where capital is primarily divested from<br />

the fossil sector into the green sector – totaled $250 billion.<br />

The taxonomy of impact funds (brown or black versus green)<br />

differentiates between good and bad investments in relation<br />

to their impact on social and environmental welfare (a “good”<br />

investment would involve no tobacco, no weapons, no coal,<br />

no alcohol, no child labor, etc.). In this respect, impact funding<br />

is the right choice. However, several aspects demonstrate<br />

that the matrix underlying impact funds is flawed. Firstly,<br />

the volume of funding is far too low and the speed too slow<br />

to guarantee any significant shift. Secondly, the approach is<br />

too silo and too micro, maximizing the interests of lobbies<br />


historically have high yields ranging<br />

between 19 and 25 percent annually.<br />

In a world where GDP grows by<br />

2–3 percent and private investors<br />

demand 10 times more, this revenue<br />

has to come from somewhere.<br />

In fact, most of it comes directly or<br />

indirectly from the lack of financing<br />

for public goods. This means that instead<br />

of funding public preschooling<br />

and collective healthcare; protecting<br />

against pollution; eradicating poverty<br />

and hunger; and averting the<br />

collapse of biodiversity, the money<br />

instead goes into the private sector,<br />

where “high-net-worth individuals”<br />

realize additional returns. A 19–25<br />

percent return for private equity,<br />

even <strong>with</strong> additional impact funding,<br />

is an unrealistic scenario in a world<br />

where the wealth gap is increasing<br />

and public common goods are underfunded.<br />

Private equity is a small<br />

part of the solution, but it is not the<br />

solution.<br />

<strong>with</strong>out seeing the full picture on a macro level, which has<br />

to balance and reconcile the many different interests <strong>with</strong><br />

each other. Thirdly, the impact funding strategy is skewed<br />

toward parts of the world <strong>with</strong> higher environmental, social,<br />

and governance (ESG) standards. This occurs at the expense<br />

of more vulnerable regions on the planet, where liquidity is<br />

most needed. Fourthly, the shift toward green bonds will put<br />

a risk premium on the old brown and black bonds, which<br />

will make conventional investors resistant to changing their<br />

portfolios or encourage them to simply greenwash their assets.<br />

All of this together will create further regulatory and<br />

documentation efforts and do little to nothing to change the<br />

negative impacts on the environment.<br />

Impact funds remain a complex, well-nigh unresolved story<br />

of excluding or banning industries. There is even a strong argument<br />

for remaining invested in critical industries in order<br />

to keep control over the executive management and steer<br />

it toward greater social corporate responsibility and higher<br />

ESG standards. Whereas theoretically the difference between<br />

a “green,” a “brown” (fossil), and/or a “black” (guns, drugs,<br />

alcohol, child labor) investment is easy to make, in practical<br />

terms such a taxonomy has to take into account all the different<br />

business models and corporate shares and interconnected<br />

corporate participation. In short: Are Volkswagen and Apple<br />

green or brown? Are SAP and Deutsche Bank green, brown, or<br />

black? Those corporates that fail to achieve the “green” label<br />

will <strong>with</strong>draw their collaboration, as they might have to pay<br />

a higher risk premium on their assets. Finally, the strategy<br />

behind impact funding leaves the 2DS almost untouched, as<br />

we see below.<br />

Private vs. public financing of the commons<br />

From an investor’s perspective, agents who invest in state<br />

bonds, pension funds, and/or private equity and who are<br />

engaged in impact funds represent clients’ selective interests.<br />

These interests are fundamentally mismatched <strong>with</strong> those of<br />

the global commons. Financing the SDGs requires an agent<br />

or co-signer <strong>with</strong> provision and revenue interests representing<br />

the global commons themselves. The United Nations, the<br />

World Health Organization, and the World Bank are three<br />

examples of such agents. In addition, the more connected<br />

we are, the more we need to invest in common goods. A real<br />

initial impact investment honors the fact that the commons<br />

come first and private investment second; it honors the fact<br />

that taxation, fees, donations, and other forms of redistributive<br />

financing are too slow in speed and too low in volume to >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />



allows for a long-term perspective, especially in critical infrastructure<br />

such as energy, health, education, and telecommunications.<br />

In 2017, $90 billion was contracted globally, down<br />

from a peak in 2012 of $140 billion. The World Bank advisory<br />

offers blueprints and guidance on how to contract private- and<br />

public-sector interests. However, the devil is in the details.<br />

De-risking is the major issue, where both sides have to clarify<br />

who is going to take the risk in the case of “force majeure,”<br />

such as natural catastrophes, terrorism, or state failure. Who<br />

is the insurer of last resort? How to determine payments,<br />

and who is fully and who is partly compensated? What is the<br />

very nature of the financial assets (bond, bank financing, or<br />

corporate financing)? The International Center of Settlement on<br />

Investment Disputes associated <strong>with</strong> the World Bank seems to<br />

be just one institutional alternative among others. In order to<br />

de-risk the project for the private sector and make it bankable<br />

for the public sector, both sides have to give in: The private<br />

sector has to surrender its high-yield expectations and its shorttermism,<br />

and the public sector has to tackle corruption and<br />

bad public management. There is currently a tendency toward<br />

partisanism and to advocate for private-sector money instead<br />

of public procurements.<br />

ensure the required change. Financing<br />

of the commons should not be a transitory<br />

measure in the case of economic<br />

crises, but rather a constant monetary<br />

intervention to ensure ongoing societal<br />

transformation toward a sustainable<br />

future.<br />

From derivatives to hybrid ex-swaps<br />

During the last two decades, derivatives<br />

were the new kids on the block. In an<br />

unstable economic environment, it was<br />

rational for investors to buy first-, second-,<br />

or third-tier derivatives in order<br />

to reduce the risk of failure. The “hot<br />

potato” could be handed over to someone<br />

else, and at the end of the day, someone<br />

always paid the bill – mostly taxpayers.<br />

These times are over. The greater<br />

the extent of our global interconnection<br />

and the more a risk is identified<br />

as systemic, the less a derivative can<br />

help leverage or hedge the investment.<br />

Put the other way around: As long as a<br />

risk remains local or sectoral, a derivative<br />

is a rational instrument to hedge<br />

microeconomic risks. This is because<br />

diverging expectations regarding a risk<br />

can be leveraged by buying a derivative.<br />

However, the rise of our global interconnectedness<br />

causes risks to be shared at a<br />

systemic level, where they can no longer<br />

be geographically or sectorally isolated.<br />

Future expectations such as pricing in<br />

the impact of global warming will be<br />

more likely to converge than diverge.<br />

This explains the increase in asymmetric<br />

shocks, where the agents in question did<br />

everything right, but still they were hit by<br />

the unexpected consequences of negative<br />

feedback loops and fat tail events, all of<br />

which have widespread repercussions. In<br />

this situation, using a derivative of any<br />

sort is an irrational financial decision<br />

because rather than reducing risks, they<br />

produce further systemic risks and lead<br />

to additional costs. A rational investor<br />

in the era of the Anthropocene fully<br />

understands this risk assessment, and<br />

therefore requires a different financial<br />

environment in order to become invested.<br />

NIMBY (not in my backyard)<br />

When the Vatican, for example, switches<br />

from brown to green investments, it<br />

clears its own balance sheet. However,<br />

the situation in the real world has not<br />

changed at all, because the brown or<br />

black investments – for example a coal<br />

site, mine production, or child-laborintensive<br />

products – from which it has<br />

divested will still pollute the air and kill<br />

humans. Nor will this divestment change<br />

the working conditions for the children,<br />

whose labor will now be under different<br />

management that may be less competent<br />

than the former. This hot potato will<br />

thus be handed on repeatedly, but the<br />

ecological and social impacts will remain<br />

unchanged. In an unstable, non-linear<br />

complex scenario, only a so-called exswap<br />

asset makes sense: Swap the asset<br />

48 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


and close down and exit the previous one<br />

as fast as possible to avoid asymmetric<br />

shocks, non-linear feedback loops, and<br />

increasing costs of damage control.<br />

If such a global exchange bond or a global<br />

swap were created – where brown fossil<br />

fuel investments could be swapped for<br />

large-scale green investments – companies<br />

and investors would not face<br />

extinction but rather experience a very<br />

steep transition to different types of<br />

investments and businesses. These largescale<br />

projects could include things such<br />

as reforesting the Sahara, the electrification<br />

of Africa, and many others that have<br />

been outlined by various organizations.<br />

To overcome shareholder-value maximization,<br />

most ex-swap assets require a<br />

contract <strong>with</strong> the public sector, providing<br />

a co-signer <strong>with</strong> a long-term perspective.<br />

<strong>Global</strong>ly, 200 fund managers manage $47<br />

trillion in assets, which is more than 50<br />

percent of global GDP. So, if we want to<br />

gain momentum for a change toward<br />

a low-carbon economy, we need to get<br />

these 200 fund managers in one room<br />

and tell them what to do.<br />

Hybrid private–public partnerships<br />

(hy-PPPs)<br />

The standard argument is that we have a<br />

lot of liquidity in the market. We simply<br />

have to create an environment that will<br />

enable private investors to make green<br />

investments. Indeed, there are close to<br />

$300 trillion in financial assets, in which<br />

institutional investors hold about $150<br />

trillion assets under management. Yet,<br />

less than 2 percent is invested in infrastructure<br />

or common goods, and about<br />

10 percent of investments have negative<br />

yields. If we think this proposal through<br />

to its end, we will end up living in a<br />

privatized world: The investors’ interest<br />

is to provide as much purchasing power<br />

as possible to fuel the consumption level<br />

of the Baby Boomer generation of the<br />

Western world. This is indeed a feasible<br />

scenario for about one-third of the SDGs,<br />

but not for the other two-thirds – these<br />

are (global) commons and require an<br />

entirely different financial approach to<br />

ensure our common future. One way to<br />

guarantee the financing of the commons<br />

is a co-signer principle, <strong>with</strong> a different<br />

public and a common protagonist’s skin<br />

in the game – a protagonist following<br />

a different agenda than privatizing the<br />

world. The federal public sector and<br />

the international multilateral development<br />

banks (European Investment Bank,<br />

World Bank, Asian or African Development<br />

Banks) are such candidates.<br />

In a fully connected world, there is no<br />

private <strong>with</strong>out public – there are more<br />

and more hybrids. In fact, this situation<br />

requires a closer look <strong>with</strong> regard to the<br />

agents and protagonists involved. In a<br />

country <strong>with</strong> a low income level, a low<br />

tax base, low tax-collection levels, and<br />

a high debt burden, there are a variety<br />

of possibilities for the private and<br />

public sectors to generate additional<br />

liquidity to finance public goods. Each<br />

possibility follows a different protocol,<br />

risk assessment, liability, and type of<br />

politics. Done the right way, they reverse<br />

short-termism toward a long-term view,<br />

reverse maturity toward long-term yields,<br />

and honor and foster the relevance of<br />

public goods and infrastructure for a<br />

common sustainable future.<br />

Take the generally accepted UN human<br />

right for access to fresh potable water for<br />

every human being. Should we privatize<br />

this right so that all freshwater springs<br />

become a private equity and these equities<br />

are then sold to humans <strong>with</strong><br />

private yields, which then increases the<br />

wealth of the owners of those springs?<br />

As more than 500 million people do not<br />

have access to fresh water, the owners<br />

of these springs would have to be taxed<br />

to generate sufficient revenue to ensure<br />

that those 500 million can exercise their<br />

right to access drinking water. Instead<br />

of this linear process of privatizing the<br />

commons and taxing the private yields,<br />

we could start creating hy-PPPs, where<br />

5 percent of the assets are private and<br />

95 percent public, for example. The<br />

public money comes from a monetary<br />

source in the form of parallel green<br />

additional liquidity (earmarked for this<br />

specific right, see details below). This<br />

combination can bring private entrepreneurial<br />

expertise and risk assessment<br />

together <strong>with</strong> a public co-signer (such as<br />

a governmental body or an international<br />

development bank). Yields, maturity,<br />

liability, and risks are split respectively,<br />

and both agents (private and public)<br />

have a long-term interest, creating a<br />

win-win situation <strong>with</strong> constant private<br />

revenue and more healthy people while<br />

meeting public interests at the same<br />

time: There will be fewer negative social<br />

spillovers, such as healthcare costs for<br />

the treatment of diarrhea. A healthier<br />

population is able to attend school, do<br />

business, pay taxes, extend their lives,<br />

and increase their own wealth and the<br />

wealth of nations in parallel. This is<br />

true for all global commons: fresh air,<br />

access to basic healthcare, schooling,<br />

protecting biodiversity, and reversing<br />

global warming, among others.<br />

A common is a common and remains a<br />

common as soon as we, as a world community,<br />

declare it a common. Private<br />

equity is private equity as soon as we, as<br />

a world community, declare and define it<br />

as a private asset. However, the financial<br />

tools for achieving both are different.<br />

Financing the commons as commons<br />

requires an entirely different approach<br />

than turning them into private equity.<br />

Do we want to live in a fully privatized<br />

world? No, we do not. Instead of >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


violating the nature of the commons, we should adopt the<br />

financial architecture to the nature of the commons and not<br />

the other way around. This requires a shift in our mindset and<br />

a shift in the architecture of our monetary system.<br />

End-of-pipe financing and redistributive measures<br />

The most commonly advocated form of financing for our commons<br />

is so-called cofinancing, which constitutes the core argument<br />

in most, if not all, economic proposals on financing the<br />

social and ecological commons. So far, the staircase has been<br />

following this rational. Cofinancing has the following rationale:<br />

Goods and services freely traded on the market are taxed, and<br />

this revenue becomes the main source of finance for common<br />

goods. In this widely accepted view, the commons are secondary<br />

and subordinate to the activities of the free market. Only<br />

when the market generates sufficient yields and liquidity and<br />

the political will is strong enough are common goods eligible to<br />

be financed. This cofinancing strategy is a form of end-of-pipe<br />

technology, well known in engineering science: We first implement<br />

a technology, lifestyle, or economic activity that harms<br />

our environment (e.g., polluting fresh air), then add a filter at<br />

the end of the process (i.e., at the end of the pipe) in order to<br />

avoid too much damage. The cofinancing strategy follows the<br />

same rationale. The economy grows first, we take a certain<br />

amount of money (through tax or fees) from the added value<br />

chain, and finally distribute it to social and ecological projects.<br />

Parallel currencies<br />

So far, we have been working our way up the six-pack ladder,<br />

defining new financial engineering in the Anthropocene. One<br />

step – probably the biggest one – is still missing: a parallel<br />

currency system. This is necessary because the first five steps<br />

are unable to guarantee the volume of liquidity required and<br />

the speed we need to generate sufficient purchasing power. A<br />

parallel currency system is about additional, optional, targeted<br />

liquidity or purchasing power, running in parallel to the given<br />

system, designed (partly) differently to the well-established<br />

monetary system. It uses new technology (mainly distributive<br />

ledger technology) <strong>with</strong> a smart contract, earmarked to<br />

(mainly) finance our global commons and operate through<br />

complementary monetary channels. This mechanism would<br />

make it possible to steer economic decision-making, stabilize<br />

the overall economy, and orient our entire society toward a<br />

sustainable future in a coordinated way.<br />

A parallel currency system could be implemented through new<br />

third- or fourth-generation blockchain technology in digital<br />

form only, competing <strong>with</strong> bank deposits and conventional<br />

cash money as a medium of exchange, a store of value, and<br />

an international unit of account. It would operate in parallel<br />

to existing currencies and be eligible for the payment of<br />

taxes and wages. Such green “central bank digital currencies”<br />

do not settle wholesale inter-bank payments like reserves do,<br />

nor do they provide anonymity like cash does – they have a<br />

larger direct impact on the retail markets. They can achieve<br />

a significant welfare effect through targeted and earmarked<br />

outputs. This can happen through three alternative channels.<br />

Firstly, it can serve as a “citizen dividend,” whereby the additional<br />

money is given to private households either directly<br />

or via tax reductions, stimulating consumption. Secondly,<br />

the money is given to the public sector, stimulating public<br />

infrastructure (education, security, health). Besides this “public<br />

channel,” there is another, third channel. Here, the money is<br />

given to NGOs, SMEs, or local community organizations. In<br />

the traditional perspective, we generate unspecific, expansive<br />

growth in a first tier and then battle <strong>with</strong> regulatory efforts<br />

and transfer payment systems (fees and taxation) to generate<br />

enough money to finance ecological and social projects in a<br />

second tier. In this new approach, the money is distributed first.<br />

It is this pre-distributive design rather than a redistributive<br />

mechanism (end-of-pipe financing) that has the potential to<br />

shift and transform our entire society, moving it in the right<br />

direction. It will increase the overall welfare effect in the form<br />

of millions of green jobs, fewer illicit transactions, additional<br />

green growth, an enlarged green tax base, and reduced costs<br />

for negative spillovers and disaster management, among others.<br />

Such a parallel optional currency mechanism would provide<br />

targeted, programmable, identifiable, recordable financial<br />

transactions and earmarked and dedicated funds, avoiding<br />

fraud and corruption. This would create a new parallel marketplace<br />

for the 75 percent of the world population that has not<br />

been benefiting from the existing operating model. This new<br />

mechanism would also eventually become intertwined <strong>with</strong><br />

the traditional sector and would provide central bankers <strong>with</strong><br />

an additional monetary tool to achieve price stability, employment,<br />

and the global commons at the same time. The residuum<br />

left – meaning the additional liquidity injected through this<br />

mechanism – is determined by whether, and to which extent,<br />

the previous five steps of the six-pack have been completed.<br />

The multi-step approach to a sustainable future: the six-pack<br />

To note: In this perspective, the higher the global consensus<br />

is on the lower steps, the lower the necessary effort will be<br />

for all further steps. For example, if we can come up <strong>with</strong> a<br />

global agreement on regulating tax havens, common accountings<br />

standards, harmonized ESG criteria, and a global carbon<br />

tax, we may end up <strong>with</strong> less need for ex-swap asset strategies,<br />

public contracting, and a parallel currency system. The lower<br />

the level of global consensus achieved on the lower steps, the<br />

bolder the decisions will have to become on the higher steps.<br />

Assuming that we end up <strong>with</strong> next to no global governance<br />

consensus but still want to finance our future, we will have<br />

50 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


to make the effort to install additional<br />

parallel liquidity to ensure the transition<br />

from a high-carbon society to a<br />

low-carbon one.<br />

Conclusion<br />

What is required is an exit strategy aiming<br />

for a rapid phase-out of high carbon<br />

emissions and socially critical projects<br />

that not only guarantee the end of our<br />

high-carbon-oxid economy, but also<br />

lay out a plan to shift to a low-carbon<br />

economy, while consolidating existing<br />

collaterals such as pensions, private insurances,<br />

and so on. This procedure<br />

requires a new financial mechanism<br />

that differs from the approaches taken<br />

in the past, such as hedging, leveraging,<br />

and derivatives.<br />

The scope, speed, scale, and symmetry<br />

(4-S) of the challenges ahead should<br />

match the 4-S of the solutions. Unprecedented<br />

action must be taken, or we<br />

will have to bear unprecedented consequences.<br />

Thinking the unthinkable will<br />

be the most advantageous and rational<br />

strategy. A successful risk analysis requires<br />

overcoming the executive myopia<br />

and linear thinking predominant in<br />

corporate and public leadership, beyond<br />

the “least drama” and “lowest common<br />

denominator” scenarios. These “business<br />

as usual” scenarios have simply become<br />

far too expensive. What is required instead<br />

is an emergency-like transition to<br />

a post-fossil era. Finding the fastest and<br />

least disruptive way to do this is key, as<br />

time is not on our side. The new financial<br />

mechanisms described will make the<br />

world safer, more resilient, more foreseeable,<br />

and more certain. Traditionally,<br />

we have gone to vast lengths to regulate<br />

the given system <strong>with</strong> taxed economic<br />

activities and increased charity, philanthropy,<br />

and private pledges, and we have<br />

redistributed that money to social and<br />

environmental projects – <strong>with</strong> reasonable<br />

but insufficient results.<br />

To conclude, the multi-step approach of<br />

regulatory efforts – including stress tests;<br />

agreed accounting systems; total costs<br />

approaches; wise taxation and steered<br />

subsidies; private-impact funding <strong>with</strong><br />

relative benchmarking; a negative ban<br />

list and case-to-case management; new<br />

ex-swaps that guarantee the phasing out<br />

of the fossil age; and hy-PPPs, which allow<br />

for a longer-term perspective – will<br />

finally achieve the necessary but hitherto<br />

lacking liquidity and purchasing power<br />

through a parallel currency system. All<br />

steps together provide the rationale for<br />

such a multistakeholder approach.<br />

If we consider the timeline of 15 years,<br />

the magnitude and additional volume<br />

required ($4–5 trillion annually) and<br />

the fact that half of the world population<br />

is living in either autocratic systems or<br />

failed states, achieving a global democratic<br />

mandate seems unrealistic. We<br />

require a bold and unorthodox approach<br />

on how to finance our future. Considering<br />

further the little leverage available<br />

on a corporate and sectoral level and<br />

the high amount of leverage possible<br />

through a systems change, there are six<br />

steps we have to accomplish as a world<br />

society. If we do this in a smart way, we<br />

will generate a situation beyond the<br />

tradeoff between social and environmental<br />

challenges: We will end up <strong>with</strong><br />

millions of jobs, a cleaner environment,<br />

and a better place to live. The mechanism<br />

presented here – or a very similar one<br />

– will be the fastest and least disruptive<br />

way to ensure this change.<br />

Ex-swap strategies<br />

▲ Parallel<br />

residuum currency<br />

▼<br />

system<br />

Private–public partnerships<br />

Private-citizen partnerships<br />

Mezzanine products<br />

Impact funding<br />

Taxation – subsidies – fees<br />

Impact<br />

Regulation – harmonization – transparency – SCR<br />

◄ Timeline 15 years ►<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


Sheila Bonini<br />

Senior Vice President Private<br />

Sector Engagement at WWF<br />

1. Introduction<br />

Five years ago, sustainability was just<br />

beginning to shift from corporate philanthropy<br />

to an integrated business<br />

need. In my former role <strong>with</strong> McKinsey’s<br />

sustainability practice, I wrote about<br />

the management principles required<br />

for successful sustainability strategies.<br />

Steve Swartz and I saw that not only<br />

did environmental challenges pose real<br />

business risks, but that business could<br />

also play a positive role in solving some<br />

of the biggest threats to the planet. At<br />

the time, sustainability was still seen as<br />

a “nice to have,” but there was growing<br />

evidence that well-managed sustainability<br />

initiatives could be profitable. Indeed,<br />

meta-studies showed that addressing<br />

sustainability issues makes a positive<br />

financial contribution to financial performance.<br />

I highlighted the economic<br />

benefits of sustainability initiatives and<br />

illustrated how better organizational<br />

practices could help companies reap the<br />

value of sustainability. These practices<br />

included focusing on a few key issues<br />

(what we call “material issues” today),<br />

setting ambitious goals, communicating<br />

the benefits of sustainability, and<br />

creating accountability for sustainability<br />

across the organization.<br />

In my new role at World Wildlife Fund<br />

(WWF), I am acutely aware of the threats<br />

to our planet: from climate change to<br />

deforestation and land conversion, water<br />

scarcity, overfishing, and more. Governments<br />

and international conventions are<br />

failing to deliver the scale of change that<br />

is needed, and time is running out. Now<br />

more than ever, innovation and change<br />

must come from the private sector. I am<br />

optimistic because I know that companies<br />

have vast resources – from human<br />

and financial capital to technology and<br />

the global footprint needed to address the<br />

planet’s greatest ecological challenges.<br />

The good news is that businesses increasingly<br />

recognize the risk from climate<br />

change and other environmental chal-<br />

52 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


lenges. Environmental risks were at the<br />

top of the World Economic Forum’s<br />

annual <strong>Global</strong> Risks Perception Survey<br />

this year. Businesses are also getting the<br />

message that sustainability is a critical<br />

way to mitigate these risks. According to<br />

another study by United Nations <strong>Global</strong><br />

Compact and Accenture, 76 percent of<br />

CEOs surveyed believe embedding sustainability<br />

into core business will drive<br />

revenue growth and new opportunities,<br />

and 93 percent regard sustainability as<br />

“critical to future success.”<br />

Sustainability is increasingly seen as core<br />

to the business, but it has yet to become<br />

fully embedded by companies across the<br />

board. The uptick in action to address<br />

climate change from business has been<br />

very welcome. Now we need to ramp up<br />

our climate goals and address other key<br />

ecological challenges such as deforestation<br />

and water stewardship. Finally, the<br />

market needs to better recognize these<br />

issues as being material to business, and<br />

businesses need to commit to greater<br />

accountability and transparency. The<br />

long-term cost of inaction would be<br />

staggering. Those companies that lead<br />

the way to a sustainable future will be<br />

the first to reap its rewards.<br />

2. Climate as material to business<br />

The average global temperature has<br />

already reached 1°C above preindustrial<br />

times, <strong>with</strong> dire consequences for<br />

economies around the world. From South<br />

Africa to Guatemala, nations face the<br />

prospect of shrinking freshwater supplies<br />

and dropping agricultural yields.<br />

According to the National Oceanic and<br />

Atmospheric Administration, extreme<br />

weather events are becoming more frequent.<br />

Since 1980, 241 weather disasters<br />

have saddled the United States <strong>with</strong> a bill<br />

exceeding $1.6 trillion. Disruptions from<br />

climate change are expected to continue.<br />

According to the Fourth National Climate<br />

Assessment produced by the US <strong>Global</strong><br />

Change Research Program, losses in some<br />

sectors are expected to be hundreds of<br />

billions of dollars annually by 2100.<br />

To avoid the worst impacts of climate<br />

change, we need to limit planetary<br />

warming to no more than 1.5°C above<br />

preindustrial levels. To do that, we must<br />

completely decouple the global economy<br />

from carbon emissions and reach netzero<br />

emissions globally by 2050. That<br />

means zeroing out emissions from the<br />

energy we produce, the buildings in<br />

which we live and work, the vehicles<br />

in which we travel, the products we<br />

manufacture, and the food we eat. Companies<br />

are a critical element for reaching<br />

this goal.<br />

Increasingly, companies see climate<br />

change as material to their business.<br />

Focusing on environmental issues that<br />

are material to business is what makes<br />

the difference between sustainability<br />

and charity. Mozaffar Khan, George<br />

Serafeim, and Aaron Yoon’s research<br />

shows that companies that are strong<br />

actors on material sustainability issues<br />

significantly outperform those <strong>with</strong> poor<br />

performance on these issues. This suggests<br />

that investing in sustainability issues<br />

increases the value of the company<br />

for shareholders. This research has been<br />

corroborated by a Deutsche Bank and<br />

University of Hamburg survey of 200<br />

empirical studies that found a positive<br />

relationship between financial performance<br />

and environmental, social, and<br />

governance (ESG) standards.<br />

Business leaders are sitting up and taking<br />

notice: According to Ceres, 32 percent<br />

of companies now conduct materiality<br />

assessments, up from 7 percent in >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


2014. According to the Power Forward<br />

3.0 report by WWF, Ceres, Calvert Investments,<br />

and CDP, more than 60 percent<br />

of Fortune 100 companies and nearly<br />

half of Fortune 500 companies have<br />

already set climate-related targets. The<br />

new threshold for ambitious climate<br />

action is “science-based targets.” Emissions<br />

reduction targets are considered<br />

“science-based” if they align <strong>with</strong> what<br />

the latest climate science says is necessary<br />

to meet the goals of the Paris<br />

Agreement – to limit global warming to<br />

well-below 2°C above preindustrial levels<br />

and pursue efforts to limit warming to<br />

1.5°C. According to the Science-Based<br />

Target Initiative, 554 companies have<br />

committed to setting such targets, and<br />

210 companies have had their targets<br />

approved by the initiative. Importantly,<br />

these science-based targets must cover<br />

emissions from a company’s direct operations,<br />

their electricity use, and their<br />

supply chain.<br />

A few years ago, only a handful of companies<br />

had set 100 percent renewableenergy<br />

goals. Today, 181 companies have<br />

signed on to the RE100 campaign, <strong>with</strong><br />

at least 23 Fortune 500 firms, including<br />

Walmart, General Motors, Bank of<br />

America, Google, Apple, and Facebook.<br />

By boosting energy-efficiency measures<br />

and shifting to low-carbon energy<br />

sources, the private sector can realize<br />

cost savings up to $190 billion in 2020.<br />

Procter & Gamble, for example, has set<br />

science-based greenhouse gas targets,<br />

committed to 100 percent renewable<br />

electricity by 2030, and in the process<br />

has saved more than $500 million (since<br />

2010) by improving energy efficiency<br />

across their global operations.<br />

3. Integrating nature into business<br />

Climate is not the only environmental<br />

issue that business needs to address. In<br />

just the last 40 years, wildlife populations<br />

tracked by WWF’s Living Planet Report<br />

have experienced an average decline of<br />

60 percent. The news for freshwater species<br />

is particularly dire: Since 1970, they<br />

have declined on average by 83 percent.<br />

Nearly half of the world’s forests are at<br />

high risk of degradation or deforestation<br />

by 2030.<br />

Moreover, nearly 90 percent of the<br />

world’s marine fisheries have already<br />

been pushed to – or beyond – their<br />

limits. This rapid loss of biodiversity<br />

threatens the $125 trillion per year in<br />

services that nature provides – from<br />

clean air to clean water, food, fuel, medicine,<br />

and more. The year 2020 promises<br />

to be catalytic <strong>with</strong> regard to protecting<br />

biodiversity, as there is a strong civil society<br />

movement to galvanize public- and<br />

private-sector support for a new deal for<br />

nature and people that protects wildlife<br />

and their habitats.<br />

The business community has been slower<br />

to act on challenges such as deforestation<br />

and the conversion of natural ecosystems.<br />

Although these issues should<br />

be top of mind for many industries,<br />

too often business leaders see them as<br />

embedded in supply chains, and thus<br />

a problem that someone else needs to<br />

deal <strong>with</strong>. However, the consequences<br />

of not addressing them – including<br />

stakeholder backlash and economic<br />

losses – are quite serious.<br />

Many of the actions companies could<br />

take to mitigate these risks are ones<br />

they should be taking anyway to reduce<br />

their scope 3 (supply chain) emissions<br />

and avoid supply chain disruptions from<br />

land-based environmental issues such as<br />

deforestation. According to CDP Supply<br />

54 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


Chain, fulfilling the promises of the Paris Agreement will<br />

require businesses to play a key role in reducing emissions<br />

<strong>with</strong>in both their operations and supply chains. Although<br />

most of the largest companies in the world now account for<br />

and report on the emissions from their direct operations and<br />

the electricity they purchase (scopes 1 and 2), they need to<br />

think beyond their direct operations to consider the carbon<br />

emissions of upstream and downstream supply chain links and<br />

actively manage their scope 3 emissions. Some companies are<br />

expanding their climate efforts to their supply chains (which,<br />

on average, account for four times more emissions than a<br />

company’s direct operations and often include land-based<br />

emissions). Walmart, for example, was the first retailer to set<br />

a science-based target for climate and launched Project Gigaton,<br />

a groundbreaking endeavor that aims to avoid 1 gigaton<br />

(1 billion tons) of emissions from its global supply chain by<br />

2030. Project Gigaton’s innovative structure enables suppliers<br />

to avoid emissions through a focus on energy, agriculture,<br />

forests, packaging, waste, and product use. Currently, more<br />

than 400 suppliers have already joined Project Gigaton from<br />

more than 30 countries.<br />

When McDonald’s set a science-based target – the first for a<br />

global restaurant company – it partnered <strong>with</strong> franchisees and<br />

suppliers to commit to reducing emissions from its restaurants<br />

and offices by 36 percent by 2030. Critically, the company also<br />

set a goal of reducing its emissions intensity (per metric ton<br />

of food and packaging) by 31 percent across its supply chain<br />

by 2030 from 2015 levels. To reach this target, McDonald’s<br />

will need to reduce emissions from the procurement of commodities<br />

such as beef and dairy.<br />

<strong>Goals</strong> for nature and land-based issues should not just be embedded<br />

in climate goals, they need to be addressed outright.<br />

On deforestation, many companies recognize the material<br />

risks that the issues pose to their business and have set zero<br />

deforestation goals. More than 400 companies have pledged to<br />

reduce their impacts on forests and the rights of forest-based<br />

communities, but fewer than half of these companies have plans<br />

<strong>with</strong> time-bound goals, and fewer still have strong monitoring<br />

systems in place. Moreover, only 45 percent of companies are<br />

reporting on their compliance. Of great help here will be the<br />

recently launched Accountability Framework, which provides<br />

harmonized guidance from the NGO community for companies<br />

looking to set and implement credible commitments to eliminate<br />

deforestation, the loss of other ecosystems, and human<br />

rights violations from commodity supply chains. Standardized<br />

definitions and guidance on the use of appropriate monitoring<br />

and reporting approaches should improve accountability to<br />

corporate commitments. Certification is the most used mechanism<br />

to achieve zero-deforestation pledges. According to Forest<br />

Trends, at least 85 percent of companies rely on third-party<br />

commodity certifications to identify commitment-compliant<br />

commodity supply. These certification schemes have had some<br />

success but are often not enough. Companies continue to cite<br />

the challenges of working in states and countries where insufficient<br />

regulations, incentives, or enforcement mechanisms<br />

hinder their sustainability initiatives. This particularly holds<br />

true in the most important areas for production – regions<br />

such as the Amazon, the Cerrado savannah, Sumatra, and<br />

Borneo – where weak enforcement and regulation, human<br />

rights issues, land-rights violations, and corruption are quite<br />

prevalent. >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


A relatively new strategy called the “jurisdictional<br />

approach” shows promise as<br />

a complement to supply chain-focused<br />

efforts such as certification. The jurisdictional<br />

approach is a suite of models that<br />

seek to align diverse stakeholders – from<br />

governments to businesses, NGOs, and<br />

local communities – to find common<br />

ground around conservation, supply<br />

chain sustainability, and development.<br />

Although multistakeholder partnerships<br />

for regional environmental problems<br />

have been a common approach for decades,<br />

the jurisdictional approach takes<br />

this one step further and focuses on the<br />

political level, where land-use decisions<br />

are made and enforced. This approach<br />

typically combines land-use planning<br />

of production and protection areas <strong>with</strong><br />

targeted policy interventions and market<br />

incentives while often utilizing climate<br />

finance.<br />

Walmart’s Project Gigaton encourages<br />

suppliers who source high deforestation<br />

risk commodities, such as palm oil, soy,<br />

and beef, to get involved in regional or<br />

jurisdictional approaches to reduce their<br />

impacts. As part of this effort, Unilever<br />

has engaged <strong>with</strong> the government of<br />

Sabah, which has committed to certifying<br />

100 percent of the state’s palm<br />

oil production to the Roundtable on<br />

Sustainable Palm Oil standard by 2025.<br />

Last September, Unilever announced<br />

that, in addition to its supply chain commitments,<br />

it would fund the restoration<br />

of 4,000 hectares in the State of Sabah,<br />

Malaysia, to provide a critical orangutan<br />

habitat. This is a great example of a company<br />

supporting ecosystem restoration to<br />

simultaneously reduce emissions, stem<br />

biodiversity loss, and safeguard critical<br />

water resources.<br />

4. Accountability<br />

Understanding the risk posed by environmental<br />

issues is often not enough<br />

for companies to successfully enact<br />

sustainability programs. Companies<br />

need incentives to shift their behavior.<br />

Signals from the financial sector have<br />

been a powerful tool for influencing<br />

corporate behavior, and the market is<br />

increasingly taking environmental issues<br />

into account.<br />

Public companies are increasingly facing<br />

pressure from shareholder resolutions to<br />

act on social and environmental issues.<br />

According to a Luc Hoffman Institute<br />

report, these shareholder resolutions<br />

have become more common, and the<br />

market is beginning to see majority votes,<br />

even in the United States, where in 2017<br />

some of the largest asset managers, such<br />

as BlackRock and Vanguard, voted for<br />

climate-related shareholder proposals<br />

for the first time. In 2017, more than<br />

two-thirds of filed shareholder proposals<br />

concerned environmental and social issues.<br />

Evidence shows that ESG proposals<br />

have spurred action <strong>with</strong>in companies.<br />

Filing shareholder proposals can lead<br />

to improvements in performance on a<br />

specific environmental or social issue,<br />

even though such proposals typically<br />

do not receive majority shareholder<br />

support. The New York State Common<br />

Retirement Fund secured agreements<br />

<strong>with</strong> Duke Energy and ExxonMobil to<br />

produce a climate change risk assessment<br />

that includes an analysis of the<br />

Paris Agreement goals after shareholder<br />

resolutions pressured the fund to act.<br />

Public letters to stakeholders – such<br />

as the ones from BlackRock CEO Larry<br />

Fink – have caught the world’s attention.<br />

These statements have signaled the<br />

expectation that firms should be held<br />

accountable to address social and envi-<br />

56 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


ronmental responsibilities in addition to economic returns.<br />

Investors and analysts can also send a powerful signal by<br />

asking annual follow-up questions on the key environmental<br />

and social issues affected by companies.<br />

We are also beginning to see an increase in shareholder votes<br />

by large asset managers such as BlackRock, State Street, Fidelity,<br />

and Vanguard that demand more climate-related disclosures<br />

from companies. For example, ExxonMobil responded to 62<br />

percent of shareholders’ requests to increase transparency in<br />

the company’s report around risks related to climate change.<br />

Likewise, Shell responded to pressure from Climate Action<br />

100+ – a coalition of 340 global investors that controls more<br />

than $34 trillion in US assets – to set leading targets in the<br />

energy sector for climate goals linked to executive pay.<br />

Publicly listed companies are also under increasing pressure<br />

to disclose their business risks to climate change. Earlier this<br />

year, the Task Force on Climate-related Financial Disclosures<br />

(TCFD) reported that 785 companies and other organizations<br />

– including 374 financial firms <strong>with</strong> collective assets in excess<br />

of $118 trillion – were committed to supporting the<br />

TCFD, demonstrating a dramatic rise in support for increased<br />

disclosure just two years after the task force was launched.<br />

Companies are getting the message. Some 51 percent of companies<br />

now discuss climate change risks in annual financial<br />

filings, compared to 42 percent in 2014. However, the 32<br />

percent of companies that do disclose climate risks in their<br />

10-Ks are only looking at it from the angle of mitigating<br />

regulatory risk.<br />

Boards are also holding their companies to account. Strong<br />

executive- and board-level attention to – and prioritization<br />

of – sustainability is key to success. Setting public goals is<br />

essential: Companies are much less likely to fail on public<br />

goals than internal ones. According to Ceres, companies<br />

that have both board oversight of their sustainability initiatives<br />

and link their executive compensation to sustainability<br />

oversight are over two times more likely to have emissions<br />

reduction targets. Yet, whereas 62 percent of companies have<br />

some form of oversight for sustainability at the board level,<br />

only 13 percent have strong oversight practices that include<br />

board mandates and regular reports on sustainability from<br />

management. Moreover, whereas 65 percent hold senior-level<br />

executives accountable for sustainability performance, only 8<br />

percent link executive compensation to sustainability issues<br />

beyond compliance.<br />

A growing body of research indicates that creating executive<br />

incentives for sustainability is effective in boosting those firms’<br />

efforts on environmental and social concerns.<br />

5. Conclusion<br />

When it comes to climate change and environmental degradation,<br />

business as usual is no longer an option. The private<br />

sector can move at the speed and scale necessary to address<br />

these issues. However, companies need to broaden their efforts<br />

beyond climate to include biodiversity and ecosystem<br />

loss. To make business truly sustainable, we need to establish<br />

incentive structures that ensure sustainability is synonymous<br />

<strong>with</strong> good business.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


Stronger <strong>Profit</strong> Potential<br />

for Companies<br />

That Serve<br />

Society<br />

Alex Edmans<br />

Professor of Finance<br />

London Business School<br />

Executives need to prioritize<br />

serving a social purpose if<br />

they want to achieve stronger<br />

and more sustainable profits,<br />

according to Alex Edmans,<br />

Professor of Finance at<br />

London Business School.<br />

He argued that the value a<br />

business creates extends<br />

well beyond the profits it<br />

generates. Professor Edmans<br />

likens the whole impact of a<br />

business to a pie – of which<br />

profits for investors are just<br />

one, albeit important, slice.<br />

The pie-splitting mentality<br />

Professor Edmans, who is also Mercers<br />

School Memorial Professor of Business<br />

at Gresham College, argued that a company’s<br />

value to society should be measured<br />

holistically to include stakeholders<br />

such as workers, customers, suppliers,<br />

the environment, and the government<br />

through taxes.<br />

Too many executives, he said, take from<br />

stakeholders’ slice in order to give a portion<br />

to investors. They view their business<br />

as a fixed zero-sum game. With that<br />

mentality, if you want to grow your slice<br />

you have to take it from other parts of<br />

business. A prime example of this kind<br />

of business was Turing Pharmaceuticals,<br />

which bought existing drugs, restricted<br />

58 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


supply, and jacked up prices. For Turing it was all about the<br />

profit slice, which it pursued <strong>with</strong> gratuitous price-gouging,<br />

taking the price of Daraprim from $13.5 to $750 (£10.3 to<br />

£575) per pill.<br />

“Unfortunately, some companies have the pie-splitting mentality,<br />

which is why there’s a serious crisis of public trust in<br />

business,” said Professor Edmans. “Companies can grow the<br />

pie by investing in all the stakeholders – improving working<br />

conditions, pioneering new products for customers, or<br />

reducing their environmental footprint. <strong>Profit</strong>s then rise as<br />

a by-product of growing the pie.”<br />

“Actions primarily to benefit stakeholders may yet ultimately<br />

benefit investors – even if higher profits were never the<br />

primary objective of these actions.”<br />

The importance of growing the pie in turn implies that the<br />

most serious mistakes are errors of omission (failing to take<br />

a good action that will grow the pie) rather than commission<br />

(taking a bad action). A company that pollutes or engages in a<br />

share buyback is often seen as irresponsible. But in Professor<br />

Edmans’ vision the most irresponsible behavior a business<br />

can indulge in is maintaining the status quo and failing to<br />

innovate – such as Kodak. The company’s failure was in<br />

omission not commissions: It stuck to producing film and was<br />

slow to move into digital cameras. It failed its shareholders by<br />

struggling to make a profit, and it also let down stakeholders<br />

– workers lost their jobs, and customer demand for digital<br />

cameras was not satisfied.<br />

Responsible pie-growing business<br />

Instead, Professor Edmans argued, the best way to increase<br />

investors’ share is to grow the pie by creating value for not<br />

only them but also stakeholders.<br />

The most responsible action that a company can undertake<br />

may not be to cut CEO pay, but to take risks and innovate –<br />

such as Vodafone launching M-Pesa, the mobile money service.<br />

M-Pesa was a service that enabled mobile customers in Kenya<br />

and Tanzania to transfer money using mobiles. Kenya and<br />

Tanzania were not huge markets nor obviously profitable, but<br />

the social need for the service was great. However, through<br />

M-Pesa, Vodafone has grown its reputation in what are now<br />

fast-growing frontier markets.<br />

Similarly, pharmaceutical giant Merck’s decision to give away<br />

the cure to river blindness was not profitable, but the move<br />

has done much to enhance the company’s reputation and<br />

attract key talent. More broadly, Professor Edmans’s TEDxLBS<br />

talk, “The Social Responsibility of Business”, discusses the<br />

“To be a successful<br />

business, you are<br />

going to need to do<br />

things which your<br />

competitors aren’t<br />

doing [...].<br />

Alex Edmans<br />

large-scale evidence that companies that treat employees,<br />

customers, and the environment well also deliver high longterm<br />

returns to investors.<br />

Professor Edmans recognized that even a pie-splitting profitfocused<br />

manager will invest in stakeholders, because he or<br />

she will recognise that it is necessary to, say, train workers to<br />

become more profitable. But he will only invest if the expected<br />

profits outweigh the cost. Calculating the future payoff is<br />

particularly difficult in modern business, where many outcomes<br />

are unprofitable, Professor Edmans observed. Freeing<br />

a company from the constant need to justify an investment<br />

through profit forecasts will, surprisingly, enable it to become<br />

more profitable because it invests more.<br />

“To be a successful business, you are going to need to do things<br />

which your competitors aren’t doing, making investments<br />

your competitors aren’t making… making investments which<br />

can’t be justified by a mathematical calculation,” advised<br />

Professor Edmans.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


No Sustainable<br />

Development<br />

Without Tax<br />

Transparency<br />

Tax and payments to<br />

governments are some of the<br />

most important sources of<br />

income for governments and<br />

play a vital role in enabling<br />

the achievement of the<br />

Sustainable Development<br />

<strong>Goals</strong>. It is through tax and<br />

payments to governments that<br />

companies – large and small –<br />

contribute to society.<br />

Recent tax-related scandals, such<br />

as the release of the Panama<br />

and Paradise Papers, have led<br />

to public debates around the<br />

world and a growing demand from investors,<br />

civil society, media, and governments<br />

for more information on how<br />

companies approach taxes.<br />

The current state of public tax reporting<br />

leaves much to be desired. A recent study<br />

by RobecoSAM indicated that only 17<br />

percent out of 830 companies surveyed<br />

were reporting publicly on tax payments<br />

at a country level, and most of these<br />

were only operating in a single country.<br />

Colin Mayer, Academic Lead of Future<br />

of the Corporation Programme at the<br />

British Academy, writes: “<strong>Global</strong>ization<br />

has proven highly rewarding for<br />

an increasingly concentrated pool of<br />

corporate owners, but it has also alienated<br />

and displaced other interests.<br />

It has raised incomes in low-income<br />

countries but concentrated wealth in<br />

high-income countries. In the UK and<br />

US, corporate tax rates declined from<br />

around 40 percent in 1980 to 25 percent<br />

by 2015. Erosion of corporate tax has<br />

created opportunities for those <strong>with</strong><br />

higher personal income tax rates to<br />

use corporations as vehicles for deferral<br />

of taxes.”<br />

Corporate tax avoidance in Europe is<br />

estimated to cost EU countries €50–70<br />

billion a year in lost tax revenues. Tax<br />

payments are an important component<br />

of corporate governance, and the<br />

Panama Papers scandal has brought<br />

the issues of governance and credibility<br />

back to the forefront of the corporate<br />

dialogue.<br />

“The Panama Papers are a reminder that<br />

much remains to be done to address<br />

the policies that allow millions to be<br />

hidden offshore from tax authorities,”<br />

said Angel Gurría, Secretary-General,<br />

60 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


On June 21, 2016, the European Council agreed on a draft<br />

directive addressing tax avoidance practices commonly used<br />

by large companies. The directive is part of a January 2016<br />

package of Commission proposals to strengthen rules against<br />

corporate tax avoidance. The package builds on 2015 OECD<br />

recommendations to address tax-base erosion and profit-shifting.<br />

The Commission proposals require large multinational companies<br />

to disclose publicly the income tax they pay <strong>with</strong>in the<br />

European Union, country by country. In addition, they would<br />

be asked to disclose how much tax they pay on the business<br />

they conduct outside the EU.<br />

Organisation for Economic Co-operation and Development<br />

(OECD), during the Opening Session of the OECD Forum on<br />

Responsible Business Conduct in June 2018.<br />

“Stakeholders need and expect consistent, quality information<br />

about tax and payments to government in order to have an<br />

informed public debate around questions of equity, fairness,<br />

and acceptability of tax approaches,” says Judy Kuszewski,<br />

Chair of the <strong>Global</strong> Sustainability Standards Board at the<br />

<strong>Global</strong> Reporting Initiative (GRI). “Tax revenues and their<br />

application are essential to society’s ability to deliver on the<br />

Sustainable Development <strong>Goals</strong>. Likewise, tax transparency<br />

promotes trust and credibility in the taxation system and in<br />

the tax practices of companies. It enables stakeholders to make<br />

informed judgments about whether a company’s position on<br />

tax and payments to governments reflects society’s priorities<br />

and creates a reliable basis for decision-making.”<br />

Stop letting the fox keep the geese<br />

Companies should be prepared to face increasing pressure<br />

and regulations regarding transparency on corporate tax<br />

payments. Many individuals and organizations around the<br />

world are already working to promote the accurate disclosure<br />

of corporate tax payments.<br />

Corporate Europe Observatory released a study detailing how<br />

the “Big Four” accounting firms – Deloitte, EY, KPMG, and<br />

PWC – influence EU tax policies, despite their obvious conflicts<br />

of interest as designers and providers of tax-avoidance<br />

schemes to multinational corporations. Despite all revelations<br />

of their assistance in tax avoidance since the Luxembourg Leaks,<br />

the Big Four increased their public procurement contracts<br />

for advising the EU Commission from €7 million in 2014 to<br />

€10.5 million in 2018.<br />

Sven Giegold, financial and economic policy spokesperson<br />

of the Greens/EFA group and the European Parliament, commented:<br />

“Paying and courting the fox to keep the geese has<br />

to stop! We need EU institutions <strong>with</strong> integrity to win tax<br />

justice. The EU Commission has to stop giving EU funding<br />

to the tax-avoidance experts for advice on tax justice and<br />

employ sufficient independent expertise.”<br />

Reforming corporate taxation<br />

As national economies become increasingly integrated, there<br />

have been growing calls from around the world – including<br />

investors, governments, and broader civil society – for more<br />

corporate reporting on tax. Colin Meyer, Professor of Management<br />

Studies at the University of Oxford, says: “Corporate<br />

taxation is in need of urgent reform, and several alternatives<br />

have been considered. One involves shifting both corporate<br />

and personal taxes from a focus on production to consumption;<br />

another is to move personal taxation to an accrual basis.<br />

There are limitations to both. A third approach is to consider<br />

how corporations can be encouraged to promote a more socially<br />

responsive agenda that includes a willingness to pay a<br />

‘fair share’ of taxes as part of their corporate purposes.” >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />




The Dutch are considered calm and prudent, but this news<br />

caused indignation: Shell has paid no tax on its profits<br />

booked in the Netherlands for years, reported the Dutch<br />

newspaper Trouw, quoting an internal document from the<br />

Dutch finance ministry. The company did so by using legal<br />

deductions to minimize its tax quota. The documents reveal<br />

that the Dutch treasury lost as much as £6.1 billion on<br />

missed taxes over the years, while Shell’s net profits have<br />

ranged from €2 billion to €55 billion annually. What happened?<br />

The Guardian writes: “The arrangement dates back<br />

to the Anglo-Dutch company’s merger of its two branches to<br />

establish a single headquarters in The Hague. During discussions<br />

over the move, the Dutch tax authorities agreed to<br />

exempt its UK-based shareholders from paying a <strong>with</strong>holding<br />

tax on dividend payments if they were routed through<br />

Jersey.”<br />

The recent news revealed by the Dutch newspaper<br />

reopened the debate on tax honesty. Politicians called for<br />

the European Commission to investigate the oil company’s<br />

tax affairs. Paul Tang, a Dutch MEP, told The Guardian:<br />

“The probability that the European Commission will go after<br />

this tax arrangement <strong>with</strong> Shell is huge. With European<br />

law in hand, this construction can be reversed.” The Dutch<br />

Parliament’s financial affairs committee asked Shell to<br />

send a representative to attend a hearing. But Shell’s Board<br />

reacted stubbornly, <strong>with</strong> its CEO declining the invitation,<br />

saying it would make more sense for a business association<br />

to attend. The committee was snubbed. The Guardian<br />

reported: “Politicians of all parties said they wanted Shell<br />

to attend. Lawmaker Pieter Omtzigt said in a statement the<br />

parties had unanimously asked parliament’s chairwoman to<br />

‘forcefully’ ask Shell to come.” The whole case comes at an<br />

inconvenient time for the oil company. Environmental campaigners<br />

are calling for “climate damages tax” and launching<br />

legal action against Shell. The divestment movement is<br />

also campaigning harshly against all fossil fuel industries.<br />

Both groups argue that, as quoted in The Independent:<br />

“Shell is one of the 100 fossil fuel producers responsible for<br />

71 percent of greenhouse gas emissions since 1988.”<br />

“Inaction on climate change from governments and businesses<br />

is increasingly seeing citizens use the courts to call<br />

time on the destructive excesses of the fossil fuel industry<br />

and to force investment in sustainable energy,” said Harjeet<br />

Singh, ActionAid’s global lead on climate change, to The<br />

Independent. “Forcing companies like Shell to change their<br />

ways must be part of the transition to a low-carbon global<br />

economy.”<br />

The EU already requires companies <strong>with</strong><br />

activities in the extractive and forestry<br />

industries to disclose the payments they<br />

make to governments on a country-bycountry<br />

basis and, where appropriate,<br />

on a project-by-project basis.<br />

The G20 also has an important role to<br />

play in putting pressure on the jurisdictions<br />

to commit and implement internationally<br />

agreed standards on transparency<br />

and to ensure that the information<br />

provided by companies is comprehensive,<br />

comparable, and accessible.<br />

As countries develop their implementation<br />

plan to achieve the Sustainable<br />

Development <strong>Goals</strong>, there is an opportunity<br />

for countries to strengthen their<br />

tax transparency regulatory systems so<br />

that they can count on domestic tax<br />

revenues as a source of financing for<br />

development. Target 17.1 specifically<br />

states: “Strengthen domestic resource<br />

mobilization, including through international<br />

support to developing countries,<br />

to improve domestic capacity for tax and<br />

other revenue collection.”<br />

Increased transparency on corporate<br />

tax payments is expected<br />

A future where disclosure of the taxes<br />

paid by businesses is common international<br />

practice is one step closer. It was<br />

in this context that proposals for a first<br />

global standard on tax and payments to<br />

governments were initiated by the GRI<br />

<strong>Global</strong> Sustainability Standards Board<br />

(GSSB). Therefore, “Tax and Payments<br />

to Governments” will be a new category<br />

<strong>with</strong> own indicators to measure transparency<br />

and sustainability. With this, GRI<br />

leverages the work done by the OECD<br />

<strong>with</strong> its Guidelines for Multinational<br />

Enterprises, and the GSSB will take a<br />

decision whether the GRI Standards will<br />

need to be updated to reflect the international<br />

consensus.<br />

62 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


The Grand Theft<br />

In the European Union alone, at least €825 billion in taxes are evaded every year. This is the result<br />

of the study “The European Tax Gap.” The author, Richard Murphy, a tax expert and professor at<br />

the University of London, admits that the sums are only rough estimates. After all, they are the<br />

result of illegal activities that are deliberately concealed by the perpetrators, such as undeclared<br />

work. One “popular” method is the so-called carousel model. The faster the carousel turns and the<br />

more national borders are crossed, the more difficult it is for national authorities to understand.<br />

There are three particularly audacious examples.<br />


Tax fraudsters steal at least €50 billion from governments.<br />

Reporters from 30 countries discovered the massive graft that<br />

is hitting Germany particularly hard. A Deutsche Welle article<br />

explains the model: “The scheme resolves around the trade<br />

of goods such as cars and mobile phones and even uses other<br />

high-cost items such as CO 2<br />

emissions certificates. Taking<br />

advantage of each European country having a different value<br />

added tax (VAT), the criminals move the goods from one EU<br />

member state to another, claiming back millions in tax reimbursements<br />

that they never paid or earned in the first place.”<br />

Company B acquires goods from company A.<br />

From its point of view, it is an intra-community<br />

acquisition, which means that B has to pay VAT,<br />

which it can later deduct on its VAT declaration.<br />

Company A sells goods to<br />

company B. From its point of<br />

view, it is an intra-community<br />

delivery, which is exempted<br />

from VAT.<br />

VAT<br />

0%<br />

B<br />

Company B does<br />

not pay VAT<br />

Company B resells the goods to company<br />

C, which is located in the same country.<br />

It is a local sale: company B charges VAT<br />

to company C.<br />

Company C<br />

deducts VAT<br />

VAT<br />

x%<br />

Another EU member country<br />

Company C purchases the<br />

goods from Company B. C<br />

pays VAT to B.<br />

A<br />


Company C<br />

pays VAT<br />

C<br />

EU member country<br />

VAT<br />

0%<br />

Company D can resell the goods to<br />

company A. It is an intra-community<br />

delivery: Company D charges 0% VAT.<br />

Company D deducts<br />

VAT paid to<br />

company C<br />

D<br />

VAT<br />

x%<br />

Company D purchases the<br />

goods from company C. It<br />

pays VAT to company C.<br />

Company C resell the goods<br />

to company D. It is a local<br />

sale: Company C charges VAT<br />

to company D.<br />

Source: ASD Group<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />



Through so-called Cum-Ex deals <strong>with</strong> taxes, states are cheated<br />

of enormous sums. Across Europe, the damage amounts to<br />

approximately €55 billion, according to the media. This is how<br />

it works: A tax is paid once and reclaimed several times by the<br />

treasury. The scheme involves banks, accounting firms, financial<br />

houses, and law firms across Europe and the United States.<br />

Before dividend payment (Cum) Dividend payment date After dividend payment (Ex)<br />

Corporate<br />

A<br />

A owns shares.<br />

A<br />

A receives<br />

the dividend.<br />

A receives<br />

a certificate,<br />

<strong>with</strong> which<br />

they receive<br />

a tax refund.<br />

A<br />

A sells the shares.<br />

B<br />

B sells shares <strong>with</strong>out<br />

already owning them<br />

(short sale).<br />

B<br />

B delivers the shares<br />

<strong>with</strong>out a dividend, but<br />

<strong>with</strong> a compensation<br />

payment <strong>with</strong>out a tax<br />

deduction.<br />

C<br />

The buyer is entitled to<br />

shares and dividends.<br />

C<br />

Twenty-five percent<br />

goes to the tax<br />

authorities<br />

(capital gains tax).<br />

C receives a<br />

certificate <strong>with</strong><br />

which they<br />

receive a tax<br />

refund.<br />

64 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>



The so-called Panama Papers have been the biggest data<br />

leak so far: 11.5 million leaked documents have reveal financial<br />

information on almost 215,000 offshore companies.<br />

The documents were taken from Panama-based law firm<br />

Mossack Fonseca. The leaks have included the personal financial<br />

information of wealthy individuals and public officials<br />

that had been kept secret. Reporters found that Mossack<br />

Fonseca’s mailbox company was used for illegal purposes,<br />

including fraud, tax evasion, and bypassing international<br />

sanctions.<br />

The real owner can do what they<br />

want <strong>with</strong> the hidden money<br />

<strong>with</strong>out revealing their own name,<br />

for example buy mansions, yachts,<br />

shares, etc.<br />

4<br />

Persons want to hide money<br />

or conceal its origins. They<br />

contact Mossack Fonseca.<br />

1<br />

3<br />

2<br />

The dummy director signs all<br />

legally required transactions<br />

<strong>with</strong>out the true owner having<br />

to appear.<br />

Mossack Fonseca helps to<br />

set up a mailbox company<br />

and, if desired, appoints a<br />

dummy director.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />




Whose<br />

Prosperity<br />

Are We<br />

Talking<br />

About?<br />

The retreat into the national sphere is in<br />

vogue – especially in the industrialized<br />

countries. The election results<br />

between Washington and Brasilia,<br />

between London and Budapest reflect<br />

citizens’ concerns about the negative<br />

consequences of globalization. However,<br />

an international globalization report<br />

shows that the winners of globalization<br />

are often right where the criticism<br />

of globalization is loudest: in the<br />

industrialized countries.<br />

66 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />



1990 IN PERCENT<br />

1 China 518<br />

2 Hungary 356<br />

3 South Korea 352<br />

4 Chile 327<br />

5 Poland 290<br />

6 Slovenia 290<br />

7 Romania 268<br />

8 Estonia 263<br />

9 Bulgaria 258<br />

10 Portugal 239<br />

11 Greece 232<br />

12 ... Ireland 231<br />

21 ... Germany 148<br />

38 Great Britain 63<br />

39 Mexico 56<br />

40 Argentina 51<br />

41 USA 39<br />

42 Norway 23<br />

Source: Bertelsmann Stiftung<br />

People in the industrialized countries<br />

benefit the most from increasing globalization.<br />

This is the key finding of the<br />

Bertelsmann Stiftung’s <strong>Global</strong>ization<br />

Report 2018. The report calculates the<br />

degree of international interconnectedness<br />

and the resulting increases in real<br />

gross domestic product (GDP) per capita<br />

for 42 industrialized and emerging countries.<br />

“The report shows: <strong>Global</strong>ization<br />

can clearly create welfare gains,” says<br />

Aart De Geus, Chairman and CEO of the<br />

Bertelsmann Stiftung. “Protectionism<br />

is not the right way forward. However,<br />

globalization must be shaped in such a<br />

way so the focus is on the people. This<br />

is the only way we can live up to our<br />

promise of success.”<br />

Switzerland profits most from globalization,<br />

India comes in last<br />

During the period under study, real GDP<br />

per capita grew by an average of around<br />

one trillion euros per year as a result of<br />

increasing globalization across all 42<br />

countries surveyed. This corresponds<br />

roughly to the economic output of a<br />

medium-sized economy such as Mexico<br />

or South Korea. In all countries surveyed,<br />

real GDP per capita growth is positive.<br />

However, the amounts differ significantly<br />

from country to country.<br />

The Swiss benefit the most. In Switzerland,<br />

the GDP per capita resulting from<br />

increasing globalization grew on average<br />

by €1,910 per year between 1990 and<br />

2016. In India – the last-ranked <strong>with</strong><br />

respect to globalization-related welfare<br />

gains – this figure rose by an average of<br />

only €20 per year. China also recorded<br />

below-average gains (€80 per year).<br />

The main reason for these low growth<br />

rates in the emerging countries is the<br />

low starting level of GDP per capita when<br />

the measurements were taken. Emerging<br />

countries such as China and India were<br />

only in the early stages of a dramatic<br />

growth curve in 1990, and thus they<br />

performed worse overall in terms of<br />

absolute gains than industrialized countries,<br />

which were already more globally<br />

interconnected at that time.<br />

Better distribution of globalization<br />

gains is needed<br />

From the Bertelsmann Stiftung’s perspective,<br />

one of the biggest issues of<br />

globalization is the unequal distribution<br />

of globalization gains between industrialized<br />

and emerging countries, but also<br />

<strong>with</strong>in states. Since the industrialized<br />

countries have had higher economic<br />

performance levels per capita for a long<br />

time, absolute globalization gains are<br />

also significantly higher, and therefore<br />

difficult for the emerging countries to<br />

catch up <strong>with</strong>. Dr. Cora Jungbluth, economic<br />

expert at the Bertelsmann Stiftung,<br />

sees a revival of the WTO trade rounds as<br />

a possible solution: “We must promote<br />

an international economic order that<br />

does not promote the right of the strongest,<br />

but sets common binding rules and<br />

standards,” says Jungbluth. “Only in this<br />

way can globalization profits be distributed<br />

as widely as possible.” According to<br />

68 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


“<br />

Any sustainable prosperity agenda would<br />

go well beyond CSR or the greening of<br />

supply chains, and make it the ‘new<br />

normal’ to act on the pressing challenges<br />

of the day. This includes such things as<br />

food security, fuel poverty, and climate<br />

change. The SDGs can act as the growth<br />

strategy and innovation space for the<br />

businesses of today and tomorrow.<br />

Henrietta L. Moore,<br />

Director of the Institute for <strong>Global</strong> Prosperity<br />

the Bertelsmann Stiftung, this includes<br />

market openings in emerging countries<br />

as well as the reduction of subsidies in<br />

industrialized countries.<br />

In the industrialized countries, Bertelsmann<br />

Stiftung experts also see the need<br />

to ensure that the obvious and tangible<br />

benefits of globalization are distributed<br />

in such a way that all citizens participate.<br />

“We can see from the data that<br />

globalization is bringing us significant<br />

welfare gains,” says Jungbluth. This is<br />

why awareness must be strengthened<br />

in the industrialized countries that integration<br />

<strong>with</strong> the global economy – as<br />

long as it is based on internationally<br />

recognized rules and standards – brings<br />

material benefits.<br />

Going beyond GDP<br />


BETWEEN 1960 AND 2016 (IN EUROS)<br />

Rank Country Average p.a. Accumulated <strong>Profit</strong><br />

1 Switzerland 1913 49,730<br />

2 Japan 1502 39,046<br />

3 Finland 1410 36,664<br />

4 Ireland 1261 32,794<br />

5 Israel 1157 30,080<br />

6 Germany 1151 29,922<br />

7 Denmark 1150 29,904<br />

8 Netherlands 1080 28,072<br />

9 Slovenia 953 24,768<br />

10 South Korea 908 23,598<br />

11 Austria 904 23,491<br />

12 ... Greece 894 23,254<br />

38 Mexico 122 3175<br />

39 Russia 116 3004<br />

40 Argentina 110 2862<br />

41 China 79 2049<br />

42 India 22 567<br />

Source: Bertelsmann Stiftung<br />

“What we measure affects what we do. If<br />

you measure the wrong thing, you will<br />

do the wrong thing. If you don’t measure<br />

something, it becomes neglected,<br />

as if the problem did not exist,” says<br />

Nobel Prize winner Joseph Stiglitz in<br />

a recent OECD presentation. For years,<br />

economists have been searching for a<br />

new definition of well-being beyond<br />

GDP. Henrietta L. Moore, Director of the<br />

Institute for <strong>Global</strong> Prosperity, brings the<br />

fragile interdependency between profit<br />

and purpose to the point: “A prosperous<br />

society is not necessarily a society that is<br />

wealthy – although a strong economy<br />

is an essential part of it. Instead, it is<br />

a society that is inclusive, sustainable,<br />

and capable of offering its residents<br />

the ability to have a fulfilling life. This<br />

has sparked an interest in new types of<br />

conversations about the most efficient<br />

ways in which economic resources can<br />

translate into well-being for both people<br />

and the environment.” She adds: “This is<br />

not just a matter of ceasing to externalize<br />

the costs of pollution and deterioration,<br />

but recognizing that the planet’s assets<br />

are common assets and must be protected,<br />

maintained and regenerated.”<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


When your music is global,<br />

so too is the influence you<br />

exert, and while some artists<br />

have hastily sought out the<br />

protection of publicists,<br />

agents, and blacked-out<br />

limousine windows, Coldplay<br />

frontman Chris Martin has<br />

chosen to pursue a rather<br />

more visible, audible route<br />

toward cultural change.<br />

By Danny Bowman<br />

70 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


Chris Martin’s willingness to<br />

speak out is well-known. As<br />

much as it has served him as a<br />

respected statesman of political<br />

pop, by his own admission there have<br />

been occasions when he has found himself<br />

banished to the Bono or Bob Geldof<br />

corner of global philanthropy. “It’s not<br />

a place I’ve ever sought out,” he laughs.<br />

In truth, it is an unfair slant for an artist<br />

whose lyrical prowess is simply a reflection<br />

of a genuine plea to see us move<br />

somewhere closer toward global equality.<br />

He credits the birth of his daughter<br />

Apple – <strong>with</strong> filmstar former wife<br />

Gwyneth Paltrow – in 2004 as being<br />

the point at which things changed.<br />

“Things really began to gather pace,” he<br />

explains. “It’s not as though global ills<br />

weren’t in my mind before then, but<br />

I think when you have children, your<br />

perception of pretty much everything<br />

intensifies. I also began to appreciate<br />

the fact that on stage, in interviews, and<br />

through lyrics, musicians have perhaps<br />

a greater ability to influence and to get<br />

people thinking about things than almost<br />

anyone else. If you can get the right<br />

melody <strong>with</strong> the right message,” he continues,<br />

“you’ve got an ethical, everlasting<br />

message that will stay in someone’s<br />

head for a long time, and to not use that<br />

opportunity would be wrong.”<br />

Martin’s first major foray into philanthropy<br />

came in 2002, when he accompanied<br />

Emily Eavis – co-organizer of the<br />

legendary annual Glastonbury Festival<br />

– to the Dominican Republic and Haiti<br />

to be shown where money donated by<br />

the festival to Oxfam had been invested.<br />

It was also a trip that opened up the<br />

singer’s broader understanding of the<br />

power and importance of the fair trade<br />

concept, something he would go on to<br />

explore further in future overseas trips,<br />

not least three years later in Ghana –<br />

again <strong>with</strong> Oxfam – as part of the Make<br />

Trade Fair project.<br />

From the moment the touring party<br />

left the parking lot at the Dominican<br />

Republic’s main Punta Cana Airport, the<br />

realization quickly dawned that Western<br />

minds were not solving the crisis, they<br />

were exacerbating it.<br />

“The first thing was the tough working<br />

and living conditions people were having<br />

to endure,” he says, “and at the heart<br />

of these were the grossly unfair trade<br />

rules. In cloud cuckoo land where we<br />

live, I don’t think we appreciate what<br />

those people have to go through just to<br />

survive every day. The difference in real<br />

money that ends up in people’s pockets<br />

when countries such as the Dominican<br />

Republic and Haiti sell their product to<br />

a fair trade company – as opposed to<br />

when they sell it to a ‘fat-boy’ company<br />

like Nestlé – is profound,” says Martin.<br />

“To us, as consumers, it’s about 20 pence<br />

per jar, yet to the grower, it can be up to<br />

$90 per hundred-weight of coffee. That’s<br />

a week’s worth of food.”<br />

In Haiti, things were slightly better, <strong>with</strong><br />

cooperatives already using nurseries to<br />

cultivate the best crops, then handing<br />

them out to each farmer who had signed<br />

up for the scheme.<br />

“We met a farmer – he told us that when<br />

he sells his coffee to a fair trade company,<br />

he gets paid almost three times as much.<br />

Trade justice, put simply, is a matter of<br />

life and death, but it’s also about human<br />

dignity and equality.”<br />

The musician also admits to being<br />

shocked at the quantity of unwanted<br />

Western goods that were being “dumped”<br />

on the island. >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


We met a farmer – he told us that<br />

when he sells his coffee to a fair trade<br />

company, he gets paid almost three times<br />

as much. Trade justice, put simply, is<br />

a matter of life and death, but it’s also<br />

about human dignity and equality.<br />

Chris Martin<br />

“From the outside you’d see this as a good<br />

example of how produce wasn’t being<br />

wasted – here we were, the so-called<br />

developed world, passing on massive<br />

bulkloads of items, and this is all being<br />

encouraged by the governments on the<br />

island. And yet, on closer inspection, this<br />

wasn’t a good thing at all. When these<br />

products land, they help people in the<br />

short-term, but very quickly obliterate<br />

the ability of producers on the island<br />

to sell their own cultivated goods. And<br />

the knock-on effect from that is to stifle<br />

consumer spending going into other<br />

areas, so the whole thing retracts.”<br />

While Chris Martin’s experiences take<br />

him back as far as 15 years, the painful<br />

reality of Haiti and the Dominican<br />

Republic – just as in so many other<br />

Third World or remote nations – is<br />

that this practice continues today. Indeed,<br />

the 2010 earthquake on the island<br />

obliterated some advances that<br />

had been made. The premise – at its<br />

lowest marketed denominator “to feed<br />

starving children” – will always appear<br />

admirable, but whether the crop is rice,<br />

peanuts, or anything else, it traps people<br />

in hand-to-mouth poverty and starts a<br />

chain of dependency that is pernicious<br />

in its process.<br />

“It was such a shift in the whole concept<br />

for me,” continues the Coldplay frontman.<br />

“It was strange to think that something<br />

we regarded as so virtuous and honest<br />

could actually be doing harm.”<br />

In Ghana, his criticisms were again<br />

aimed at the higher powers, <strong>with</strong> the<br />

national government seemingly happy<br />

to import from the likes of Thailand<br />

and America, to the detriment of its<br />

own producers.<br />

“It was extraordinary to see a country<br />

that was trying to let its rice farmers<br />

do well, yet its actions were doing the<br />

opposite as it continued to import stuff<br />

really cheaply.”<br />

In March <strong>2019</strong>, Ghana’s Akufo-Addo<br />

administration did, in fact, launch a new<br />

initiative to end the estimated $1 billion<br />

annual importation of rice by the year<br />

2025. Certainly, the nation’s vast fertile<br />

lands and excellent human resources<br />

give it the potential of becoming a major<br />

rice producer, but many agricultural<br />

commentators have suggested the target<br />

is overly ambitious.<br />

“For balance, there are some places where<br />

things are working,” he continues. “It<br />

was so exciting to see this stuff in action<br />

because the donations from the UK to<br />

Oxfam, as well as the other charities, do<br />

have an effect; but we will always want<br />

more to happen, and faster.”<br />

Chris has enlarged his philanthropic<br />

reach to take in a vast number of other<br />

projects. A fundraiser for Hurricane<br />

Sandy saw a London concert in 2012,<br />

and two years later he was part of the<br />

Band Aid 30 collective that sought to<br />

raise funds and awareness in light of<br />

the Ebola crisis.<br />

In 2015, he became Creative Director of<br />

the <strong>Global</strong> Citizen Festival, developed<br />

72 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


to mark the establishment of the United Nations Sustainable<br />

Development <strong>Goals</strong>.<br />

“There is a 17-task checklist that’s designed to end extreme global<br />

poverty by the year 2030,” he says. “That sounds ambitious,<br />

but we would rather miss that deadline by pushing ourselves<br />

than coast toward and end-goal and feel we can take our foot<br />

off the gas because the deadline is far, far away. Where global<br />

poverty is concerned, the quicker you get to your goals, the<br />

more lives you save – it’s as simple as that.”<br />

His band, Coldplay, also donates 10<br />

percent of its annual earnings to 28<br />

different charities, including Amnesty<br />

International, the Red Cross, War Child<br />

and, of course, Make Trade Fair. “It’s<br />

something that has become very natural<br />

to us, and I’m glad we can keep flying<br />

that flag,” says the lead singer. “Really,<br />

compared to what they need to make a<br />

real difference, it’s a drop in the ocean,<br />

but it is our drop, and that’s what makes<br />

it special.”<br />

What you have to admire about Chris<br />

Martin is his ability to stay relevant.<br />

People listen to him, just as they listen<br />

to his music, because there is spirited<br />

reinvention, not to mention a precision<br />

over the message at every turn. Coldplay<br />

has harnessed, tweaked, and refined its<br />

sound <strong>with</strong> every new album; so, too, does its frontman appreciate<br />

the need for us to talk about global issues in a way<br />

that makes the subject feel as though it is an evolving and<br />

ongoing quest.<br />

“I think the connection is there,” he insists. “Obviously social<br />

media helps a lot when it comes to getting the right message<br />

across – that’s certainly something we never had before; it<br />

was down to Attenborough or evening news bulletins. Do I<br />

worry that the messages aren’t getting through while other,<br />

less important ones are? Perhaps, but I think that’s the nature<br />

of the beast. We can’t be on this stuff 24/7 – people will just<br />

turn off it and everything will become diluted. So while I don’t<br />

think we can ever let up on the awareness, the trick is almost<br />

certainly to keep the message fresh so that people continue to<br />

listen,” he explains, before concluding: “The more of us that<br />

do, the more action can be taken. This is true people power,<br />

and it’s global.”<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


Basic Welfare<br />

State Models<br />

Today, the welfare state<br />

represents a common<br />

structural element of all<br />

democracies. However, these<br />

welfare states are still very<br />

young. The following overview<br />

outlines the origins of<br />

state-run social policy.<br />

By Frank Oschmiansky and Jürgen Kühl<br />

Comparisons between countries at the<br />

nation-state level play an important role<br />

in comparative welfare state research. The<br />

individual welfare states differ, among<br />

other things, in terms of benefit density,<br />

eligibility requirements, and the manner<br />

in which social benefits are financed and<br />

provided. In the past, welfare states were<br />

divided into the Bismarck and Beveridge<br />

types. Since the 1990s, a categorization<br />

into three types has been established:<br />

liberal models, conservative models, and<br />

social democratic models. The following<br />

will illustrate the thinking behind this<br />

categorization and which countries are<br />

assigned to which model.<br />

The evolution of the modern welfare<br />

state began some 125 years ago <strong>with</strong><br />

the development of state social security<br />

systems in Western Europe. The public<br />

health, accident, and retirement insurance<br />

schemes created in the German<br />

Empire under Chancellor Otto von Bismarck<br />

were the first of their kind in the<br />

world, making Germany a global pioneer<br />

in the field of social policy. A shrewd<br />

political maneuver, this new policy was<br />

intended to deprive the newly emerging<br />

social and revolutionary movements<br />

of their ideological foundations. Many<br />

European countries followed this example,<br />

<strong>with</strong> the first being the neighboring<br />

countries. Japan, the United States, and<br />

Switzerland constituted “late bloomers”<br />

in this respect. Most European countries<br />

passed national laws on unemployment<br />

insurance during the first 20 years of the<br />

20th century. France was the first country<br />

to introduce this type of insurance system<br />

in 1905. In this case, Germany was rather<br />

late to the game.<br />

74 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>



Accident<br />

insurance<br />

Health<br />

insurance<br />

Retirement<br />

insurance<br />

Unemployment<br />

insurance<br />

Germany 1884 1883 1889 1927<br />

Denmark 1898 1892 1891 1907<br />

Belgium 1903 1894 1900 1920<br />

Austria 1887 1888 1907 1920<br />

United Kingdom 1897 1911 1908 1911<br />

France 1898 1928 1910 1905<br />

Sweden 1901 1891 1913 1934<br />

Netherlands 1901 1931 1919 1916<br />

Italy 1898 1943 1919 1919<br />

Japan 1911 1927 1941 1947<br />

United States 1930 1965 1935 1935<br />

Switzerland 1918 1911 1946 1982<br />

Source: OECD<br />

Insured person<br />

Financing<br />

Cash benefits<br />

Non-cash benefits<br />

Administration<br />

Insurance model<br />

(Bismarck model)<br />

Group of insured employees<br />

(gainfully employed)<br />

Contributions according to<br />

wages / salaries<br />

Calculation on the basis of lost<br />

wages / salaries<br />

Insurance-related non-cash<br />

benefits or reimbursement of<br />

expenses<br />

Partially private, frequently on<br />

equal terms (employee and<br />

employer)<br />

Welfare model<br />

(Beveridge model)<br />

Entire population<br />

Taxes<br />

Uniform lump-sum benefits<br />

Free<br />

Public<br />

Transfer intensity Low High<br />

Source: Schmid, Alfons (2002): p. 89<br />

Basic models of comparative welfare<br />

state research<br />

In order to better highlight similarities<br />

and differences between different<br />

types of welfare states, the individual<br />

states were assigned to different groups.<br />

These groups or types of welfare states<br />

affiliate countries whose social policies<br />

are similarly structured. Of course, no<br />

state actually fits entirely into one of<br />

these categories, as most states have<br />

hybrid systems.<br />

Older comparative welfare research<br />

usually distinguished between two systems<br />

– the Bismarck and the Beveridge<br />

systems. The Bismarck type is based on<br />

contribution-financed social insurance,<br />

which is usually wage-related and linked<br />

to gainful employment, whereas the<br />

Beveridge type is based on a tax-financed<br />

minimum benefit system for all citizens.<br />

By the end of the 19th century in Germany,<br />

Bismarck had created a social<br />

system that was essentially financed<br />

through contributions from employees<br />

and their employers and whose benefits<br />

depended on how many contributions<br />

were paid and how high these contributions<br />

were. Next to Germany, France and<br />

Italy represent the other major European<br />

countries <strong>with</strong> this specific performanceoriented<br />

type of social system.<br />

On the other hand, William Beveridge,<br />

who presented his report on the reform<br />

of the social security system to the British<br />

Parliament as head of a commission of<br />

experts in November 1942, placed much<br />

more emphasis on a basic provision for<br />

all, which was to be supplemented by<br />

personal contributions. Financing should<br />

therefore logically stem from community<br />

funds, meaning tax revenue. Next to<br />

the United Kingdom, the Scandinavian<br />

countries represent the other major<br />

European countries <strong>with</strong> this specific<br />

needs-oriented type of social system. >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


It was by no means a given that the<br />

Bismarck model would reassert itself in<br />

the newly founded Federal Republic of<br />

Germany following World War II. During<br />

the Allied occupation (1945–1949), the<br />

traditional German social security system<br />

was on the verge of a major disruption.<br />

Allied plans for the German social system<br />

were based more on the Beveridge<br />

model and provided for an extension<br />

of the insurance coverage to almost the<br />

entire population.<br />

These proposals were supported by trade<br />

unions, social democrats and communists.<br />

In the end, however, the Allies<br />

abandoned their plans and left the decision<br />

up to the first German Bundestag.<br />

The governing coalition of the CDU /<br />

CSU, FDP, and DP (Deutsche Partei [German<br />

Party]) parties were united in their<br />

determination to restore the foundations<br />

of the traditional German social security<br />

system.<br />

The most well-known and commonly<br />

used distinction today was put forward<br />

by the Danish sociologist Gøsta Esping-<br />

Andersen. It distinguishes between three<br />

types of welfare states: liberal, conservative,<br />

and social democratic. The categorization<br />

is based on the underlying logic<br />

of the relationship between the state and<br />

the market in the provision of social services,<br />

the mode and quality of services,<br />

and the impact of social policy on social<br />

stratification and the social distribution<br />

of power.<br />

The conservative (or continental European)<br />

welfare states are therefore shaped<br />

by Bismarck’s social security model, <strong>with</strong><br />

the focus on insurance benefits. The<br />

strong link between paid labor and social<br />

benefits often leads to the exclusion of<br />

women who are not gainfully employed.<br />

The redistributive effect of social benefits<br />

is low for this type. Examples of this type<br />

are countries such as Germany, France,<br />

and Austria.<br />

76 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


Social democratic (or Scandinavian) welfare<br />

states are characterized by universal<br />

services. The aim is to achieve equality<br />

at a high level, <strong>with</strong> social civil rights<br />

forming the foundation of the welfare<br />

system. The benefits are mainly financed<br />

through taxes, <strong>with</strong> the tax rates being<br />

relatively high. This category features the<br />

strongest form of liberation from market<br />

constraints (decommodification). Examples<br />

of this type are the Scandinavian<br />

countries: Sweden, Norway, Denmark,<br />

and Finland.<br />

The liberal (or Anglo-Saxon) welfare state<br />

model places its emphasis on the role<br />

of the free market and the family. It is<br />

mainly tax-financed, transfer benefits<br />

are generally means-tested, eligibility<br />

requirements are strict, and the benefits<br />

low. Examples of this type are Canada,<br />

the United States, the United Kingdom,<br />

Australia, and Switzerland.<br />

Recent research has tended to extend<br />

the Esping-Andersen typology by adding<br />

two further types: first, rudimentary<br />

(or Mediterranean) welfare regimes<br />

characterized by a dominance of the<br />

agricultural sector, where the welfare<br />

state and the level of decommodification<br />

are minimal (examples are Italy<br />

and Portugal); second, the post-socialist<br />

welfare states that dominate the transformational<br />

political systems of Eastern<br />

Europe. It is not yet possible to allocate<br />

these to specific types in this case due<br />

to the gradual nature of the change in<br />

the welfare state that has taken place<br />

thus far, and the combination of old<br />

and new elements.<br />


Liberal welfare state<br />

Conservativecorporatist<br />

welfare<br />

state<br />

Social democratic<br />

welfare state<br />

• Encourages private welfare<br />

• Limited social benefits for<br />

low-wage groups<br />

• Strict eligibility requirements<br />

• Preservation of status and group differences<br />

• Preservation of traditional family structures<br />

• Subordinated role of business and private benefits<br />

• Universal benefits<br />

• “An equality of the highest standards, not an equality of<br />

minimal needs”<br />

• Identical rights for blue-collar workers, salaried<br />

employees, and civil servants<br />

Source: Bolkovac, Martin (2007): Sozialpolitik im internationalen Vergleich<br />

[An international comparison of social policy]<br />


Decommodification (protection<br />

against market forces and loss of<br />

income)<br />

Residualism (share of welfare<br />

benefits)<br />

Privatization (share of private<br />

expenditures for age and healthrelated<br />

services)<br />

Corporatism / statism (number of<br />

social security systems differentiated<br />

according to occupational<br />

groups)<br />

Liberal<br />

Minimal<br />

Conservative<br />

High<br />

(for clients)<br />

Social<br />

democratic<br />

Maximum<br />

Strong Strong Weak<br />

High Low Low<br />

Weak Strong Weak<br />

This text is published under the Creative<br />

Commons license: by-nc-nd/2.0<br />

Redistributive capacity (progressivity<br />

of the tax system, equality of<br />

benefits)<br />

Weak Weak Strong<br />

Guarantee of full employment<br />

(unemployment rate, expenditures<br />

on active labor market policies)<br />

Weak Weak Strong<br />

Source: Esping-Andersen (1990)<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />


The Rise and Fall<br />

of Prosperity Around<br />

the Globe<br />

78 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


By Faiq Lodhi<br />

What is it that connects<br />

Bangladesh, Zimbabwe, and<br />

Paraguay? Is it their shared<br />

history, culture, or geography?<br />

Surely not – these countries<br />

inhabit three separate<br />

continents and have little<br />

in common. However, one<br />

aspect that is prominent<br />

in all three nations is their<br />

resilience to prosper and make<br />

lives better for the people<br />

that inhabit them. All three<br />

of these countries showed<br />

marked improvements in nine<br />

key factors that constitute a<br />

prosperous country. This is the<br />

result of the assessment of<br />

149 countries in the Prosperity<br />

Index 2018, published by the<br />

Legatum Institute.<br />

Before delving into the findings of this<br />

index, it is important to understand what<br />

prosperity stands for in a nation-based<br />

context as well as a development concept.<br />

Experts define “prosperity” as a condition<br />

or situation in which individuals<br />

from a country have better chances of<br />

flourishing or thriving – individually<br />

and as a community.<br />

Previously, this idea was heavily dependent<br />

upon the financial strength of a<br />

nation. However, it was soon realized<br />

that wealth was not the only marker<br />

for prosperity, as people from wealthier<br />

nations were still prone to be dissatisfied<br />

<strong>with</strong> their living conditions. According<br />

to the Prosperity Index, India and<br />

China are significant cases in point. Both<br />

countries have managed to perform well<br />

financially, yet their citizens are dissatisfied<br />

and do not rank high in social wellbeing.<br />

This is largely because while they<br />

have prospered in terms of per capita<br />

income, they have yet to ensure proper<br />

governance and strong institutions that<br />

guarantee an individual’s dignity and<br />

right to personal freedom.<br />

The Legatum Prosperity Index 2018<br />

Inspired from this idea, the Legatum<br />

Institute devised a nine-pillar index to<br />

gauge prosperity. This index helps to<br />

quantify abstract notions of satisfaction<br />

and success, and it provides a useful<br />

marker for leaders and policymakers<br />

who wish to improve the lives of their<br />

people and nations.<br />

“The Legatum Prosperity Index is a tool<br />

for leaders around the world to help set<br />

their agendas for growth and development.<br />

Prosperity entails much more<br />

than wealth – it is about creating the<br />

environment where a person can reach<br />

their full potential,” claims Baroness<br />

Philippa Stroud, CEO of the Legatum<br />

Institute.<br />

The index uses a mix of pillars that dictate<br />

economic growth as well as social<br />

well-being. These include Economic<br />

Quality, Business Environment, Governance,<br />

Personal Freedom, Social Capital,<br />

Safety and Security, Education, Health,<br />

and Natural Environment. These pillars<br />

help in understanding that prosperous<br />

countries not only achieve high GDPs,<br />

they are also able to constitute societies<br />

that are inclusive to all demographics,<br />

and they empower their people to make<br />

better choices that help them reach their<br />

full potential.<br />

Can it be assumed that such a model<br />

would be able to realize the localized<br />

nuances that dictate conditions in different<br />

countries around the world?<br />

“The purpose of the Prosperity Index is not<br />

only to provide a ranking of countries,<br />

but also to help shape an agenda for<br />

development,” says Stephen Brien, Director<br />

of Policy at the Legatum Institute.<br />

While commenting on the distribution of<br />

prosperity, he states that “each country<br />

is unique not only in their history of<br />

development, and culture, but also in<br />

terms of the areas that most require attention.<br />

So, how prosperity is achieved<br />

is a country-specific challenge.”<br />

It is also highlighted that prosperity is<br />

now inherent of sustainability, where<br />

“having more” is focused upon rather<br />

than “getting more.” “Our concept of<br />

prosperity is inherently sustainable –<br />

through our Natural Environment Pillar,<br />

we measure the extent to which the<br />

physical environment is preserved for<br />

future generations; and through capturing<br />

Education, we also assess the sustainability<br />

of human capital,” Brien explains.<br />

The index also highlights individual<br />

virtue as a key factor in ensuring the<br />

sustainable and equitable distribution of<br />

prosperity. This is further illustrated >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />



Flourishing and Prosperous Society<br />



SOCIAL<br />



Financial Capital Enables<br />

The Pursuit of Virtue<br />

Social Capital Drivers<br />


Source: Legatum Prosperity Index 2018 – Methodology Report<br />

in the Legatum Institute’s Methodology<br />

Report for this index: “When the<br />

economy and society operate <strong>with</strong>in a<br />

virtuous, high-trust, service-oriented,<br />

moral framework, then resources flow<br />

efficiently to the most productive people<br />

and places, for the benefit of the many.”<br />

By providing a ranking of the countries<br />

and analyzing how they perform on various<br />

pillars, the index wishes to provide a<br />

recommendation on what can or cannot<br />

work for countries, depending on their<br />

individualized characteristics. “We are<br />

increasingly ambitious about engaging<br />

directly <strong>with</strong> more of the leaders, policymakers,<br />

businesses, and advisers of the<br />

countries we research, to help identify<br />

the pathways to prosperity,” says Stroud.<br />

“But if a country is a strong performer<br />

in some pillars and a weaker performer<br />

in others, our recommendation would<br />

be to diagnose the areas of weakness,<br />

identify which aspects are the most binding<br />

constraints, and look to the success<br />

of peers to suggest pathways to adopt,”<br />

adds Brien.<br />

Key findings of the Prosperity<br />

Index 2018<br />

According to one key finding, 2018 saw<br />

global prosperity at its highest level in<br />

the 12-year history of the index. It is<br />

claimed that more people are living prosperous<br />

lives than ever before. <strong>Global</strong>ly,<br />

around 113 countries were able to rise<br />

in the index, in comparison to the year<br />

earlier. This growth translates to roughly<br />

six billion people enjoying better prosperity,<br />

around the globe, particularly since<br />

citizens in the major rising countries<br />

shared a higher level of well-being as<br />

compared to 10 years ago.<br />

Moreover, although Norway managed to<br />

maintain its spot as the most prosperous<br />

country on the index for a second year in<br />

a row, in terms of regional prosperity, it<br />

was the Asia-Pacific region that became<br />

the fastest-growing section, <strong>with</strong> Nepal,<br />

Indonesia, and India being key players.<br />

Nonetheless, although prosperity has<br />

been on the rise this year, the gap between<br />

countries that are prospering fast<br />

and those that are not has grown wider<br />

than before. According to the index,<br />

the gap between the top and bottom<br />

countries is now 10 percent wider than<br />

in 2013. The difference was also significant<br />

because whereas the 20 top<br />

rising countries had steady growth, the<br />

20 lowest countries fell sharply. There<br />

were three major pillars that showed<br />

considerable influence on the prosperity<br />

of the regions examined.<br />

80 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>




RANK<br />

1 ST – 25 TH<br />

26 TH – 50 TH<br />

51 ST – 75 TH<br />

76 TH – 100 TH<br />

101 ST – 125 TH<br />

126 TH – 149 TH<br />

Source: The Legatum Prosperity Index TM 2018<br />

➊ Safety and Security<br />

One pillar behind the dichotomy of this<br />

gap, according to the Legatum Institute<br />

team, was Safety and Security. “Among<br />

the 20 countries that rose the most<br />

this year, Safety and Security was their<br />

strongest pillar and, conversely, in the 20<br />

countries that fell the most, (this pillar)<br />

declined significantly. A nation succeeds<br />

when its leaders set and protect national<br />

priorities and work <strong>with</strong> external parties<br />

to support and align <strong>with</strong> a domestic<br />

agenda,” says Brien.<br />

These claims are backed by the Prosperity<br />

Index as well. Out of the 20 countries<br />

that performed most poorly in the index,<br />

12 of them were in the Middle East and<br />

North Africa (MENA) region. Simultaneously,<br />

they also ranked poorly in Safety<br />

and Security, since most of the present<br />

countries have been stricken by terrorism,<br />

military interventions, corruption,<br />

dictatorships, and the mismanagement<br />

of resources. All these factors contribute<br />

to greater insecurity of citizens who have<br />

to live their lives every day in fear and<br />

anxiety. It is no wonder, therefore, that<br />

insecurity is the biggest threat to global<br />

prosperity currently, and it continues to<br />

cause issues <strong>with</strong> other pillars as well.<br />

➋ Governance<br />

A lack of safety and security can also<br />

be due to inept or corrupt governance,<br />

which is also a pillar where many countries<br />

from MENA and Africa have performed<br />

poorly. Bad governance has also<br />

rendered these countries incapable of<br />

standing their ground in the face of<br />

adversity, whether man-made or natural.<br />

Citizens in most of these countries<br />

have reported their incapacity to meet<br />

basic needs such as attaining food or<br />

shelter, which is curious, since globally,<br />

malnutrition and absolute poverty >><br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />



100%<br />

1 2<br />


The wealth of the world’s billionaires<br />

increased $900 billion in the last year,<br />

which is $2.5 billion a day.<br />


Only 4 cents of every dollar in tax<br />

revenue comes from taxes on<br />

wealth.<br />

1%<br />

Last year 26 people owned the same as the<br />

3.8 billion people who make up the poorest<br />

half of humanity.<br />

In some countries, the poorest 10<br />

percent are paying a higher proportion<br />

of their incomes in tax than the<br />

richest 10 percent.<br />

80%<br />

3 4<br />


Today 262 million children will<br />

not be allowed to go to school.<br />


Every day 10,000 people die<br />

because they lack access to<br />

affordable healthcare.<br />

50%<br />

60%<br />

In Kenya, a poor girl has a 1 in 250<br />

chance of continuing her studies<br />

beyond secondary school.<br />

Life expectancy in the richest<br />

parts of São Paulo, Brazil, is 79<br />

years. In the poorest areas of the<br />

city, it is 54 years.<br />

40%<br />


The unpaid care work done by women is estimated<br />

to be $10 trillion, which is 43 times the annual<br />

turnover of Apple Inc.<br />

Men own 50 percent more of the world’s wealth<br />

than women and control more than 86 percent of<br />

corporations.<br />

Share of<br />

total wealth 20%<br />

Share of the richest 1 percent of the world’s population in total wealth<br />

Share of each tenth of the world’s population in total wealth<br />

Poorest tenth<br />

Richest tenth<br />

Source: Oxfam <strong>2019</strong>, Report on Wealth Inequality<br />

82 <strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


have gone down. This highlights the<br />

importance of an equitable distribution<br />

of prosperity, which is heavily dependent<br />

on individual virtue (a quality often<br />

lacking in the institutions that govern<br />

the people of these countries).<br />

The impact of bad governance is no<br />

longer confined to the borders of the<br />

regions in question. These countries are<br />

also becoming major sources of individuals<br />

fleeing and finding refuge elsewhere,<br />

thus contributing to the global ratio of<br />

forced migration and refugee crises. Syria,<br />

Jordan, and Lebanon are prime examples<br />

of this – where war-torn Syrians are<br />

crossing borders and fleeing to Jordan<br />

and Lebanon, both of which are struggling<br />

to maintain their own prosperity<br />

as well as catering to the needs of the<br />

refugees.<br />

➌ Business Environment<br />

This is the only pillar that increased<br />

in all regions, in various capacities. It<br />

seems that every country is focused<br />

on increasing its accessibility to business<br />

and becoming business-friendly. A<br />

productive business environment has<br />

the potential to nurture a country’s<br />

economy, provide financial security<br />

to its citizens, and empower them to<br />

make better life choices. Therefore, this<br />

pillar works as a combination of both<br />

financial strengths as well as social wellbeing<br />

– the two aspects that constitute<br />

prosperity.<br />

Countries such as Djibouti, Laos, and<br />

Malawi have been able to rise in the<br />

index largely because they were able to<br />

do the following: make their policies<br />

more amenable to young entrepreneurs<br />

who wanted to start their own businesses;<br />

provide utilities, transport facilities, and<br />

other financial resources to harness a<br />

business infrastructure; and ensure that<br />

businesses were able to attain credit at<br />

accessible rates.<br />

Way forward to prosperity?<br />

Drawing upon the factors that contributed<br />

to the growth or fall of countries<br />

in the nine selected pillars, the index<br />

highlights that ensuring safety and security,<br />

through responsible and honest<br />

leadership, is the best way for countries<br />

to attain prosperity <strong>with</strong>in their respective<br />

regions. Good leadership would not<br />

only ensure safety and security by discouraging<br />

corrupt practices and tackling<br />

violence sensibly, it would also provide<br />

enabling environments for business,<br />

personal freedom, and social well-being<br />

so that individuals can live their lives<br />

<strong>with</strong> greater stability.<br />

The Legatum Institute team summarizes<br />

it as follows in their report: “Prosperity<br />

is dependent on good leadership to<br />

identify and pursue domestic priorities,<br />

mobilizing support for a clear agenda<br />

for development. First, by providing<br />

safety and security, […] second, by nurturing<br />

their economies and ensuring that<br />

domestic savings can be the dominant<br />

source of funding for investment […]<br />

[and] third, by commercializing their<br />

economies and integrating them into<br />

global supply chains.”<br />

The report is an effective tool for leaders<br />

and policymakers to assess where<br />

they stand – both nationally as well<br />

as <strong>with</strong>in their region – and draw up<br />

the achievements of their peers to gain<br />

prosperity for themselves. “We have also<br />

engaged <strong>with</strong> policymakers and members<br />

of the diplomatic communities across the<br />

world,” adds Brien while discussing the<br />

future impact of the index, “especially,<br />

Africa, Central America, and Eastern<br />

Europe. Much of the feedback has been<br />

around the practical elements of how to<br />

use the index to help set an agenda. We<br />

will be developing more of a ‘user guide’<br />

going forward.”<br />

For further details and in-depth information,<br />

the Legatum Prosperity Index report<br />

can be accessed here: www.prosperity.com/<br />

about/resources<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong><br />



Companies are listed in alphabetic order<br />

Arab African International Bank<br />

Audi<br />

BASF<br />

Bayer<br />

Beaulieu International Group<br />

Bergen Plastics<br />

Bosch<br />

Cargolux<br />

Casinos Austria and Austrian Lotteries Group<br />

CEMEX<br />

Deloitte<br />

Deutsche Telekom<br />

EDF Group<br />

Elsewedy Electric / Iskraemeco<br />

Green Delta Insurance<br />

ING<br />

iPoint-systems<br />

Solely responsible for the editorial contributions under the<br />

heading “Good Practice” are the companies themselves.<br />

Named articles do not reflect the opinions of the publisher.<br />


MAN<br />

Manila Doctors Hospital<br />

Mazars<br />

MediaMarktSaturn<br />

Merck<br />

METRO<br />

Moelven<br />

Nomura<br />

Olam International<br />

Pernod Ricard<br />

Philia Earth<br />

Philip Morris International<br />

PUMA<br />

Sakhalin Energy<br />

Symrise<br />

The University of Manchester<br />

86<br />

88<br />

90<br />

92<br />

Arab African International Bank<br />

Audi<br />

BASF<br />

Bayer<br />

84<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


94<br />

Beaulieu International Group<br />

96<br />

Bergen Plastics<br />

98<br />

Bosch<br />

100<br />

Cargolux<br />

102<br />

Casinos Austria and Austrian Lotteries Group<br />

104<br />

CEMEX<br />

106<br />

Deloitte<br />

108<br />

Deutsche Telekom<br />

110<br />

EDF Group<br />

112<br />

Elsewedy Electric / Iskraemeco<br />

116<br />

Green Delta Insurance<br />

118<br />

ING<br />

120<br />

iPoint-systems<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 85



Throughout the years, the Arab African International Bank (AAIB) has been contributing to the<br />

community while fostering the economy through empowering young generations. As the ones<br />

who are capable of passing the torch to future generations, youth can be a compelling force for<br />

development. However, they need to be empowered <strong>with</strong> the resources and capacity to do so.<br />

Since banks constitute one of the primary pillars of any economy, they are ideal agents to play a<br />

pivotal role in youth empowerment as well as economic and social development.<br />

By Dalia Noureldin, AAIB<br />

By 2030, the target date for the 17 Sustainable<br />

Development <strong>Goals</strong> (SDGs), the<br />

youth population is projected to reach<br />

nearly 1.3 billion. This demographic<br />

transition calls for different approaches<br />

for managing resources and doing business.<br />

The financial sector has been at<br />

the forefront of empowerment through<br />

pioneering efforts such as financial inclusion<br />

and education as well as financing<br />

SMEs and microenterprises. Financial<br />

inclusion is positioned prominently as<br />

an enabler of major developmental goals<br />

in the SDGs, including <strong>Goals</strong> 1, 2, 3, 4, 5,<br />

8, 9, 10, and 17. As such, it constitutes a<br />

catalyst for economic and social development.<br />

In addition to integrating individuals<br />

into the formal financial system, it<br />

broadly fosters entrepreneurial activity,<br />

since starting and growing a business<br />

is virtually impossible <strong>with</strong>out access<br />

to financial services.<br />

In the context of our efforts to empower<br />

youth for inclusive economic growth, we<br />

focused on two major gaps. On the one<br />

hand, many individuals have the knowledge,<br />

talent, entrepreneurial capacity,<br />

and creativity but lack access to finance.<br />

On the other hand, some individuals<br />

have the financial resources but lack the<br />

business skills, which remains a major<br />

hindrance. Removing these barriers is<br />

bound to unlock growth in entrepreneurial<br />

enterprises, which – from a<br />

purely economic development perspective<br />

– creates new jobs. As part of efforts<br />

to fill this gap, and to demonstrate how<br />

empowerment contributes to socioeconomic<br />

development, AAIB has paved<br />

the way through four main impactful<br />

tracks. These include providing financial<br />

access to vulnerable groups; conducting<br />

financial education programs, even for<br />

young age groups; empowering entrepreneurs<br />

through financing SMEs and<br />

microenterprises; as well as providing<br />

technical support through incubation.<br />


Microfinance “Sandah”<br />

In 2018, AAIB inaugurated a new microfinance<br />

company named Sandah in<br />

collaboration <strong>with</strong> the SANAD Fund for<br />

MSME to allow for the financing of microenterprises,<br />

small and medium-sized<br />

enterprises (SMEs) and entrepreneurs,<br />

as well as the general lower-income<br />

clientele. This will, in turn, contribute to<br />

financial inclusion, reduce poverty and<br />

unemployment, and enhance economic<br />

well-being. Given that the future of any<br />

nation is shaped by its youth, having<br />

Sandah finance microenterprises and<br />

SMEs will encourage and empower youth<br />

to achieve their potential, contribute to<br />

the economy, and reduce unemployment.<br />

Developing branches for<br />

differently-abled<br />

AAIB has broadened the definition of financial<br />

inclusion to include not only lowincome<br />

groups but also any marginalized<br />

groups <strong>with</strong>in society. In this, the bank<br />

made a commitment to provide access<br />

and support to customers <strong>with</strong> different<br />

abilities and started developing some of<br />

its branches to serve the differently-abled<br />

<strong>with</strong> specially constructed ramps for<br />

clients <strong>with</strong> wheelchairs as well as customized<br />

teller counters that have been<br />

lowered to accommodate these clients.<br />

86<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


Today’s children and youth represent<br />

the future client base for financial institutions.<br />

In AAIB, we acknowledge that<br />

there is a lack of financial awareness,<br />

especially among younger generations.<br />

Therefore, we expanded our financial<br />

inclusion definition to include financial<br />

education.<br />

Banker 101<br />

AAIB hosted students from different<br />

stages to spend a day at our branches<br />

to introduce them to the banking terminologies<br />

and functions along <strong>with</strong><br />

simulations of these functions. They<br />

were also provided <strong>with</strong> simple booklets<br />

to facilitate their understanding of the<br />

banking system.<br />

Money Quotient Program<br />

The Money Quotient Program (MQ) is a<br />

series of educational videos produced<br />

in English and Arabic to fully educate<br />

our current and potential clients about<br />

the banking sector and how it works,<br />

for example types of loans, credit cards,<br />

mutual funds, and accounts.<br />

It was introduced on AAIB’s YouTube<br />

channel and social media platforms to<br />

maximize its reach and viewership by<br />

youth and entrepreneurs.<br />


AUC Venture Lab<br />

Business incubators contribute to the<br />

chances of success for startup companies<br />

by creating a supportive environment.<br />

Our role as a financial institution is to<br />

continue empowering the entrepreneurs,<br />

guide them on their career paths, and<br />

take over the country’s thriving entrepreneurial<br />

scene. As such, in 2013, AAIB<br />

partnered <strong>with</strong> the AUC School of Business<br />

to establish the AUC Venture Lab,<br />

the leading university-based incubator<br />

in the MENA region. The V-Lab supports<br />

early-stage startups chosen through a<br />

selection process that judges aspects of<br />

the project such as its novelty, scalability,<br />

and commercialization potential. It also<br />

considers the dedication of the team and<br />

focuses on empowering and facilitating<br />

inventors and committed entrepreneurs<br />

to help them reach their goals.<br />

CodeGeist Hackathon<br />

Since youth constitute the largest segment<br />

of the population, and given their<br />

ambition, talent, and energy, we believe<br />

that empowering youth contributes to<br />

resolving rising socioeconomic issues,<br />

including poverty, unemployment, and<br />

income inequality. As such, and based<br />

on our commitment to continually empower<br />

young generations and to utilize<br />

the latest FinTech, AAIB sponsored the<br />

CodeGeist Hackathon in 2018. The hackathon<br />

was attended by 200 undergrad<br />

students aged between 16 and 20 years<br />

old. Ideas generated from the hackathon<br />

event might encourage the development<br />

of a new business or help an existing<br />

business to grow or diversify their activities<br />

and creates job opportunities.<br />

We are proud of our progress <strong>with</strong> the<br />

majority of the SDGs and will continue<br />

to achieve more in the years leading up<br />

to 2030. This can be achieved by empowering<br />

innovators and entrepreneurs<br />

who have a great potential to achieve<br />

the SDGs by creating job opportunities<br />

and supporting economic and social<br />

development.<br />

AUC V-LAB IN<br />

NUMBERS:<br />


• 550+ JOBS CREATED<br />

• 1,700+ MENTORING & TRAINING<br />

HOURS<br />






<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 87



Audi wants to reduce its environmental impact and conserve resources along the entire value<br />

chain. With this in mind, the car manufacturer has established the principles of a closed-loop<br />

circular economy during the development, manufacture, and marketing of its products. Audi has<br />

reached an important milestone in its efforts <strong>with</strong> the Exchange 2.0 project. The company has<br />

developed a sustainable remanufacturing method for mechatronic parts and transmissions for<br />

Audi S tronic models. The focus lies <strong>with</strong> an intelligent new process that saves numerous work<br />

steps.<br />

By Susanne Lenz, Audi<br />

Audi is implementing digitalization<br />

along the entire lifecycle – from the<br />

purchase of a new car to its use and<br />

its sale. This also includes the spare<br />

parts business. The company’s goal is to<br />

digitalize its work processes in order to<br />

generate new revenue potential, increase<br />

the sustainability of its business activities,<br />

and reduce costs. These savings will<br />

enable the Ingolstadt-based carmaker<br />

to invest in future trends and offer its<br />

customers new and unexpected digital<br />

products and services.<br />

By constantly focusing on the needs of<br />

customers, digitalization is intended<br />

to enable them to easily use premium<br />

mobility. That includes quickly and economically<br />

replacing spare parts.<br />

Individual parts retain their added<br />

value<br />

Audi is showing how this works <strong>with</strong> the<br />

Exchange 2.0 project. It was developed<br />

in cooperation <strong>with</strong> the Volkswagen<br />

plant in Kassel and optimizes existing<br />

processes for remanufacturing transmissions:<br />

“In the past, we had to disassemble<br />

everything to find the fault,” explains<br />

Dominic Rattmann from Audi Product<br />

Management Genuine Parts. Not only<br />

is this process very time-consuming, it<br />

also costs a lot of money. Aside from that,<br />

at most only half of the components<br />

were reused. The rest were replaced as<br />

a precaution.<br />

That has changed now. Thanks to the<br />

new remanufacturing method, up to<br />

88<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

Conservation of<br />

up to<br />

80%<br />

of the individual parts in<br />

the value chain<br />

Reprocessing of<br />

up to<br />

20,000<br />

mechatronic parts<br />

possible<br />

Possible reduction of<br />

material usage by up to<br />

80%<br />

for gears and<br />

mechatronic parts<br />

80 percent of the individual parts in<br />

the value chain are conserved. Projected<br />

over the year, this means employees can<br />

currently reprocess up to 4,500 transmissions<br />

and 20,000 mechatronic parts. The<br />

market launch for the remanufacturing<br />

will take place during the course of <strong>2019</strong>.<br />

New process standard: Innovative<br />

and sustainable<br />

The Exchange 2.0 project was initiated<br />

by Dominic Rattmann and is the first<br />

joint remanufacturing concept from<br />

both Audi Ingolstadt and the Volkswagen<br />

Group Kassel. While the complex<br />

S tronic transmissions are being processed<br />

in Kassel, the Ingolstadt assemblies<br />

remanufacturing unit handles the<br />

mechatronic parts. That is yet another<br />

first: Mechatronic parts have never before<br />

been remanufactured in the Volkswagen<br />

Group. A total of around 40 employees<br />

from Research and Development, Genuine<br />

Parts, Finance, Production Planning,<br />

and Quality Assurance pushed the development<br />

of the program forward across all<br />

brands and developed new tools, systems,<br />

and lines for the implementation.<br />

The new process standard involves a<br />

number of different steps. First, dealers<br />

must complete a checklist if customers<br />

lodge complaints about vehicles. The<br />

list offers the first clues about possible<br />

causes of defects. Employees then analyze<br />

the data from the fault memory.<br />

The fault codes provide information on<br />

potential prior damage to the wheel set<br />

or other components: “Even at this stage,<br />

we can already search for components<br />

that should be remanufactured,” says<br />

Johann Wendl from Quality Assurance<br />

Powertrain. “Unlike in the past, parts no<br />

longer have to be replaced preventively<br />

and disposed of.” As a result, the new<br />

intelligent diagnostics saves numerous<br />

process steps that had previously been<br />

necessary. In addition, the new cleaning<br />

method removes oil from the components<br />

and provides more information.<br />

High quality standards during<br />

remanufacturing<br />

Only genuine parts that have been approved<br />

by Technical Development can be<br />

used to remanufacture the transmissions:<br />

“This sets us apart from our competitors,<br />

who sometimes do not have the option<br />

of procuring genuine parts. We have<br />

shown how replacement parts can be<br />

remanufactured at a premium level,”<br />

says Michael-Andreas Spreng, Head of<br />

Engine Remanufacturing. The transmission<br />

is then subjected to a 100 percent<br />

functional inspection on the test bench.<br />

Wendl confirms: “The tests so far have<br />

demonstrated that the remanufactured<br />

transmissions meet the quality criteria<br />

of new parts. This is also currently being<br />

verified by vehicle tests and safety runs.”<br />

With use of the methods starting in the<br />

second half of <strong>2019</strong>, Audi will achieve the<br />

conceptual process capability for the new<br />

remanufacturing method for other components<br />

as well: “As a consequence, we’re<br />

focusing on innovation leadership of our<br />

remanufactured components.” Dominic<br />

Rattmann adds: “With the Exchange 2.0<br />

project, we are embodying the circular<br />

economy in Audi distribution and are also<br />

managing to combine the strategic key<br />

areas of sustainability and digitalization.”<br />

Circular economy: Focusing on reuse<br />

The added environmental and economic<br />

value of the project is indeed impressive.<br />

The use phases of individual components<br />

are considerably lengthened through repair<br />

or reuse. Audi can reduce its overall<br />

material consumption for transmissions<br />

and mechatronic parts by up to 80 percent.<br />

The goal is for the new process to<br />

pay for itself after just one year. The<br />

industrial remanufacturing of used parts<br />

in genuine-part quality is the second approach<br />

<strong>with</strong>in the circular economy. By<br />

adding this sustainable remanufacturing<br />

process, Audi is expanding its various<br />

programs in order to advance the circular<br />

economy along the entire value chain.<br />

Audi has already introduced successful<br />

aluminum recycling projects.<br />

These projects and the current Exchange<br />

2.0 project are thus contributing directly<br />

to the sustainability strategy at Audi.<br />

Audi has also expressly committed itself<br />

to the UN Sustainable Development<br />

<strong>Goals</strong>. With the activities in the Exchange<br />

2.0 project, the company is contributing<br />

to <strong>Goals</strong> 9 (Industry, Innovation and<br />

Infrastructure) and 12 (Responsible<br />

production and consumption).<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 89




Based on our purpose “We create chemistry for a sustainable future,” we want to contribute<br />

to a world that provides a prosperous future <strong>with</strong> enhanced quality of life for everyone. But is<br />

there a way to measure this and guide management decisions in this direction? Together <strong>with</strong><br />

external experts, BASF has developed a method to perform the first monetary assessment of<br />

the economic, ecological, and social impacts of its business activities along the value chain:<br />

the “Value to Society” approach.<br />

By Christian Heller, BASF<br />

Our current economic system has created<br />

tremendous wealth for many parts of<br />

the world, but is it fit for purpose any<br />

longer? Today, a perfect storm of disruptive<br />

factors is challenging the stability<br />

of our social, environmental, and economic<br />

systems. They include increasingly<br />

globalized and connected markets; the<br />

power and influence of technologies such<br />

as the Internet of Things and Artificial<br />

Intelligence; growing inequality (particularly<br />

regarding income and wealth);<br />

and the many social and environmental<br />

challenges posed by climate change.<br />

Meeting these challenges is crucial if<br />

business is going to maintain the trust<br />

of society. This will require a systemic approach.<br />

At the moment, most businesses<br />

are still operating too much in isolation,<br />

and companies are managed based on accounting<br />

principles and concepts that are<br />

increasingly outdated, as they partially<br />

stem from the 19th century. We focus<br />

on pure financial performance while<br />

neglecting to account in real terms for<br />

the impact our activities have on the<br />

environment and society.<br />

How can our business contribute toward<br />

creating a more viable future <strong>with</strong> enhanced<br />

quality of life? That is a question<br />

we at BASF continue to ask as we assess<br />

the challenges and opportunities in front<br />

of us. Given that BASF is involved in the<br />

production of so many of the products<br />

that people around the world use every<br />

day, we believe we can play an important<br />

role in addressing some of the biggest<br />

social and environmental issues our<br />

society is facing.<br />

To do so, we need a new way of thinking<br />

about business performance – a holistic,<br />

value-based perspective that offers a<br />

better understanding of the impact<br />

of our activities throughout<br />

not only our operations<br />

but also those of our suppliers<br />

and customers.<br />

This way of thinking<br />

also requires a global<br />

perspective that<br />

assesses the impacts<br />

and value<br />

of our activities<br />

in nearly every<br />

Positive impacts<br />

on human well-being<br />

industry and country. Ultimately, the<br />

method has to identify, quantify, value,<br />

and demonstrate our economic, social,<br />

and environmental impacts as a whole<br />

(and their connection to one another)<br />

rather than in isolation.<br />

To achieve this and truly measure our<br />

value to – and impact on – the world,<br />

we created a new measurement framework<br />

called Value to Society. It measures<br />

our company performance through both<br />

the financial and non-financial busi-<br />

Negative impacts<br />

on human well-being<br />

90<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>


Net income<br />

Amortization<br />

Depreciation<br />

Taxes<br />

Wages &<br />

benefits<br />

Human capital<br />

Health & safety<br />

Air emissions<br />

GHGs<br />

Land use<br />

Waste (solid)<br />

Water<br />

consumption<br />

Water emissions<br />

Full supply chain<br />

Indirect suppliers ><br />

Direct suppliers<br />

billion € -10 0 50 bn €<br />

ness impacts in society and quantifies<br />

this through the unit of the euro. Our<br />

impact evaluation considers 12 different<br />

economic, environmental, and societal<br />

categories, including areas such as our<br />

net income, the taxes we pay, health and<br />

safety, greenhouse gas emissions, and<br />

water consumption. This enables us to<br />

value the total impacts of our business in<br />

a common language that the entire business<br />

can understand, and it helps us in<br />

applying that insight to future operations<br />

and planning. In this way, we can create<br />

an accurate measurement of BASF’s real<br />

Own operations<br />

-10 0 50 bn €<br />

Customer industries<br />

Direct customers in<br />

industries supplied by BASF<br />

-10 0 50 bn €<br />


Economic<br />

contribution<br />

Social Environmental<br />

contribution contribution<br />

2017<br />

2016<br />

2015<br />

2014<br />

2013<br />

2017<br />

2016<br />

2015<br />

2014<br />

2013<br />

2017<br />

2016<br />

2015<br />

2014<br />

2013<br />

Full supply chain<br />

Indirect suppliers ><br />

Direct suppliers<br />

Own operations<br />

Customer industries<br />

Direct customers in<br />

industries supplied by BASF<br />

billion € -20 0 50 bn € -20 0 50 bn € -20 0 50 bn €<br />

benefits and costs so that we can build<br />

on how our company contributes to the<br />

well-being of global society. With Value<br />

to Society, we follow a common purpose<br />

outlined in frameworks such as the UN<br />

Sustainable Development <strong>Goals</strong>.<br />

According to our analysis, the results<br />

show a stable distribution of economic,<br />

social, and environmental impacts from<br />

2013 to 2017. In each step of the value<br />

chain, the benefits of our business activities<br />

substantially exceed the costs to<br />

society. Economic impacts are positive<br />

along <strong>with</strong> taxes, wages and benefits,<br />

and human capital. Negative impacts<br />

are health and safety incidents as well as<br />

impacts on the environment. We strive<br />

to increase our positive contributions<br />

to society and minimize the negative<br />

effects of our business activities.<br />

By implementing the Value to Society<br />

method, we are able to visualize and<br />

share <strong>with</strong> customers, partners, and<br />

regulators both the positive and negative<br />

impacts of our total business. This gives<br />

us a pragmatic, efficient, auditable, and<br />

transferable approach to sustainable<br />

growth and provides valuable insight for<br />

everyone we do business <strong>with</strong> or interact<br />

<strong>with</strong>. In turn, this transparency enables<br />

the integrated character of our actions<br />

for more informed decision-making, and<br />

thereby contributes to BASF’s long-term<br />

success.<br />

While Value to Society is a game-changer<br />

from our point of view, we understand<br />

that there are more skeptical assessments<br />

and requests for an unbiased and balanced<br />

approach. We are open to discussions<br />

about the methodology. We agree<br />

that we need a shared and standardized<br />

impact valuation approach in order to<br />

create a level playing field. Therefore,<br />

we share our approach, experiences,<br />

and learnings <strong>with</strong> our stakeholders<br />

and standard-setting communities. Together<br />

<strong>with</strong> other companies, we plan<br />

to consolidate the current approaches<br />

and pursue the implementation of valuebased<br />

approaches in entrepreneurial<br />

decision-making processes. But companies<br />

need to be rewarded for their efforts<br />

of integrating environmental and social<br />

responsibility in their business models.<br />

This requires a bespoke regulatory environment<br />

as well as capital markets allocating<br />

resources to leading companies.<br />

Moving from the traditional shareholder<br />

value concept to a “system value” approach,<br />

we truly value the impacts and<br />

interdependencies of society and business<br />

in a comprehensive system. This<br />

system serves as our foundation for<br />

shaping the future.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 91



Bayer employees Nguyen Thi Ngoc Anh<br />

and Bui Van Kip (from left) examining rice<br />

plants <strong>with</strong> farmer Huynh Duy Chinh at<br />

Nhon Thanh Trung village in Vietnam<br />

We live in an era of distrust in which facts are becoming less and less important and political<br />

debates are increasingly driven by assertions, images, and emotions. Surveys show that people’s<br />

trust in societal institutions is declining. According to the <strong>Global</strong> Trust Report 2017 of the think<br />

tank GfK Verein, for example, only 18 percent of those surveyed in Germany have confidence in<br />

the country’s political parties, while only 30 percent trust large companies, and only 45 percent<br />

trust the media. But when there is no trust and no certainty, what should we base our decisions<br />

on? We cannot shape our future based on distrust.<br />

By Kemal Malik, Bayer<br />

Nothing stokes as much distrust as when<br />

people have the feeling that information<br />

is being <strong>with</strong>held from them for<br />

no apparent reason. At the end of 2017,<br />

therefore, Bayer began enabling access<br />

to safety-relevant information about its<br />

crop-protection activities – thus assuming<br />

a pioneering role in the industry.<br />

Summaries of test results and assessments<br />

are available for download at<br />

https://cropscience-transparency.bayer.<br />

com. Infographics and videos are designed<br />

to help viewers better understand<br />

and categorize information. Since February<br />

2018, furthermore, it has been<br />

possible to access comprehensive and<br />

detailed safety-relevant study reports,<br />

provided they are not intended for commercial<br />

use. We also made available<br />

all 107 Bayer-owned glyphosate safety<br />

study reports that were submitted to the<br />

European Food Safety Authority as part<br />

of the substance authorization process<br />

in the European Union.<br />

A bridge to the interested public<br />

Incidentally, Bayer has been honoring<br />

its commitment for many years to make<br />

information about clinical studies –<br />

including a summary of their results –<br />

available to the public. The data can be<br />

accessed using the “Bayer Trial Finder”<br />

92<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

at the homepage of our Pharmaceuticals<br />

Division www.pharma.bayer.com, as<br />

well as at www.ClinicalTrials.gov and<br />

www.clinicaltrialsregister.eu. Researchers<br />

and physicians can receive even more<br />

detailed information from us upon request.<br />

In this way, we want to address<br />

the frequently expressed criticism that<br />

pharmaceutical studies are only published<br />

if their results are advantageous<br />

for companies.<br />

These activities show how important<br />

transparency is to us. We want to give<br />

experts, engaged citizens, and other interested<br />

parties the opportunity to form<br />

their own opinions based on scientific<br />

information. In so doing, we are building<br />

a bridge between the interested public<br />

and our own scientists.<br />

Of course, transparency has its limits.<br />

Sensitive patient data from clinical trials<br />

needs to remain private. Naturally, we<br />

must also ensure that certain intellectual<br />

property does not fall into competitors’<br />

hands – our entire business model as<br />

an innovative company depends on this.<br />

We are working to find the right balance<br />

between maximal transparency and essential<br />

confidentiality.<br />

Innovations are essential for our<br />

future viability<br />

Unfortunately, very few people know<br />

how prudently the research and development<br />

of medicines and cropprotection<br />

products are undertaken<br />

today. This prudence is also reflected<br />

in the enormous investment of time<br />

and money. For example, today it costs<br />

more than €1 billion on average and<br />

can take 12 to 15 years to develop a<br />

new drug product.<br />

The situation in the crop-protection<br />

business is similar. Of the more than<br />

100,000 test substances, only one ultimately<br />

makes it to the market – after<br />

between 10 and 14 years, on average,<br />

and hundreds of registration studies that<br />

need to be conducted before a chemical<br />

active ingredient receives marketing<br />

In the Athenix laboratory Laura Schouten<br />

examines corn cobs for signs of<br />

nematodes.<br />

Julin Tong tests formulations of the active<br />

ingredient acetylsalicylic acid in the USA.<br />

authorization. The average research<br />

and development costs here are roughly<br />

€250 million.<br />

Is this enormous investment justified?<br />

At Bayer, we are convinced it is. The<br />

fact that people today are healthier and<br />

live longer than ever is due, above all,<br />

to the many advances enabled by the<br />

interplay between science and entrepreneurship<br />

and their impact on public<br />

health measures such as clean water and<br />

healthy living conditions. This will be<br />

the way of the future because there is<br />

still much to be done.<br />

For example, treatment options are still<br />

unsatisfactory for many of the approximately<br />

30,000 known diseases. Moreover,<br />

certain diseases such as cancer and<br />

cardiovascular disorders are becoming<br />

increasingly common – primarily due<br />

to increasing life expectancies. Around<br />

a billion people living in many of the<br />

world’s poorer countries suffer from<br />

what are known as “neglected” tropical<br />

diseases, such as Chagas disease, dengue<br />

fever, and river blindness.<br />

At the same time, there are an increasing<br />

number of people on the planet whose<br />

nutrition must be safeguarded – the<br />

world population is expected to rise<br />

to nearly 10 billion by 2050. Experts<br />

estimate that demand for agricultural<br />

products – food, feed, and biofuel – will<br />

rise by 50 percent by the middle of this<br />

century. As there is now very limited<br />

flexibility for the development of arable<br />

land <strong>with</strong>out endangering rainforests or<br />

other valuable natural areas, our food<br />

system must therefore become much<br />

more productive. In addition, it must<br />

also become more sustainable because<br />

we are not doing a good enough job<br />

conserving natural resources.<br />

These are just a few examples of the<br />

challenges we will face in the future. A<br />

comprehensive overview is provided by<br />

the 17 Sustainable Development <strong>Goals</strong><br />

at the heart of the United Nations 2030<br />

Agenda for Sustainable Development,<br />

which Bayer expressly endorses. We<br />

want to make substantial contributions,<br />

particularly to Goal 2, which focuses on<br />

ending hunger, achieving food security,<br />

improving nutrition, and promoting<br />

sustainable agriculture, as well as Goal<br />

3, which promotes healthy lives and<br />

well-being for all people at all ages. We<br />

must make further progress and take<br />

advantage of the benefits offered by new<br />

technologies if humanity is to achieve<br />

these goals. This requires a renewed<br />

societal consensus that innovation can<br />

be good and beneficial. Yet, such a consensus<br />

can only result from an open,<br />

sincere, and fact-based dialogue. Only if<br />

we talk <strong>with</strong> one another can we bridge<br />

the gaps that are opening up between<br />

the political camps and the “bubbles” on<br />

the internet. This completes the circle,<br />

because such a dialogue requires trust.<br />

Our efforts on behalf of transparency are<br />

intended to make a contribution to this<br />

endeavor – as a step to create renewed<br />

trust and as an investment in the future<br />

viability of society.<br />

Kemal Malik is Member of the Board of<br />

Management of Bayer AG responsible for<br />

Innovation.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 93


75 PERCENT CO 2<br />



By Emmanuel Colchen and Valérie Bouckaert, Beaulieu International Group<br />

<strong>Global</strong>ly, more and more<br />

people are moving away<br />

from the countryside and<br />

into urban areas. Big cities<br />

are becoming megacities.<br />

According to the UN, by 2050,<br />

almost 70 percent of the<br />

world’s population will be<br />

living in urban regions,<br />

metropolises, and megacities.<br />

This poses new<br />

challenges for construction,<br />

mobility, health, and<br />

sustainability at work<br />

and at home. Beaulieu<br />

International Group is<br />

following these trends<br />

intently. It has developed<br />

and is producing new types<br />

of polyamide yarns to match<br />

these growing demands<br />

for health and sustainability,<br />

specifically in carpeting.<br />

Carpets and rugs are ubiquitous: They<br />

appear as broadloom carpets, carpet tiles<br />

and rugs in homes, as well as in professional<br />

settings and vehicles, to name but<br />

a few uses. The contact surfaces of these<br />

products are often made from industrially<br />

produced yarn. Yarns were some of the<br />

very first products manufactured on an<br />

industrial scale. Their developers have not<br />

forgotten their pioneering role in innovation,<br />

and the sector is taking significant<br />

steps to reduce its carbon footprint.<br />

Chief among these companies is<br />

Beaulieu International Group’s Engineered<br />

Products division. Its EqoBalance®<br />

yarns allow a reduction by 75 percent<br />

of the total CO 2<br />

emission during entire<br />

production steps. EqoBalance® replaces<br />

non-renewable resource-based polymers<br />

in yarn creation <strong>with</strong> polymers based<br />

on renewable sources – in this case,<br />

biomass.<br />

The perfect blend of organic and<br />

synthetic<br />

Replacing non-renewable resources <strong>with</strong><br />

sustainable resources<br />

Beaulieu produces polyamide and polypropylene<br />

yarns, both of which are synthetic,<br />

as opposed to yarns from sheep<br />

or alpaca wool, for example. Synthetic<br />

yarns are made from polymers. Traditionally,<br />

these require fossil fuels to be<br />

manufactured. EqoBalance® replaces this<br />

fossil fuel component <strong>with</strong> raw material<br />

from biomass. This method is called “biomass<br />

balance” and is one of the chemical<br />

industry’s recent innovations.<br />

Our sustainable yarns are produced<br />

using the biomass balance principle that<br />

is similar to green electricity. From the<br />

very start of the supply chain, natural<br />

renewable resources such as biogass or<br />

bio-naphta are used along <strong>with</strong> fossil<br />

fuels to produce polymers that provide<br />

the basis for yarn production. The result<br />

is EqoBalance® yarns. Fossil resources<br />

needed to manufacture EqoBalance<br />

are verifiably replaced <strong>with</strong> renewable<br />

resources in the value chain.<br />

The change that requires no change<br />

at all<br />

The same quality and the same process<br />

at a lower environmental cost<br />

CO 2<br />

is one of the world’s most notorious<br />

greenhouse gases. One of its properties<br />

is that it traps heat in the atmosphere;<br />

another is that it increases acidity levels<br />

in the ocean. Industrial CO 2<br />

emissions<br />

are a globally recognized challenge,<br />

and tackling that challenge begins at<br />

the start of the manufacturing process.<br />

Using yarns that promise 75 percent<br />

fewer CO 2<br />

emissions during the production<br />

process is an attractive option. But<br />

does it change anything for the carpet<br />

manufacturer?<br />

It does not. Carpet manufacturers can<br />

use the same machines and production<br />

techniques <strong>with</strong> the EqoBalance® yarn<br />

as they would have used <strong>with</strong> traditional<br />

polyamide yarns. It requires no additional<br />

investment or product development,<br />

and it does not affect the end-product’s<br />

quality in any way.<br />

94<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

Starting out in pole position<br />

Green compliance as an increasing<br />

necessity<br />

If textile companies use EqoBalance® yarns,<br />

they already start out ahead in the race<br />

for climate action. Carpet manufacturers<br />

or carpet tile makers worldwide are also<br />

increasingly requesting products that are<br />

environmentally friendly. They want to<br />

achieve corporate sustainability goals,<br />

meet end-customer demands, or anticipate<br />

governmental regulation.<br />

Once trends gain steam and come <strong>with</strong><br />

visible benefits, they can become unstoppable.<br />

There is no telling how fast<br />

sustainable yarns may spread as part of<br />

a wave of sustainable technologies. As<br />

they build momentum in one corner,<br />

companies will look at continuing that<br />

momentum in another corner. Beaulieu<br />

International Group is also pursuing this<br />

course. Its innovations in carpet yarns<br />

that replace fossil fuels <strong>with</strong> biomass are<br />

happening concurrently <strong>with</strong> the efforts<br />

of other divisions to make recyclable<br />

event carpets or to push the envelope<br />

in reducing flooring production waste<br />

near to zero.<br />

Would you like to know more?<br />

You can visit the dedicated eqobalance.<br />

com page to learn more about emissionreductive<br />

EqoBalance® yarns for carpets.<br />

You can also go to bintg.com and check<br />

out what other initiatives Beaulieu<br />

International Group has developed<br />

or is developing to help ensure that<br />

current and future generations inherit<br />

a world that is better and more<br />

sustainable than the one we found.<br />

Emmanuel Colchen,<br />

<strong>Global</strong> Director<br />

Sales, Yarns &<br />

Technical Textiles<br />

Divisions<br />



GROUP?<br />

Beaulieu was founded in 1959 in<br />

Belgium and is a global producer of<br />

flooring solutions, engineered fibers,<br />

yarns and technical textiles, as well<br />

as polymers. The group employs<br />

more than 5,000 people worldwide<br />

and has offices and plants in 17<br />

countries across five continents.<br />

Beaulieu International Group<br />

enjoyed a 2018 turnover of €2 billion,<br />

20 percent of which came from its<br />

Engineered Products division.<br />

It is this division that created<br />

the EqoBalance® yarn, based on the<br />

biomass balance model.<br />




EqoBalance® was originally developed<br />

on request by Interface, a leading<br />

global provider of commercial flooring<br />

solutions. One of the company’s goals<br />

is to be carbon neutral by 2020 and<br />

carbon negative by 2040. According<br />

to the GlobeScan / SustainAbility<br />

Leaders Survey, for more than 20<br />

years it has been one of the world’s<br />

top companies in terms of sustainable<br />

development leadership. As such,<br />

Interface’s Straightforward II carpet<br />

tiles are created <strong>with</strong> Beaulieu’s<br />

EqoBalance® yarns and were used in<br />

the renovation of Stockholm’s<br />

Arlanda Airport, which handles about<br />

30 million passengers every year.<br />

Stockholm Arlanda Airport wants to<br />

become the leading airport in<br />

Scandinavia and become a role<br />

model for sustainability. Hence, the<br />

Straightforward II tiles <strong>with</strong> Beaulieu’s<br />

EqoBalance® yarns were a perfect fit.<br />


Beaulieu EqoBalance® yarn is the<br />

very first yarn certified by TÜV<br />

SÜD for meeting the new REDcert<br />

standard on the “use of sustainable<br />

biomass for material purposes in<br />

the chemical industry.” REDcert<br />

extended the initial scope of its<br />

standard to allow for considerations<br />

of impact. Sustainable technologies<br />

can only benefit the environment<br />

if they can be widely adopted or<br />

impact sectors <strong>with</strong> a large<br />

economic footprint (such as the<br />

tufting industry).<br />

As such, chemical companies<br />

such as Beaulieu International<br />

Group are increasingly relying on<br />

the use of sustainably produced<br />

and certified biomass to replace<br />

fossil-based raw materials.<br />

EqoBalance® has been validated<br />

and certified <strong>with</strong> an Environmental<br />

Product Declaration, meaning it<br />

complies <strong>with</strong> the ISO 14025<br />

standard.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 95




Bergen Plastics – the European market leader of child-safe packaging for laundry capsules and<br />

pouches – has taken a strategic decision: By 2022 the company will use a minimum of 50<br />

percent of post-consumer waste polypropylene in its production process. Bergen Plastics wants<br />

to play an active role in the changing market and be a leader <strong>with</strong> technology that enables it to<br />

use recycled plastic materials for its supply of high-tech child-safe packaging in Europe.<br />

Bergen Plastics takes its responsibility as a major player in this sector seriously. It wants to<br />

think and act responsibly to ensure a future for the company and the industry. The strategy is an<br />

integrated part of the company, and all future thinking and directions will be challenged to meet<br />

the targets of the strategy.<br />

By Jan Atle Lossius Ellingsen, Bergen Plastics<br />

Bergen Plastics<br />

Bergen Plastics is a Norwegian-based<br />

manufacturer of thin-walled packaging.<br />

The company was established in 1947 and<br />

is one of the pioneers in the European<br />

plastic industry. Today, the company<br />

exports more than 95 percent of its products.<br />

Its packaging can be found on most<br />

shop shelves in Europe wherever laundry<br />

capsules are sold. Every month, millions<br />

of products are transported from the factory<br />

in Bergen to locations around Europe.<br />

The management of Bergen Plastics has<br />

for several years been exploring the possibility<br />

of using recycled materials in the<br />

production process, and preferably postconsumer<br />

waste materials. There are a<br />

few good reasons for doing so: First, the<br />

company is taking an active role in the<br />

circular economy, which is an obligation<br />

the company has to European consumers;<br />

second, this opens up new markets to<br />

customers who are demanding products<br />

<strong>with</strong> lower environmental impacts.<br />

Becoming the market leader is a result of<br />

focus, dedication, and an R&D department<br />

that finds motivation and inspiration in<br />

finding solutions and overcoming challenges<br />

– because it loves the customers.<br />

In today’s market, Bergen Plastics sees a<br />

96<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

strong demand for making more environmentally<br />

friendly products, which fits<br />

perfectly <strong>with</strong> the company’s strategy. It<br />

wants to be an active part and a motivator<br />

for all companies looking to change<br />

trends and step into the circular economy.<br />

The management of Bergen Plastics has<br />

made a commitment to its owners and<br />

stakeholders to swap a minimum of 50<br />

percent of its polypropylene material<br />

consumption to post-consumer waste<br />

materials by 2022, and at the same time<br />

to develop new processing technologies<br />

and solutions that allow for reducing<br />

the amount of plastic being used per<br />

packaging unit. This is being backed up<br />

<strong>with</strong> investments in new technology, new<br />

process solutions, and R&D on child-safe<br />

solutions.<br />

For Bergen Plastics, this is not only a<br />

strategy, it is an important commitment<br />

to the Sustainable Development <strong>Goals</strong><br />

(SDGs), which the company clearly wants<br />

to work toward achieving. For Bergen<br />

Plastics, Goal 12 (Responsible consumption<br />

and production) has a clear link to<br />

the company’s strategy. This is a strong<br />

motivation for the company and its workers,<br />

and it makes it easier to communicate<br />

the strategy to customers around Europe.<br />

packaging. For Bergen Plastics and the<br />

management strategies, the goal to create<br />

child-safe packaging is closely linked<br />

to Goal 3 (Good health and well-being).<br />

Bergen Plastics wants to make packaging<br />

available that protects children from<br />

any harmful contents. If this is done in<br />

combination <strong>with</strong> a circular economy<br />

strategy of using recycled materials, the<br />

company is taking important steps toward<br />

relevant targets that the UN has made<br />

for 2030. This is important for Bergen<br />

Plastics – and for all of us.<br />

The strategy<br />

of Bergen<br />

Plastics to<br />

use postconsumer<br />

waste materials<br />

and follow<br />

developments<br />

related to the<br />

usage of recycled<br />

plastic<br />

materials in<br />

the manufacturing<br />

of childsafe<br />

packaging is<br />

important for<br />

meeting internal goals and stakeholder<br />

commitments. But most of all,<br />

it is important because the company<br />

is making active efforts to achieve the<br />

SDGs and also making partnerships to<br />

turn the world in a more sustainable<br />

direction. It is good for the world and<br />

good for business, because a sustainable<br />

business is a profitable business.<br />

Bergen Plastics sees a growing demand<br />

from the market, and several of the company’s<br />

customers have similar strategies<br />

and interests in swapping packaging volumes<br />

from virgin materials to recycled<br />

materials. This provides the confidence<br />

to invest in new technologies and focus<br />

on reaching targets by the agreed deadlines.<br />

The company sees more and more<br />

companies wanting to engage <strong>with</strong> it in<br />

partnerships and develop solutions. The<br />

reasons for doing so are often based on<br />

the same goals, such as the SDGs and the<br />

motivation to create a sustainable future<br />

for the company, because sustainable<br />

thinking is good for business.<br />

For Bergen Plastics, a company which is<br />

very much driven by innovation and bold<br />

strategies, the target is to develop better<br />

solutions and standards for child-safe<br />

Child-safe packaging = Packaging that prevents children from opening<br />

packages that can contain harmful products.<br />

Post-consumer waste materials = These are materials made of recycled<br />

consumer packaging that are cleaned and re-granulated before being used<br />

for the production of new products.<br />

Laundry capsules / pouches = These are water-soluble pouches containing<br />

highly concentrated laundry detergents. These dissolvable pouches are<br />

made of polyvinyl alcohol (PVA) or derivatives of PVA. These pods are convenient<br />

to use and comparatively more efficient than conventional liquids or<br />

powder detergents.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 97



With technology “Invented for life,” the Bosch Group aims to help in solving the challenges society<br />

faces. To secure the livelihoods of current and future generations, the company is taking smart<br />

approaches to make all of its business fields more sustainable. Bosch sees connected products<br />

and services as a way of protecting natural resources and making the lives of people around the<br />

world easier. At the same time, the company also relies on smart, innovative solutions in its<br />

interactions <strong>with</strong> associates as well as its activities related to social responsibility. With this<br />

comprehensive approach, Bosch contributes to making life, work, and mobility more sustainable.<br />

By Annette Wagner and Torsten Kallweit, Bosch<br />

For Bosch, there is no doubt that it can<br />

only do business long term in a world<br />

that is socially and ecologically intact. At<br />

all times, the company’s aim is to secure<br />

its long-term success while at the same<br />

time protecting the natural environment<br />

on which present and future generations<br />

depend. The company has set itself<br />

ambitious new targets for 2025, and it is<br />

stepping up efforts to adapt its activities<br />

to the challenges facing society. When<br />

formulating these targets, the company<br />

analyzed global megatrends and today’s<br />

most pressing sustainability issues, conducted<br />

a benchmark analysis of ecologically<br />

progressive companies, and held<br />

in-depth dialogues <strong>with</strong> stakeholders. In<br />

the future, the focus will be on six globally<br />

important issues: climate, energy, water,<br />

urbanization, globalization, and health.<br />

Health<br />

1 | Health + Safety<br />

2 | Substances of concern<br />

Climate<br />

1 | CO 2<br />

scope 1 + 2<br />

2 | CO 2<br />

scope 3<br />

Energy<br />

New Dimensions<br />

Sustainability 2025<br />

1 | Energy efficiency<br />

2 | Renewable energy<br />

Water<br />

1 | Water scarcity<br />

2 | Water quality<br />

When it comes to the climate, for instance,<br />

Bosch is committed to climate<br />

action and the Paris Agreement’s 2°C<br />

target. As a sign of this commitment, the<br />

company aims to achieve carbon neutrality<br />

globally in 2020 by focusing both on<br />

direct emissions from its own fuel combustion<br />

and indirect emissions relating to<br />

<strong>Global</strong>ization<br />

1 | Responsibility<br />

2 | Supply chain<br />

Urbanization<br />

1 | Life cycle assessments<br />

2 | Resources + Waste<br />

98<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

procured energy. In the short term, there<br />

are two key levers for achieving this: first,<br />

procuring green electricity from existing<br />

renewable energy generation facilities<br />

and, second, carbon offsets. The program<br />

will be stepped up significantly between<br />

2020 and 2030 by two additional levers:<br />

<strong>with</strong> Bosch investing 100 million euros<br />

in energy-efficiency measures each year<br />

and systematically expanding the share<br />

of new clean power. In other words, new<br />

power plants based on renewable energy<br />

will be constructed as a result of the<br />

company’s commitment. Moreover, the<br />

company’s own power generation from<br />

renewable resources will be increased at<br />

Bosch locations.<br />

Climate scenarios forecast that existing<br />

water risks will become more acute as a<br />

result of scarcity and poor quality. The<br />

company has pinpointed 61 locations in<br />

regions <strong>with</strong> water scarcity and intends<br />

to reduce its absolute water demand in<br />

those locations by 25 percent by 2025.<br />

Investments of €10 million a year will<br />

support this aim by quickly bringing<br />

about success and improvements where<br />

they are needed.<br />

Every day in our increasingly urbanized<br />

world, products are used that have<br />

an ecological impact, whether during<br />

their manufacturing processes, use, or<br />

at the end of their useful lives. To keep<br />

this footprint to a minimum, Bosch already<br />

carries out lifecycle analyses for<br />

its main product groups, which account<br />

for roughly 50 percent of its sales. The<br />

aim is to continue to broaden the scope<br />

of these analyses and to discover potential<br />

ways of further reducing products’<br />

ecological impacts, true to the idea of a<br />

closed-loop or circular economy. When<br />

it comes to waste avoidance in manufacturing,<br />

Bosch will focus in the future on<br />

reducing hazardous waste and increasing<br />

its recycling ratio.<br />

As a globally operating company, Bosch<br />

also assumes responsibility worldwide.<br />

Accordingly, Bosch also includes its suppliers<br />

in its efforts to do business sustainably<br />

and responsibly. The aim here is to<br />

continue to act <strong>with</strong> determination to<br />

tackle the ecological and social risks in<br />

the supply network.<br />

Bosch also aims to minimize risks to<br />

people’s health and their local environments<br />

– in this area, occupational safety,<br />

compliance <strong>with</strong> substance bans, and<br />

reductions in levels of hazardous substances<br />

are key considerations. In 2020<br />

at the latest, the company aims to have<br />

reduced its accident rate to a maximum<br />

of 1.7 accidents per million hours worked.<br />

Climate action by Bosch <strong>with</strong> carbon<br />

neutrality globally by 2020<br />

The focus is placed, above all, on energy<br />

efficiency and generating energy ourselves<br />

from renewable sources, as these<br />

two factors constitute the major levers<br />

for achieving our climate goal sustainably.<br />

By 2030, Bosch wants to save 1,700<br />

GWh of energy and generate 400 GWh<br />

of its energy needs itself from renewable<br />

sources. In order to also support energy<br />

efficiency measures financially, the board<br />

of management of Bosch has approved<br />

an additional annual budget of €100 million<br />

for the period 2018 through 2030.<br />

At present, Bosch’s energy consumption<br />

consists largely of electrical power used<br />

to operate plants and machinery in production;<br />

heat energy used for heating<br />

and air-conditioning in buildings; and<br />

operating furnaces at the foundries. On<br />

aggregate, Bosch Group entities used<br />

some 7,844 GWh of energy in 2018,<br />

equivalent to 3.26 million metric tons<br />

of CO 2<br />

emissions. Emissions intensity<br />

relative to added value has thus fallen<br />

by 31.1 percent compared <strong>with</strong> 2007.<br />

One important starting point on our path<br />

toward achieving climate neutrality at<br />

Bosch in 2020 is to source “green” electricity<br />

from existing facilities generating<br />

renewable energy <strong>with</strong> the corresponding<br />

guarantee of origin. We want to consistently<br />

raise the quality of the measures<br />

by 2030, focusing on new clean power<br />

– that is, exclusive long-term purchasing<br />

agreements <strong>with</strong> investors in new facilities<br />

generating renewable energy that<br />

have yet to be built (e.g., wind turbines<br />

or solar parks) and our own facilities<br />

generating renewable energy. This way,<br />

Bosch will make an additional contribution<br />

to climate protection, as these new<br />

facilities will be built only as a result of<br />

our commitment. As of <strong>2019</strong>, we have<br />

started to purchase a significantly higher<br />

proportion of electricity from renewable<br />

energy sources. To this end, we are in the<br />

process of conducting market analyses<br />

in many countries.<br />

The other important starting point for<br />

achieving our climate goal is offsetting<br />

measures (carbon credits). These are necessary<br />

to offset CO 2<br />

emissions from combustion<br />

processes (heating, process heat).<br />

In countries where the levers described<br />

above are not sufficiently available to<br />

achieve carbon neutrality (e.g., where<br />

green electricity can only be purchased to<br />

a limited extent), carbon offsets are also<br />

necessary. When choosing a project, we<br />

apply very high standards, for example<br />

the Gold Standard. Carbon offsets are to<br />

be gradually scaled back by 2030, and<br />

Bosch is stepping up investments for<br />

energy efficiency.<br />

“<br />

When it comes to the<br />

climate, words are not<br />

enough. Companies<br />

need to aim for<br />

carbon neutrality,<br />

here and now.<br />

Dr. Volkmar Denner,<br />

chairman of the board of management<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 99



In an industry as reliant on fossil fuel as aviation, Cargolux strives to make a positive difference.<br />

As an airline that is strongly committed to corporate social responsibility, Cargolux is at the<br />

forefront of technological innovation and the introduction of lean business procedures. Efficient<br />

freighters, environmental conservation, CO 2<br />

reduction, and animal welfare are among<br />

Cargolux’s top engagements toward a cleaner, more ecologically aware operation.<br />

By Jane Bretin, Cargolux<br />

Moved by its pioneering spirit, Cargolux<br />

was one of the first all-cargo carriers to<br />

make CSR an intrinsic part of its operation.<br />

From integrating sustainable principles<br />

in its business strategy, to engaging<br />

<strong>with</strong> its stakeholders, the airline has<br />

always defined its priorities <strong>with</strong> a strong<br />

sense of global responsibility. Accordingly,<br />

the company adopted the United<br />

Nations 2030 Agenda for Sustainable<br />

Development to strategically contribute<br />

to the 17 Sustainable Development <strong>Goals</strong>.<br />

True to its pioneering spirit, the company<br />

became the launch customer for the<br />

B747-8F freighter, which remains the<br />

most technologically advanced freighter<br />

operated today.<br />

A cleaner operation – one step at a time<br />

stringent environmental requirements.<br />

These included optimal fuel efficiency<br />

and significant noise-reduction features<br />

for quieter movements, thus demonstrating<br />

the airline’s commitment to the<br />

communities it operates into.<br />

In an effort to further its environmental<br />

commitment, Cargolux has established<br />

a dedicated fuel efficiency program that<br />

identifies potential savings areas. The<br />

responsible committee organises roundtables<br />

<strong>with</strong> stakeholders from across the<br />

company to encourage open discussion<br />

about how potential energy-related<br />

savings can be addressed and improved.<br />

This careful analysis has generated a number<br />

of internal procedures to further lower<br />

our carbon footprint. Optimized flight<br />

plans, tailor-made approaches, threeengine<br />

taxiing after landing, and the use<br />

of ground power during turnarounds are<br />

a sample of initiatives that contribute to<br />

both lower fuel consumption and reduced<br />

CO 2<br />

emissions. Based on recommendations<br />

from the International Air Transport<br />

Association, these measures are part of<br />

a mid- to long-term strategy that aims<br />

toward carbon-neutral growth. Cargolux<br />

has so far managed to yield significant<br />

savings in this area, exceeding the official<br />

guidelines for fuel and carbon efficiency.<br />

As an airline, reduction of CO 2<br />

emissions<br />

has become a primary area of focus in<br />

our effort to establish a greener, leaner<br />

operation. After adopting the 747-400<br />

freighter in the 1990s, Cargolux played<br />

an instrumental role in the development<br />

of Boeing’s latest wide-body freighter,<br />

the 747-8F. As the launch customer for<br />

this new, more fuel-efficient aircraft,<br />

Cargolux took part in discussions and<br />

worked closely <strong>with</strong> the manufacturer<br />

to ensure the 747-8 model respected<br />

100<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

Encouraging ethical business<br />

With the unwavering support of its<br />

upper management, Cargolux has<br />

increasingly led its operation <strong>with</strong> a<br />

strong ethical stance, especially when<br />

it comes to animal welfare. An expert<br />

in the transport of live animals, the<br />

company operates these missions in full<br />

compliance <strong>with</strong> all applicable regulations<br />

and goes one step further <strong>with</strong><br />

the establishment of stringent internal<br />

policies to ensure that animal welfare<br />

is a top priority throughout the transportation<br />

process. Over the years, the<br />

airline has developed a growing list of<br />

animal or animal-related commodities<br />

that it refuses to carry for ethical reasons.<br />

Beyond its numerous embargoes, Cargolux<br />

actively champions a more ethical<br />

business model by raising awareness<br />

about wildlife trafficking throughout<br />

its extensive network.<br />

Cargolux has a strong policy<br />

surrounding captive animal<br />

transport. The company<br />

has formerly banned<br />

all shipments<br />

of animals<br />

brought from the wild to restrictive<br />

environments, and it does not transport<br />

wildlife, especially primates, for pharmaceutical<br />

testing either. One of Cargolux’s<br />

major projects in <strong>2019</strong>, a testament to<br />

its engagement toward animal welfare,<br />

is the sponsoring of a flight to relocate<br />

two beluga whales from an entertainment<br />

park in Shanghai, China, to the<br />

world’s first open-water beluga sanctuary,<br />

in Iceland.<br />

Enhancing the legal framework for a<br />

transparent operation<br />

With business activities spanning the<br />

globe, it is vital for Cargolux to ensure<br />

that both national regulations and<br />

company-devised policies are complied<br />

<strong>with</strong> throughout its extensive network,<br />

which includes sensitive geographical<br />

areas. In order to harmonize procedures,<br />

the Cargolux Compliance and Ethics<br />

Program was launched in 2009, <strong>with</strong> a<br />

focus on due diligence. Six areas of expertise<br />

– anti-trust, bribery, embargoes<br />

and military shipments, fraud, personal<br />

data, and money laundering – were<br />

devised to ensure all potential threats<br />

were covered.<br />

As an all-cargo carrier whose core business<br />

is the transport of commodities<br />

by air, Cargolux is aware of its central<br />

position in the supply chain and its<br />

responsibility toward logistics partners.<br />

The airline is therefore intent on keeping<br />

these suppliers and service providers<br />

informed about all the latest policy or<br />

procedural updates. All staff working<br />

for the organization also undergo recurrent<br />

training to ensure a comprehensive<br />

awareness about the company’s stance<br />

toward compliance and ethics matters.<br />

A holistic approach<br />

Cargolux is committed to involving all<br />

its employees in CSR projects to promote<br />

and establish these principles at<br />

the heart of its business models. From<br />

paperless operations, lean and agile<br />

processes, and a business model focused<br />

on sustainability, we strive to weave<br />

this approach into our company DNA.<br />

Our workforce is our strongest asset,<br />

and only <strong>with</strong> their support and engagement<br />

can we built a better, greener<br />

airline.<br />

2007<br />

Cargolux signs<br />

United Nations<br />

<strong>Global</strong> Compact<br />

2008<br />

Cargolux becomes<br />

a founding<br />

member of SAFUG<br />

2011<br />

First Boeing<br />

747-8F in the<br />

company’s fleet<br />

2014<br />

First airline<br />

worlwide to be<br />

GDP certified<br />

2016<br />

First airline<br />

certified Lean &<br />

Green<br />

<strong>2019</strong><br />

Beluga whales<br />

flown back to<br />

Iceland<br />

This charter has<br />

been adopted by<br />

over 13,000<br />

companies<br />

worldwide,<br />

pledging to<br />

embrace, support,<br />

and enact a set of<br />

core values in the<br />

areas of human<br />

rights, labor<br />

standards, the<br />

environment, and<br />

anti-corruption.<br />

The Sustainable<br />

Aviation Fuel<br />

Users Group is<br />

focused on<br />

accelerating the<br />

development and<br />

commercialization<br />

of sustainable<br />

aviation<br />

biofuels.<br />

Cargolux is the<br />

launch customer<br />

of the Boeing<br />

747-8F, a<br />

state-of-the-art<br />

airplane which<br />

consumes 16%<br />

less fuel than the<br />

previous model.<br />

Its noise footprint<br />

is also 30%<br />

lower.<br />

Cargolux<br />

management<br />

system meets the<br />

requirements of<br />

the EU directive<br />

“Guidelines on<br />

Good Distribution<br />

Practice of<br />

Medical Products<br />

for Human Use,”<br />

as well as World<br />

Health Organization<br />

guidelines.<br />

The airline was<br />

recognized for its<br />

commitment to<br />

improving its<br />

carbon efficiency<br />

by 10% <strong>with</strong>in five<br />

years.<br />

Cargolux is<br />

SeaLife Trust’s<br />

official transport<br />

partner, sponsoring<br />

the flight to<br />

relocate belugas<br />

from an entertainment<br />

park in<br />

Shanghai, China,<br />

to the world’s first<br />

beluga whale<br />

sanctuary, in<br />

Iceland.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 101




As a corporate group, we take responsibility for society in<br />

Austria. We are dedicated to this issue as part of our<br />

commitment to CSR. Our group’s corporate volunteering<br />

program is also part of our CSR strategy and the Good for<br />

Austria area of activity. We aim to make a contribution and fulfill<br />

our social responsibility. This is exactly where our corporate<br />

volunteering program #ZUSAMMEN.HELFEN comes in.<br />

GROUP<br />

By Susanne Hirner, Casinos Austria and Austrian Lotteries Group<br />

The social commitment of employees has<br />

a long tradition in our corporate group.<br />

Volunteering began already in 2013: Each<br />

employee of the corporate group was<br />

granted a day to pursue humanitarian<br />

activity. The chance to engage in social<br />

activities as an integral component of<br />

the company was highly popular.<br />

In 2018 the opportunity to help others<br />

was further expanded. All employees<br />

have five days of full pay while making<br />

a social commitment and offering service<br />

to society. The new corporate program<br />

#ZUSAMMEN.HELFEN is voluntary and<br />

employees can choose from a variety of<br />

social projects. After all, personal will<br />

and commitment count. This way, both<br />

parties – the employee and the organization<br />

receiving support – can get the<br />

maximum benefit out of it.<br />

“Since 2013, when the foundations for<br />

corporate volunteering at Casinos Austria<br />

and the Austrian Lotteries were laid, our<br />

employees have spent numerous hours<br />

volunteering <strong>with</strong> heart and soul. This<br />

also shows that our social commitment<br />

Bettina Glatz-Kremsner, Director General<br />

102<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

is truly practiced and broadly supported,”<br />

says the Director General, Bettina Glatz-<br />

Kremsner.<br />

In all, a formidable 2,361 hours of social<br />

engagement were dedicated in 2018 –<br />

equivalent to around 300 eight-hour<br />

working days. Our employees spent these<br />

300 working days at various social institutions<br />

in Austria. Caritas, Red Cross, and<br />

Hilfswerk cover a wide range of auxiliary<br />

social activities. For activities in senior<br />

citizens’ homes and facilities for disabled<br />

people, empathy was needed above all<br />

else; at summer festivals <strong>with</strong> children<br />

and adolescents, physical fitness was<br />

also required. In our commitment to<br />

the social transfer organization Wiener<br />

Tafel and the social markets, the focus<br />

was primarily on collecting foodstuffs<br />

and making it available.<br />

An indispensable contribution for<br />

both sides<br />

Our corporate volunteering program<br />

#ZUSAMMEN.HELFEN benefits both nonprofit<br />

organizations and us as a company.<br />

For the nonprofit organizations, volunteer<br />

support is indispensable. Most associations<br />

in Austria are financed through<br />

sponsorship and private donations; the<br />

number of paid employees is commensurately<br />

low. “Time is money” proves<br />

wholly true in nonprofit organizations.<br />

The time donated by our employees is an<br />

enormous help for facing the ecological<br />

and social challenges of society.<br />

The aspect of meaning is the primary<br />

motive for our employees to get involved<br />

socially. In addition, we see our corporate<br />

volunteering program as a tool for<br />

employee development. By getting to<br />

know a new environment and pursuing<br />

activities unfamiliar to them, employees<br />

develop new interpersonal and professional<br />

skills and sharpen existing ones.<br />

The idea of responsibility and sustainable<br />

action has a long tradition in the Casinos<br />

Austria and Austrian Lotteries Group. At<br />

the time the company was founded, in<br />

1967, its philosophy was already based<br />

on the idea that society should benefit<br />

from gaming.<br />

Today, responsibility <strong>with</strong>in the corporate<br />

group is perceived as the sum of<br />

all CSR measures, both internally and<br />

externally. For us, CSR means making<br />

all business activities sustainable beyond<br />

legal obligations and regulations and<br />

making social responsibility a consistent<br />

principle of our actions.<br />

Our 2020 CSR strategy demonstrates our<br />

commitment to international standards<br />

of conduct, in particular the UN <strong>Global</strong><br />

Compact and the Sustainable Development<br />

<strong>Goals</strong>. It is embedded in our CSR<br />

management system in compliance <strong>with</strong><br />

the Austrian “Corporate Social Responsibility”<br />

standard ONR 192500 and shows<br />

which areas and topics are particularly<br />

relevant for us.<br />

For more information, please visit:<br />

www.casinos.at, www.lotterien.at<br />













<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 103



THE SDGs<br />

CEMEX is a global building materials company that provides high-quality products and reliable<br />

services to customers and communities. CEMEX has a rich history of improving the well-being of<br />

those it serves through innovative building solutions, efficiency advancements, and efforts to<br />

promote a sustainable future.<br />

By Martha Herrera, CEMEX<br />

Our approach to the UN Sustainable<br />

Development <strong>Goals</strong><br />

Although we contribute to the majority<br />

of the UN Sustainable Development<br />

<strong>Goals</strong> (SDGs), we also identified the goals<br />

for which we can contribute even more<br />

in order to achieve the goals by 2030.<br />

These SDGs are connected to our company’s<br />

strategy and are reflected in our<br />

company’s 2030 sustainability targets.<br />

We will continuously track and measure<br />

our progress toward these goals through<br />

key indicators and disclosures.<br />

We are convinced that by engaging <strong>with</strong><br />

these global goals through our day-today<br />

activities, we are building a better<br />

future by tackling global challenges such<br />

as poverty, inequalities, climate change,<br />

environmental changes, lack of proper<br />

education, and capability development,<br />

among others.<br />

Collaborating and sharing best<br />

practices <strong>with</strong> UN initiatives<br />

• We shared our experience in the 2018<br />

United Nations High-Level Political Forum<br />

on how multistakeholder collaborations<br />

and investments in urban areas<br />

contribute to the sustainable growth of<br />

prosperity and the reduction of poverty.<br />

• We joined the <strong>Global</strong> Board of UNISDR<br />

ARISE (UN Office for Disaster Risk Reduc-<br />


CEMEX has committed to<br />

the SDGs and identified the<br />

goals that are more<br />

connected to our strategy,<br />

impacts, risks, and<br />

opportunities.<br />

We prioritized the SDGs by<br />

analyzing their underlying<br />

targets and indicators,<br />

linking them to CEMEX<br />

2015 2017 2018<br />

materiality assessment<br />

before identifying 11 SDGs<br />

to which CEMEX can<br />

contribute directly.<br />

We selected five priority<br />

SDGs that represent<br />

opportunities to contribute<br />

more and identified new<br />

business opportunities<br />

connected to our business<br />

strategy.<br />

104<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

tion / Private Sector Alliance for Disaster<br />

Resilient Societies) to contribute toward<br />

building resilient cities and communities;<br />

fostering collaboration between<br />

academia, the public and private sectors,<br />

government, and civil society; while<br />

launching the ARISE network in Mexico.<br />

• We are further leading the UN <strong>Global</strong><br />

Compact in Mexico, encouraging more<br />

companies to become partners and to<br />

contribute and explore business opportunities<br />

while reducing negative<br />

impacts and creating shared value for<br />

society.<br />





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<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 105



<strong>Global</strong>ization, demographic change, and digitalization are disrupting societies and labor markets<br />

and provide enormous opportunities as well as the potential for a better world. However, these<br />

developments do not benefit all equally, and in some cases they occur at the expense of others.<br />

Just to name a few challenges, more than 750 million adults worldwide are unable to read and<br />

write, 200 million people are unemployed, and automation is expected to replace two billion jobs.<br />

This requires politicians and companies to search out solutions for these societal challenges to<br />

ensure participation in the progress. At Deloitte, we want to counter these trends via our biggest<br />

asset: Many Deloitte professionals are volunteering their wide-ranging expertise to groups that<br />

include immigrants, children, and care-sector workers, thereby passing on key tools to help<br />

people thrive in today’s fast-changing society.<br />

By Marius Trapp, Deloitte<br />

For refugees who are looking for work,<br />

the question of how to kick-start their<br />

professional lives in a new culture is<br />

often daunting. That stumbling block<br />

became all too obvious to Simon Schoen,<br />

a Deloitte manager, after he spoke to<br />

a friend who ran a refugee shelter. As<br />

part of a company-wide push to extend<br />

know-how to disadvantaged groups, the<br />

manager sought to shrink the gap between<br />

refugees’ aspirations and their<br />

day-to-day reality.<br />

He came up <strong>with</strong> the idea to start the<br />

“GetInSites” initiative, which organized<br />

visits to companies for young migrants,<br />

offering them a first glimpse of the working<br />

world in their adopted home. “I<br />

didn’t want to only donate money or talk<br />

about integration – I wanted to dive in,”<br />

says Schoen, whose workshops included<br />

taking a group of young Iraqis, Somalis,<br />

and Iranians to large companies from a<br />

range of different industries.<br />

“I expected a good atmosphere when<br />

our heterogeneous group met in a professional<br />

context, but it came as a big<br />

surprise that it went so well,” he says.<br />

“We all left <strong>with</strong> many new ideas and<br />

impressions.”<br />

He is one of many of Deloitte people<br />

seeking to exert social influence beyond<br />

the daily workload. Their participation<br />

forms part of the company’s WorldClass<br />

program, which seeks to empower 50<br />

million people to succeed in the rapidly<br />

changing global economy. By bringing<br />

individual specializations that range<br />

from auditing to legal services to consultancy,<br />

Deloitte is offering wide-ranging<br />

skills and support to educational and<br />

social projects.<br />

From South African startups to<br />

reflective hats<br />

Within Germany alone, the company’s<br />

staff has thrown its weight – and diverse<br />

know-how – behind a range of projects<br />

in recent years. These have included<br />

helping socially-oriented startups in<br />

Cape Town, South Africa, attract investment;<br />

assisting a school enterprise<br />

that manufactures hats <strong>with</strong> reflective<br />

pom poms; and a scheme to accompany<br />

new recruits to the care industry during<br />

their early days in the notoriously shortstaffed<br />

sector.<br />

By incorporating pro bono work into<br />

their workday, our people contribute<br />

their expertise to benefit society as a<br />

106<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

whole, effectively “making an impact<br />

that matters,” in accordance <strong>with</strong> our<br />

overarching purpose. The numbers tell<br />

the story. Some 286,000 Deloitte professionals<br />

around the globe are busy creating<br />

opportunities for those left behind.<br />

By collaborating <strong>with</strong> businesses, government,<br />

and educators, we are transforming<br />

learning and enabling individuals to<br />

hone their skills for future job demands.<br />

Our efforts are timely. Inequality and<br />

social polarization are ascending worldwide,<br />

while many are missing out on<br />

the fast-paced changes offered by technology.<br />

This predicament underscores<br />

the importance of the UN Sustainable<br />

Development <strong>Goals</strong> (SDGs).<br />


Contributing to the SDGs<br />

We are contributing toward these goals,<br />

in particular SDG 4, which strives for<br />

quality education; SDG 8, which seeks<br />

decent work and economic growth; and<br />

SDG 17, which aims at forging crosssectoral<br />

partnerships.<br />

One example of how we are pushing for<br />

these three SDGs is a project that supports<br />

refugees and migrants as they train<br />

to be nurses or caregivers. Supported by<br />

Deloitte since March 2018, the multistakeholder<br />

project was the brainchild<br />

of the St. Mary’s and St. Anna’s Hospital<br />

in the small industrial German city of<br />

Ludwigshafen am Rhein.<br />

Once a year, the Deloitte Foundation gives its Hidden Movers Award to<br />

selected educational projects. The winners not only receive prize money, but<br />

since 2015, they have also profited from made-to-measure, pro bono advice<br />

from Deloitte. Multifaceted support is given to educational projects, spanning<br />

financing, resource planning, project management, fundraising, marketing,<br />

and much more. It is a two-way street: Deloitte people also benefit from<br />

applying their specialties beyond the usual structures and from having the<br />

chance to make a real social impact.<br />

Weserholz, a project in Bremen, is among the beneficiaries of Hidden Movers.<br />

It enables refugees – mostly from Arab and African regions – to work <strong>with</strong><br />

carpentry and design specialists, helping the immigrants take initial steps<br />

toward the job market. The integration venture was awarded €25,000.<br />

We accompany these new recruits while<br />

working <strong>with</strong> them to improve their<br />

language comprehension as well as social<br />

and nursing skills. This assistance comes<br />

from a range of directions: Deloitte’s<br />

Health Care, Human Capital Advisory<br />

Services, <strong>Global</strong> Investment and Innovation<br />

Incentives, and Deloitte Digital<br />

partners all pool their expertise on a<br />

pro bono basis. As well as helping put<br />

theoretical knowledge into everyday<br />

practice, we support future nurses and<br />

caretakers during their exams, using<br />

both classical and digital approaches<br />

to learning.<br />

The project makes a dual social contribution<br />

– aiding the smooth integration<br />

of refugees while simultaneously easing<br />

the shortage of skilled workers <strong>with</strong>in<br />

the care sector. Moreover, the benefits<br />

extend to Deloitte itself, fueling an inhouse<br />

sense of pride and accomplishment.<br />

“It is a real win-win situation if,<br />

together <strong>with</strong> the partners involved, we<br />

can manage to motivate more people<br />

<strong>with</strong> a migrant background to qualify<br />

in nursing care and provide them <strong>with</strong> a<br />

customized learning concept in the long<br />

term,” says Ibo Teuber, Director of Life<br />

Sciences & Health Care. “Very compelling<br />

that Deloitte could lay a key foundation<br />

<strong>with</strong> this pro bono project.”<br />

For more information about Deloitte<br />

WorldClass, please visit: www2.deloitte.com/<br />

de/de/pages/corporate-responsibility/topics/<br />

corporate-responsibility<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 107



When we come down <strong>with</strong> a fever, we can fight it <strong>with</strong> leg compresses and effective medicines.<br />

Finding a remedy for an increasingly warming planet is more difficult. One thing is clear: Emissions<br />

of greenhouse gases must be reduced drastically. Deutsche Telekom has established a clear plan<br />

for doing so. The Group has approved new, ambitious climate-protection targets that are based on<br />

the present state of scientific knowledge: We are committed to reducing our CO 2<br />

emissions by<br />

90 percent by 2030, compared to 2017 levels. An important milestone will already be reached in<br />

2021, when the Group will source all of its electricity from renewable sources. Deutsche Telekom<br />

has also targeted indirect emissions from the supply chain and the lifecycles of our products:<br />

Emissions per customer will be cut by 25 percent by 2030, compared to 2017 levels.<br />

By Heinz-Gerd Peters, Deutsche Telekom<br />

“We want to build the future, not obstruct<br />

it,” says CEO Tim Höttges about the<br />

Group’s new climate-protection targets<br />

while speaking at the <strong>2019</strong> shareholders’<br />

meeting. “Climate protection is one of<br />

the key challenges of our age. With the<br />

new targets through 2030, we are taking<br />

our responsibility seriously and are acting<br />

decisively, quickly and, at the same<br />

time, in a sustainable manner.”<br />

A tradition of climate protection<br />

The Deutsche Telekom Group formulated<br />

its first climate-protection target back in<br />

1995 and has been firmly committed to<br />

climate protection ever since. Assuming<br />

responsibility for a low-carbon society<br />

has been one of the three main fields of<br />

action of Deutsche Telekom’s corporate<br />

responsibility strategy since 2008. The<br />

current climate-protection target expires<br />

in 2020 and is set to be reached by the<br />

To assess the quality of our internal<br />

climate targets, Deutsche Telekom also<br />

submitted them to the Science Based<br />

Targets initiative (SBTi) for review. SBTi<br />

is an independent group of experts that<br />

evaluates companies’ climate-protection<br />

targets to determine whether – on the<br />

basis of current science – they will contribute<br />

toward limiting global warming<br />

to no more than 2°C above pre-industrial<br />

levels, in line <strong>with</strong> the declarations of<br />

the UN Paris Agreement. The results of<br />

the evaluation were gratifying: SBTi approved<br />

Deutsche Telekom’s targets after<br />

a thorough review.<br />

108<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

company. As Birgit Klesper, Senior Vice<br />

President for Group Corporate Responsibility,<br />

emphasizes: “We are recording<br />

and reducing our CO 2<br />

emissions across<br />

the entire value chain, enhancing energy<br />

efficiency, increasing the share of renewable<br />

energy we use, conserving resources,<br />

and reducing environmental impacts.”<br />

Obstacles and launch pads<br />

The way to a climate-friendly society is no<br />

walk in the park. A particular challenge<br />

to meeting the Deutsche Telekom Group’s<br />

new target will be to decouple emissions<br />

from energy consumption. As a result of<br />

network buildout and increasing data<br />

volumes – due to the implementation<br />

of 5G technology, for example – energy<br />

demand will grow in the coming years.<br />

To cut emissions despite this growth<br />

in demand, the Group is taking a twopronged<br />

approach: It is implementing<br />

energy-efficiency measures and replacing<br />

obsolete, energy-intensive technologies<br />

<strong>with</strong> more efficient, modern systems, as<br />

well as sourcing renewable energy on a<br />

grand scale to operate the infrastructure.<br />

Already 2021, Deutsche Telekom will only<br />

use electricity from renewable sources at<br />

all of its sites worldwide. To achieve this<br />

target, the Group is sourcing more green<br />

electricity directly, acquiring corresponding<br />

guarantees of origin, and concluding<br />

power purchase agreements, as is the case<br />

in the United States. Whenever possible<br />

and practicable, we are also investing in<br />

our own power-generation systems. At<br />

technology sites in Germany, we were<br />

already operating more than 300 of our<br />

own solar photovoltaic plants by the<br />

end of 2018.<br />

In addition to network operations, data<br />

centers are an important factor for the<br />

Group’s power consumption. We are<br />

pooling our data traffic in just a few<br />

particularly efficient data centers. The<br />

PUE (Power Usage Effectiveness) figure<br />

is the central measure of energy efficiency.<br />

Since 2008, we have succeeded<br />

in reducing the average PUE factor at the<br />

T-Systems data centers in Germany from<br />

1.85 to 1.57. We have even set a PUE<br />

target of 1.3 for the new high-efficiency<br />

data center in Biere in the German state<br />

of Saxony-Anhalt.<br />

From these many pieces, we are building<br />

a green network that gives customers all<br />

the opportunities that digitalization has<br />

to offer, while minimizing emissions of<br />

harmful greenhouse gases at the same<br />

time.<br />

Positive leverage: The enablement<br />

factor<br />

Cutting emissions from our own operations<br />

is just one side of the coin: Smart,<br />

energy-efficient technology can also help<br />

reduce emissions among our corporate<br />

customers, companies, and consumers.<br />

Thanks to cloud computing, customers<br />

can do <strong>with</strong>out their own servers, for<br />

instance. Products such as smart household<br />

devices can help people make a<br />

contribution toward climate protection<br />

in their private lives.<br />

We at Deutsche Telekom call this the<br />

enablement factor. According to company<br />

calculations, the positive CO 2<br />

effects<br />

facilitated for customers in Germany<br />

in 2018 were 85 percent higher than<br />

the company’s own CO 2<br />

emissions (an<br />

enablement factor of 1.85 to 1). Overall,<br />

products and solutions generated positive<br />

CO 2<br />

effects for Deutsche Telekom’s<br />

customers, amounting to 12.1 million<br />

metric tons.<br />

Worldwide implementation<br />

Our climate-protection efforts have been<br />

following the motto “think globally, act<br />

locally” since the 1990s. Employees at<br />

all of the Deutsche Telekom Group’s<br />

national companies are working to make<br />

the “Magenta Giant’s” business activities<br />

more climate-friendly. Magyar Telekom,<br />

our Hungarian holding, has had a zero<br />

carbon footprint for more than three<br />

years, for example. On the other side of<br />

the Atlantic, T-Mobile USA committed<br />

back in 2017 to using renewable-energy<br />

sources exclusively by the year 2021.<br />

Beyond our direct footprint<br />

Through extensive stakeholder dialog<br />

activities, Deutsche Telekom also promotes<br />

climate protection beyond the<br />

company’s borders. In January <strong>2019</strong>,<br />

the CDP honored the company’s commitment<br />

to climate protection in the<br />

supply chain once again <strong>with</strong> a rank in<br />

the CDP’s Supplier Engagement leader<br />

board. This means Deutsche Telekom<br />

belongs to the top 3 percent of the more<br />

than 5,000 companies evaluated.<br />

Another example is the education<br />

program entitled “Ctrl-Shift: Save the<br />

Climate – Information and Communication<br />

Technologies as Allies in Climate<br />

Protection.” DT’s Greek subsidiary<br />

COSMOTE implemented this program<br />

along <strong>with</strong> the MEDITERRANEAN SOS<br />

Network (MedSOS). The program’s<br />

objective is to educate and train young<br />

people at the primary and secondary<br />

education levels, along <strong>with</strong> educators,<br />

on the ways in which information and<br />

communication technologies can contribute<br />

to energy conservation, climate<br />

change mitigation, and adaptation.<br />

During the 2017/2018 academic year,<br />

more than 1,500 students participated<br />

in the program.<br />

With these steps, the Group is working to<br />

enable the next generation and employees<br />

at other companies to pursue climate<br />

protection effectively and sustainably,<br />

beyond our own efforts, so they can<br />

#takepart in building a climate-friendly<br />

future for everyone.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 109




The EDF Group has established a number of partnerships involving civil society that it believes are<br />

essential to guaranteeing the successful implementation of its strategic project, CAP 2030.<br />

By EDF Group<br />

The EDF Group has made two interesting<br />

observations: firstly, that companies need<br />

to broaden their core business, incorporating<br />

complementary expertise to work<br />

more efficiently and more effectively;<br />

secondly, that they must increase and<br />

combine resources and skills to tackle<br />

the most pressing sustainable development<br />

issues, primarily the need to<br />

protect biodiversity as well as combat<br />

climate change and the exacerbation of<br />

vulnerabilities.<br />

That is why the EDF Group implemented<br />

a strategy 10 years ago to establish<br />

partnerships <strong>with</strong> key organizations in<br />

France and around the world working in<br />

a variety of areas – such as biodiversity,<br />

vulnerable populations, dialogue, and<br />

consultation – related to the environmental<br />

transition.<br />

Partnerships that change the way<br />

we work and prepare the future to<br />

protect biodiversity<br />

In France, the EDF Group has formed<br />

long-term partnerships <strong>with</strong> many prominent<br />

names in biodiversity, including<br />

the National Museum of Natural History<br />

(MNHN), the Society for the Protection<br />

of Birds (LPO), the natural reserves association<br />

(RNF), the International Union<br />

for Conservation of Nature (IUCN)<br />

French Committee, the Federation of<br />

National Botanical Conservatories (FCBN),<br />

the French Federation of Natural Area<br />

Conservatories (FCEN), and the French<br />

Society for the Study and Protection of<br />

Mammals (SFEPM).<br />



We strongly believe that our partners (non-profit organizations, NGOs,<br />

educational institutions, and research bodies) represent important allies<br />

in our effort to make progress and successfully reach the corporate social<br />

responsibility targets we have set for ourselves. We never lose sight of this<br />

goal as we work together on matters that are of the utmost importance<br />

not only to communities but also to EDF, such as preserving biodiversity,<br />

combating climate change, protecting vulnerable populations, and organizing<br />

consultation processes. We will all benefit from working to bring about the<br />

transition toward a more environmentally friendly, fairer, and more united<br />

society. We are not alone in thinking this way, and the time has come to act.<br />

We form partnerships to maintain a high level of expertise on complex and<br />

ever-changing issues, foster cooperation by working together on community<br />

studies or projects, and develop mutual understanding, which will ultimately<br />

enable us to communicate and move forward in a way that recognizes and<br />

celebrates our differences. Different points of view play a key part in any<br />

partnership and, more broadly speaking, any dialogue <strong>with</strong> stakeholders.<br />

Each year, we draft an annual agreement to clarify our mutual commitments<br />

in accordance <strong>with</strong> EDF’s policies and pledges on ethics, compliance, and<br />

responsible communication. That is why we establish, work in, and assess<br />

our partnerships by fostering mutual respect and trust to achieve close and<br />

effective cooperation.<br />

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<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

l’Echappée will get involved to tackle the<br />

root causes by developing, supporting,<br />

or putting at residents’ disposal easily<br />

accessible tools and methods to re-create<br />

a sense of ownership and enhance dialogue.<br />

The program may also be used to<br />

complement existing state aid schemes.<br />

EDF works <strong>with</strong> external partners to study<br />

biodiversity and make inventories.<br />

Partnerships <strong>with</strong> these representatives<br />

of civil society open the door for the<br />

Group to access world renowned expertise.<br />

For example, EDF applied MNHN’s<br />

methodology to catalog the 34,000 ha<br />

of land surrounding its hydroelectric<br />

dams. It has also worked <strong>with</strong> experts on<br />

bats and birds of prey from the SFEPM<br />

and the LPO, respectively, in an effort to<br />

reduce the impact of its wind turbines on<br />

flying creatures and consequently drive<br />

the expansion and acceptability of lowcarbon<br />

renewable energies. Furthermore,<br />

these projects expose our partners to the<br />

reality on the ground, enabling them to<br />

further develop their own expertise. By<br />

collaborating in this way, we are able to<br />

deal <strong>with</strong> new issues and take on new<br />

challenges together, such as setting up<br />

large-scale solar farms on agricultural<br />

land and in natural areas or studying<br />

the behavior of marine birds, which<br />

remains little understood, when building<br />

offshore wind farms.<br />

Partnerships that leverage social<br />

innovation to combat vulnerability<br />

Throughout the country, social innovators<br />

are developing ideas and solutions to<br />

combat vulnerability. Major corporations<br />

are not equipped to identify and assess<br />

these people championing new ideas.<br />

Neither are they able, given their sizes,<br />

to support such projects to materialize<br />

and grow. EDF forms partnerships <strong>with</strong><br />

social innovation incubators to rapidly<br />

put in place innovative business models to<br />

respond to the challenges currently being<br />

ignored by society – combating vulnerability<br />

and energy poverty, in particular.<br />

It was <strong>with</strong> this in mind that EDF initiated<br />

a partnership in 2017 <strong>with</strong> Ashoka<br />

(the world’s leading network of social entrepreneurs)<br />

in France. The partnership<br />

involves jointly organizing and financing<br />

calls for solutions – run by a regional<br />

group of incubators led by Ashoka – to<br />

identify entrepreneurs working to create<br />

a positive impact on society. Once the<br />

NGO has selected a handful of proposals,<br />

the partnership supports those entrepreneurs<br />

in developing their ideas.<br />

One of the first projects supported by<br />

EDF was put forward by the nonprofit<br />

organization l’Echappée des copropriétés<br />

in Toulouse. Their idea involved facilitating<br />

the renovation of fragile or<br />

deteriorated commonhold properties<br />

by engaging <strong>with</strong> and mobilizing the<br />

people living in these homes. Often,<br />

when ownership boards lack leadership,<br />

residents feel so disaffected that no one<br />

has the motivation to embark upon the<br />

collective renovation of the building.<br />

It is in such situations, where people<br />

keep coming up against obstacles and<br />

finding themselves at a standstill, that<br />

Makesense – encouraging communities<br />

to develop low-carbon solutions<br />

“We don’t claim to be<br />

able to change the system<br />

by ourselves, but we do<br />

strongly believe that each<br />

idea or solution, no<br />

matter how small, can<br />

have a big impact. We<br />

want to shine a spotlight<br />

on tangible action that<br />

opens the door to a<br />

positive future rather<br />

than fixating on criticism<br />

that divides us.”<br />

EDF believes that tangible solutions will<br />

arise through dialogue <strong>with</strong> communities<br />

and authorities to bring about an<br />

increasingly low-carbon, fairer economy.<br />

In 2018, the Group decided to partner<br />

<strong>with</strong> the Energies for Climate campaign,<br />

launched in 19 countries by Makesense,<br />

an international community of citizens,<br />

non-profit organizations, and entrepreneurs.<br />

The program has already organized<br />

more than 300 events (forums, debates,<br />

screenings, and themed evenings)<br />

in order to enable anyone and everyone<br />

– entrepreneurs, individuals, or policymakers,<br />

for example – to start to act<br />

collectively by developing or supporting<br />

projects that transform the way we<br />

generate, consume, and access energy.<br />

And it is working – so far, nearly 800 innovative<br />

companies have been identified<br />

by members of the Energies for Climate<br />

community, 100 of which have already<br />

received publicity or local support.<br />

edf.fr/en/meta-home<br />

makesense.org/en<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 111


The core pillars of economic growth always include health and education as drivers for<br />

developing human capital. In Egypt, this is a principle that has shaped the government’s 2030<br />

vision and will continue to shape visions for centuries to come. While on a macro level, the<br />

government continues to increase fiscal spending on health and education coupled <strong>with</strong><br />

supporting reforms, on the micro front, the private sector has been enthusiastically embracing<br />

this principle through various sustainability efforts. At Elsewedy Electric, this principle is not<br />

just embraced, it also forms the corporate ethos of the company’s expanding operations.<br />

By Manal Hassan, Elsewedy Electric<br />

As the most populous country in the<br />

Middle East, Egypt has a wealth of<br />

human resources that can be properly<br />

utilized to jumpstart a once flourishing<br />

and ever-promising economy. With a<br />

growing population, however, there is<br />

a growing need for better services and<br />

facilities to provide for the creation of a<br />

healthy, skilled, and educated workforce.<br />

This is not only necessary for economic<br />

development, but, more importantly,<br />

also for a prosperous and content society<br />

at large. Challenges exist in developing<br />

human capital in Egypt, but these<br />

challenges also present opportunities<br />

for companies to play their part in supporting<br />

the communities in which they<br />

operate – and from which they benefit.<br />

This guiding principle – that the future is<br />

truly “people” – drives Elsewedy Electric’s<br />

approach to its CSR efforts. With a measured<br />

focus on health and education, the<br />

company has undertaken various CSR<br />

initiatives to support the development<br />

of its community. The group’s CSR goes<br />

beyond donations and acts of philanthropy<br />

and looks at the social impacts of<br />

activities by all stakeholders. Although<br />

charity can ease financial burdens and<br />

provide other short-term benefits, real<br />

sustainability is rooted in long-term<br />

change. At Elsewedy Electric, CSR practices<br />

take into account the economic,<br />

environmental, and social impacts of<br />

all activities.<br />

On the health front, Elsewedy Electric’s<br />

methodology begins <strong>with</strong> a wellresearched<br />

understanding of the challenges<br />

present in the sector. Not only<br />

are upgraded facilities required, but the<br />

training of medical and administrative<br />

staff is equally vital to the proper use<br />

and maintenance of those facilities and,<br />

ultimately, for the general improvement<br />

of patient care. This understanding has<br />

allowed Elsewedy Electric to implement<br />

comprehensive initiatives consisting of<br />

physical support for facility upgrades as<br />

well as training programs to ensure the<br />

proper use and upkeep of donated equipment.<br />

For example, Elsewedy Electric<br />

has supported seven nursing institutes,<br />

allowing them to accept more students,<br />

who are provided <strong>with</strong> access to a large<br />

range of books and resources related to<br />

nursing, including medical dictionaries.<br />

Not only were the nursing schools provided<br />

<strong>with</strong> infrastructural upgrades, but,<br />

more importantly, they were provided<br />

<strong>with</strong> educational resources.<br />

Elsewedy Electric’s support to these institutes<br />

has ranged from establishing<br />

an engineering consultant office <strong>with</strong>in<br />

the institute to build new classes and<br />

other facilities, to providing dummies,<br />

paradigms, and various training tools for<br />

teachers and students, and supplying the<br />

bookstores <strong>with</strong> more resources.<br />

To date, Elsewedy Electric has supported<br />

seven nursing institutes, namely: The<br />

Abbasiya Technical Institute for Nursing,<br />

the Nursing Institute of the Chest<br />

Disease Hospital, the Nursing Institute<br />

of the Sheikh Zayed Hospital in Doweqa,<br />

the Nursing Institute of On Almasryeen<br />

Hospital, the Nursing Institute of Boulaq<br />

Al-Dakroor Hospital, the Nursing Institute<br />

of Alwarak Hospital, and the male<br />

Nursing Institute of Al Moatamadyia<br />

Hospital.<br />

Not only has Elsewedy Electric provided<br />

all of the abovementioned support to<br />

nursing institutes, but it has also built<br />

and equipped the entirety of the Legislation<br />

Association Main Hospital, a<br />

facility that offers free treatment to its<br />

community.<br />

On the education front, Elsewedy Electric<br />

has adopted a holistic approach to its CSR<br />

programs. In 2011, Elsewedy Development<br />

established the Elsewedy Technical<br />

Academy (STA), under the supervision<br />

of Egypt’s Ministry of Education. STA<br />

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<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

provides a three-year, secondary-level<br />

program of customized technical education<br />

for major electrical industries that<br />

meets international education standards.<br />

All training programs follow the German<br />

example of dual-approach training. This<br />

approach, which includes both technical<br />

and cultural subject matter, combines<br />

learning <strong>with</strong> training apprenticeships<br />

that take place both at the school and<br />

in factories.<br />

The company’s vision is to establish STA<br />

among the leading technical education<br />

institutions worldwide and to change<br />

the approach to technical education in<br />

Egypt and the region. The mission is to<br />

provide an innovative and enhanced<br />

educational program focused on developing<br />

students’ skills in order to create a<br />

pool of qualified, skilled, efficient, and<br />

professional members of the technical<br />

community to support foreign and local<br />

markets. By offering practical on-thejob<br />

training, the academy facilitates<br />

the transition from the undergraduate<br />

program to the demanding job market.<br />

STA was established <strong>with</strong> a clear understanding<br />

of the current state of vocational<br />

training in Egypt, namely its less than<br />

favorable reputation due to the growing<br />

disconnect between business needs and<br />

the current education system. With this<br />

in mind, STA applied the highest standards<br />

of quality to curriculum development,<br />

quality control, infrastructure, and<br />

the student admissions process. In 2018,<br />

STA acquired the Quality Management<br />

Certificate ISO 29990.<br />

The curriculum is implemented in a<br />

holistic way, combining on-the-job training<br />

<strong>with</strong> classroom learning to empower<br />

students <strong>with</strong> the necessary knowledge,<br />

skills, and attitudes. The current curriculum<br />

covers the fields of energy components,<br />

industrial electronics, mechanics,<br />

maintenance, and repair. In addition to<br />

a strong curriculum – and in an effort<br />

to nurture a culture of responsibility and<br />

good finance management – students<br />

are also given a monthly stipend for<br />

their personal use.<br />

Facilities at the academy include a large<br />

campus <strong>with</strong> green space, digitalized<br />

classrooms, state-of-the-art laboratories, a<br />

conference hall, and an auditorium. STA<br />

makes use of tablets, online simulations,<br />

interactive smart boards, and a digital<br />

library, and students are also provided<br />

tablets to use for distance learning when<br />

necessary. Students can rely on a close<br />

mentoring system and highly engaged<br />

teachers and supervisors.<br />

On both fronts of health and education,<br />

Elsewedy Electric’s CSR strives to not<br />

only directly help people to live better<br />

lives, but also lead the charge in actively<br />

encouraging other players <strong>with</strong>in the<br />

market to follow suit and participate in<br />

their initiatives. It is only through setting<br />

a proper example and reaching out to<br />

others to join that a sincere call to action<br />

to the entire market can be sent – to<br />

implore others to break new barriers<br />

in developing the amazing wealth of<br />

human capital that Egypt has to offer.<br />

Elsewedy Electric strives to improve the<br />

lives of all its stakeholders, whether they<br />

are employees, customers, or everyday<br />

people. Through continued strong governance<br />

and partnerships <strong>with</strong> local entities<br />

and NGOs, the company is working to<br />

better the lives of everyone, everywhere.<br />

Investment throughout the group ensures<br />

innovation, differentiates its products and<br />

services, and supports its strong commitment<br />

to sustainable development. As a<br />

global leader in custom-integrated energy<br />

solutions, the company strives to improve<br />

efficiency and cut operational costs in<br />

every country in which it operates. As<br />

energy needs are in concert <strong>with</strong> development<br />

goals across the African continent,<br />

Elsewedy Electric is taking the lead in<br />

energy accessibility so developing markets<br />

can continue to grow and prosper. >><br />

Manal Hassan is CSR and<br />

Sustainability Director<br />

at Elsewedy Electric and<br />

Vice Chair of the Elsewedy<br />

Electric Foundation.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 113




Iskraemeco is one of the leading smart metering solution providers on a global scale. Since<br />

1945, Iskraemeco employees have been transforming valuable experience, innovation, and a<br />

sound understanding of customer needs into comprehensive energy management solutions.<br />

Iskraemeco has an established network of partners, subsidiaries, and production facilities that<br />

offer reliable and efficient support services to the entire client base.<br />

By Mojca Markizeti, Iskraemeco<br />

Metering is part of the electronics and<br />

energy industry. Both are very dynamic<br />

in nature and contribute significantly<br />

to environmental and social footprints.<br />

Iskraemeco strives to build a fair smart<br />

future, together <strong>with</strong> the community.<br />

The 4.0 industrial revolution is not only<br />

about technology – it is also about values.<br />

It is a revolution of knowledge, and<br />

it will change a producer to a solution<br />

provider, a consumer to a prosumer, and<br />

competition to synergy. In the next 10<br />

years, we will work toward meeting the<br />

Sustainable Development <strong>Goals</strong> (SDGs),<br />

decarbonizing our planet, using 50 percent<br />

fewer resources, and securing the<br />

future for the generations to come.<br />

Iskraemeco’s achievements<br />

There have been product and solution<br />

footprint improvements in all phases:<br />

A) Design phase, where we embedded<br />

circular economy principles, including<br />

innovative modular designs, extended<br />

lifespans (to 20 years), lower<br />

self-consumption of energy, fewer<br />

conflict and critical materials, and<br />

at the same time increased material<br />

efficiency (20 percent less plastic, 40<br />

percent fewer metals, and 20 percent<br />

fewer electronic components<br />

per product).<br />

B) Manufacturing phase (packaging and<br />

logistics included), where investments<br />

in lean production and process optimization<br />

have reduced the use of<br />

energy, water, and other resources.<br />

Seventy percent of product mass is<br />

produced locally, and there has been<br />

a 49 percent reduction in the CO 2<br />

footprint per product since 2013. Innovative<br />

packaging excludes plastics<br />

and decreases the use of cardboard<br />

by 50 percent.<br />

C) In the use phase, increased durability,<br />

interoperability, adaptability, and upgradability<br />

decrease the CO 2<br />

footprint<br />

per product from the manufacturer’s<br />

and customer’s perspectives.<br />

D) End of lifecycle phase: The amount<br />

of materials used for the product has<br />

decreased. At the same time, products<br />

are disassembled easier and faster,<br />

the recyclability of the products is<br />

improved, and more than 90 percent<br />

of product materials can be recycled,<br />

<strong>with</strong> metals being returned back to<br />

the material loop.<br />

As a trendsetter, Iskraemeco strives toward<br />

implementing sustainability standards<br />

throughout the entire supply chain.<br />

Our aim is to monitor and coordinate our<br />

supply chain in line <strong>with</strong> environmental<br />

and social responsibility principles<br />

and follow stricter standards than the<br />

ones prescribed by law. We place special<br />

attention on demanding compliance<br />

rules, higher labor standards, material<br />

transparency (chemical composition),<br />

and forming partnerships on material<br />

and solution innovation projects. In<br />

2018 we managed to achieve 95 percent<br />

material transparency for our latest family<br />

of products.<br />

Awareness-raising and knowledgesharing<br />

are of extreme importance to<br />

Iskraemeco. Our goal is to educate our<br />

suppliers, our customers, and the industry<br />

at large and set higher sustainability<br />

standards in our industry. Iskraemeco is a<br />

participant in the United Nations <strong>Global</strong><br />

Compact initiative and acts in accordance<br />

<strong>with</strong> the ten universally accepted<br />

Principles in the areas of human rights,<br />

labor, environment, and anti-corruption.<br />

We support sustainable development<br />

practices that advocate economic growth<br />

that is in harmony <strong>with</strong> the environment<br />

and aims to improve the quality of life<br />

for its current and future inhabitants.<br />

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<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

In the last few years, we have publicly<br />

advocated for the urgency of implementing<br />

sustainability at many important<br />

conferences and fairs as well as in<br />

magazines in our industry. In 2018 we<br />

received the National Golden Innovation<br />

Award for embedding sustainability<br />

in the industry. We were nominated<br />

for the European Business Awards for<br />

the Environment 2018–<strong>2019</strong> and also<br />

received an award from the EU-LAC<br />

Foundation for the Integration of Sustainable<br />

Development <strong>Goals</strong> into Corporate<br />

Strategies. Our CEO was invited<br />

to speak at the World Forum for a Responsible<br />

Economy in 2018. Moreover,<br />

Iskraemeco has addressed more than<br />

1,200 external executives and professionals<br />

at more than 20 different events<br />

in 2018 alone.<br />

How do we make an impact?<br />

Three-pillar strategy<br />

1. Internal processes – responsible and<br />

sustainable processes, production,<br />

solutions, and company.<br />

2. Supply chain – sustainability on<br />

the level of materials, components,<br />

and suppliers.<br />

3. Knowledge transfer – building<br />

greater awareness among customers,<br />

partners, suppliers, and the industry<br />

at large.<br />


Using less materials:<br />

-20%<br />

plastic<br />

95%<br />

Transparent<br />

supply chain,<br />

to the level of chemical<br />

composition of the<br />

components<br />

-40%<br />

metals<br />

-20%<br />

electronic<br />

-50%<br />

less cardboard,<br />

Smart packaging;<br />

no plastic<br />

Decreased CO 2<br />

footprint since 2013<br />

-49%<br />

Five strategic areas<br />

• Lifecycle and recycling – Embedding<br />

circular economy principles to the design<br />

phase of our products and solutions.<br />

• Energy resources – Optimizing the use<br />

of resources: energy, water, compressed<br />

air, materials, waste management.<br />

• Material scarcity – Managing and using<br />

critical, conflict, and hazardous<br />

materials thoughtfully. Our vision is to<br />

introduce recycled materials in meter<br />

components.<br />

• Supply chain transparency – Monitoring<br />

our supply chain for material usage<br />

and defining possible improvements.<br />

• Labor conditions – Making sure that<br />

human rights, dignity, and fair treatment<br />

<strong>with</strong>in our supply chain are not<br />

compromised.<br />

Why we need to act now<br />

Looking at global challenges, we can<br />

divide them into three main areas: material<br />

scarcity, decarbonization, and ethical<br />

principles. When it comes to the electronics<br />

industry, we need to dig deeper<br />

and focus on the following five topics.<br />

• Unfair labor practices in global supply<br />

chains – Solution: It is our responsibility<br />

to act and implement fair working<br />

conditions on a global scale.<br />

• Conflict minerals used in products (gold,<br />

3 awards for<br />

sustainability<br />

Invested in research<br />

and innovation about<br />

materials, footprint<br />

1000 hours<br />

500 hours<br />

invested knowledge<br />

transfer on sustainability<br />

issues <strong>with</strong> all the<br />

stakeholders<br />

Speaker,<br />

educator at<br />

12 conferences<br />

100%<br />

embedded circular<br />

economy principles;<br />

modular, upgradable,<br />

recyclable meter<br />

tantalum, tungsten, tin, and cobalt) –<br />

Solution: Establish a transparent supply<br />

chain, close the loop of materials, educate<br />

suppliers, and innovate in product<br />

design. Despite the introduction of the<br />

Conflict Minerals legislation, this is still a<br />

pending issue in the global supply chain.<br />

• Material scarcity (27 different materials<br />

are a supply risk) – Solution: Push<br />

technological development to find substitutes<br />

for scarce materials, limit the<br />

use, and invest in material innovation.<br />

• Increasing amounts of e-waste (grows 8<br />

percent annually and only 20 percent<br />

is recycled) – Solution: Recycle and<br />

prolong the products’ lifecycles, closing<br />

the loop for materials.<br />

• Use of resources, materials, and rising<br />

CO 2<br />

footprint – Solution: Innovative<br />

product design, innovate processes<br />

and materials, minimize the use of resources,<br />

radically decrease CO 2<br />

footprint.<br />

Iskraemeco and the SDGs<br />

Goal 1 (No poverty) and Goal 3 (Good<br />

health and well-being): Working on enforcing<br />

higher labor standards through<br />

our supply chain, Goal 9 (Industry, innovation<br />

and infrastructure) and Goal 12<br />

(Responsible consumption and production):<br />

Embedding circular economy and<br />

sustainability principles to our business,<br />

our industry, and our suppliers. Goal 11<br />

(Sustainable cities and communities):<br />

With our products being part of the<br />

large Smart City infrastructure, we can<br />

significantly decrease energy consumption.<br />

Goal 13 (Climate action): Decreasing<br />

the CO 2<br />

footprint (product, processes,<br />

company, and end-user) can make a huge<br />

difference. Goal 17 (Partnerships for the<br />

goals): As a single corporation, we can do<br />

a lot, but in a community of like-minded<br />

companies, we can move mountains and<br />

build a fair smart future.<br />

Mojca Markizeti is a<br />

Sustainability Manager<br />

at Iskraemeco.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 115




Developing a microinsurance network can work as a critical step to attain directly and indirectly<br />

almost all of the Sustainable Development <strong>Goals</strong> (SDGs). Especially for developing nations, it is<br />

critical to address the micro-, meso-, and macro-level risk management for insurance in<br />

accordance <strong>with</strong> the SDGs.<br />

By Md. Moniruzzaman Khan, Green Delta Insurance<br />

As a part of microinsurance, agriculture<br />

insurance is an opportunity for<br />

the global financial industry and for<br />

direct involvement in achieving targeted<br />

SDGs. Considering the global financial<br />

industry context, agriculture insurance<br />

is one of the vital gears for supporting<br />

economic well-being. It also increases<br />

the ability of individuals, families, and<br />

governments to improve social outcomes.<br />

Following a global trend, Green Delta<br />

Insurance Company Limited (GDIC) has<br />

developed and deployed agriculture<br />

insurance to establish an industry-wide<br />

practice to comply <strong>with</strong> the SDGs. After<br />

completing three years of pilot projects<br />

<strong>with</strong> the International Finance Corporation<br />

(IFC) of the World Bank Group as an<br />

equity partner, GDIC finally launched<br />

agriculture insurance commercially in<br />

December 2018. The agriculture insurance<br />

of Green Delta shares the objectives<br />

of the global financial industry while<br />

targeting the SDGs by increasing access<br />

to investments and leveraging risks.<br />

• Access: Financial inclusion for individuals<br />

and SMEs; enable cash flow;<br />

provide financial protection; support<br />

resourceful allocation of capital (<strong>Goals</strong><br />

1, 2, 8, 10).<br />

• Investment: Investment in developing<br />

infrastructure, innovation, and technology<br />

(<strong>Goals</strong> 9, 13).<br />

• Leveraging risks: Developing innovative<br />

product pricing; sharing risk data<br />

and risk management expertise (<strong>Goals</strong><br />

11, 12).<br />

• Cross-matching: Positively influencing<br />

corporate and social governance practices<br />

– clients, distribution channels,<br />

and donors (<strong>Goals</strong> 16, 17).<br />

Whereas the pilot projects started <strong>with</strong><br />

only 200 farmers <strong>with</strong> coverage, GDIC’s<br />

agriculture insurance has now mitigated<br />

risks and provided investment security<br />

for more than 15,000 farmers (April<br />

<strong>2019</strong>).<br />

We at Green Delta believe that agriculture<br />

insurance will be able to reach half<br />

the population of Bangladesh in the<br />

future, and we will be able to provide<br />

economic security for them in addition<br />

to mitigating risks and protecting their<br />

investments.<br />

The SDG <strong>Goals</strong> targeted through our<br />

agriculture insurance are as follows:<br />

Crossing the poverty line:<br />

No poverty (Goal 1)<br />

Due to adverse weather, marginal rural<br />

farmers are always being hurt. Their efforts<br />

and investments are often at risk<br />

due to the changing climate, despite<br />

increased food demand and the evergrowing<br />

pressure to feed more mouths.<br />

With each adverse event, it is difficult<br />

to ensure food for a mass population,<br />

improve nutrition, and resist sustainable<br />

agriculture, and it is making the lives of<br />

poor farmers miserable.<br />

As experts suggest, agriculture is unique<br />

because it can be two to four times more<br />

effective than any other sector for reducing<br />

both poverty and hunger: 80 percent<br />

of food is produced by marginal rural<br />

farmers and smallholders. These rural<br />

people and farmers are counted among<br />

the 9 percent of the total population<br />

living under the poverty line.<br />

Focusing on achieving the “No poverty”<br />

goal, GDIC started working on the core<br />

of the problem by introducing agricul-<br />

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<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

ture insurance, which is called Weather<br />

Index Based Agriculture Insurance, to<br />

protect farmers from extreme adverse<br />

weather events. This way GDIC deployed<br />

an innovative financial tool that offers<br />

advance financial inclusion to support<br />

farmers in order to stabilize their financial<br />

status. For this, GDIC has developed<br />

a consortium of distributors, reinsurers,<br />

and other stakeholders. It already has<br />

engagements in 10 districts of Bangladesh,<br />

where around 15,000 farmers<br />

are insured. GDIC believes that, if the<br />

farmers have protection against adverse<br />

weather events and can overcome their<br />

financial losses instantly, then they can<br />

sustain agriculture production, thus securing<br />

the supply of food and improving<br />

nutrition. This improves financial stability<br />

and raises them above the poverty line.<br />

Celebrating a happy stomach:<br />

Zero hunger (Goal 2)<br />

No poverty and zero hunger go hand in<br />

hand. GDIC extends insurance protection<br />

to the smallholder farmers, who are the<br />

most vulnerable and mostly live under<br />

the poverty line. Through Weather Index<br />

Based Agriculture Insurance, GDIC has<br />

secured the production of smallholder<br />

farmers, availing to them the leveraging<br />

of technology such as mobile money<br />

transfers and satellite monitoring.<br />

GDIC is exploring collaborations <strong>with</strong><br />

farm aggregators, impact investors, and<br />

other associated parties to provide easy<br />

loans to the farmers. Then again, to secure<br />

the return of the loans, GDIC works<br />

toward insuring the investments of the<br />

farmers. If there is any adverse weather,<br />

GDIC makes sure that their investment<br />

is secured by paying out claims. Thus,<br />

the farmers return to the same stable<br />

position they were in before the weather<br />

event happened. This process lets farmers<br />

sustain production and satisfy food<br />

demand through uninterrupted farming.<br />

GDIC has already covered 5,206 acres of<br />

land in different locations of Bangladesh.<br />

Bridging the three “I”s: Industry, innovation<br />

and infrastructure (Goal 9)<br />

Agriculture insurance promotes the deployment<br />

of modern technology and the<br />

incorporation of infrastructure <strong>with</strong>in<br />

the process. GDIC is creating the platform<br />

for using high-end technologies<br />

such as access to the data grid, acquiring<br />

and analyzing satellite data, using<br />

interpolated data, etc. Moreover, it uses<br />

modern technology for communicating<br />

<strong>with</strong> all the stakeholders of the insurance<br />

service while providing weekly weather<br />

forecasts, crop-specific advice, and call<br />

center services to the farmers.<br />

GDIC is looking forward to incorporating<br />

more technological inventions in its<br />

services to create an app for its users:<br />

an e-platform to communicate <strong>with</strong> the<br />

stakeholder in real time. GDIC believes<br />

that investment in innovation and infrastructure<br />

is vital for overall growth and<br />

progress. That is why we are investing<br />

in innovation and infrastructure to facilitate<br />

sustainable development.<br />

Sustainable partnerships:<br />

Partnerships for the goals (Goal 17)<br />

The agriculture insurance is helping<br />

GDIC to connect <strong>with</strong> both national and<br />

foreign corporates and value-creation<br />

firms to sustain the development of the<br />

rural farmers. To create an ideal model in<br />

the industry and to promote agriculture<br />

insurance, GDIC engages <strong>with</strong> multiple<br />

stakeholders to integrate the services<br />

into one platform.<br />

GDIC has joined hands <strong>with</strong> a number of<br />

international development agencies such<br />

as International Finance Corporation<br />

(IFC), Agriculture Value Chain (AVC) –<br />

USAID and Business Finance for the Poor<br />

(BFPB) – Challenge Fund. As for NGOs,<br />

we have worked <strong>with</strong> Care Bangladesh,<br />

Oxfam, Syngenta Foundation Gram<br />

Unnayan Karma (GUK), and Eco-Social<br />

Development Organization, among<br />

others. Besides these organizations, we<br />

have also collaborations <strong>with</strong> input<br />

farms such as Seba Limited, Renaissance<br />

Enterprise, and seed company such as<br />

Supreme Seed Company Ltd., etc., to<br />

create pathways for farmers.<br />

<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong> 117




If we want to keep global temperatures from rising well-below 2°C, everyone has a role to play.<br />

As a bank committed to empowering our customers and accelerating sustainability, our primary<br />

focus is on the Sustainable Development <strong>Goals</strong> (SDGs) promoting climate action (Goal 13),<br />

sustainable and inclusive economic growth (Goal 8), and sustainable consumption and<br />

production (Goal 12).<br />

By Kaitlin Crouch and Melynda Milman, ING<br />

ING makes the most impact through<br />

the money we loan to companies and<br />

customers. We have a loan book of about<br />

€600 billion across many sectors, which<br />

we have now begun steering toward<br />

meeting the Paris Agreement’s 2°C goal.<br />

We call our strategy to get there the<br />

“Terra approach.”<br />

Here are 10 questions and answers to<br />

explain the Terra approach and how we<br />

are using it to take action on climate in<br />

line <strong>with</strong> Goal 13.<br />

1. How does ING’s Terra approach<br />

work?<br />

2. What methodology does ING use?<br />

Although ING’s Terra approach will make<br />

use of various methodologies, there is<br />

one that applies to most of the sectors<br />

in focus. This is the methodology ING<br />

co-created <strong>with</strong> the 2° Investing Initiative<br />

(2°ii), a global think tank developing<br />

climate metrics in financial markets. It<br />

is called the PACTA methodology for<br />

corporate lending. It looks at the technology<br />

shift that is needed across certain<br />

sectors to slow global warming and then<br />

measures this against the actual technology<br />

clients are using – or plan on using<br />

in the future.<br />

3. How does the PACTA<br />

methodology work?<br />

Detailed technology roadmaps for each<br />

sector are being developed by independent<br />

organizations such as the International<br />

Energy Agency. These roadmaps<br />

are used as benchmarks. An IT tool compares<br />

the data from the sector roadmaps<br />

The goal is to steer our loan book toward<br />

meeting the well-below 2°C goal of the<br />

Paris Agreement. There are sectors in our<br />

loan book that are responsible for most<br />

greenhouse gas emissions, so we focus<br />

on those: energy (oil and gas, renewables,<br />

and conventional power), automotive,<br />

shipping and aviation, steel, cement,<br />

residential mortgages, and commercial<br />

real estate. We use a specific approach<br />

per sector in order to make the most<br />

impact, partnering <strong>with</strong> leading external<br />

climate measurement experts where it<br />

makes sense.<br />

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<strong>Global</strong> <strong>Goals</strong> <strong>Yearbook</strong> <strong>2019</strong>

to data on the technology our clients<br />

are using today and planning on using<br />

in the future. In the automotive sector,<br />

for example, we measure the mix<br />

of our clients’ production of internal<br />

combustion engine vehicles compared to<br />

zero-emission vehicles and how clients<br />

plan to shift this balance over time. We<br />

then compare this <strong>with</strong> the science-based<br />

transition pathway for the sector. The<br />

analysis not only tells us what needs to<br />

shift, but also how much and by