Business leaders and entrepreneurs can unlock new market opportunities worth 5 trillion US dollars and generate 230 million jobs in Asia by 2030 through sustainable business models, according to “Better Business, Better World Asia”, a new report released at the beginning of June by the Business & Sustainable Development Commission (BSDC). This, launched in January 2016, brings together three dozen leaders from business, finance, civil society, labor and international organizations with the twin aims of mapping the economic prize that could be available to business if the Sustainable Development Goals are achieved, and describing how business can contribute to achieving them.
“Better Business, Better World Asia” is part of a series of reports, first launched in January 2017, which make the business case for the Sustainable Development Goals, or Global Goals, 17 objectives to eliminate poverty, improve education and health outcomes, create better jobs and tackle our key environmental challenges by 2030.
The research shows that, instead of being a constraint to growth, companies pursuing strategies aligned with the Global Goals could open economic opportunities across 60 “hot spots” worth up to 12 trillion US dollars and increase employment by up to 380 million jobs globally by 2030. Asia represents 40 percent of the global value, and nearly two-thirds of total jobs.
Better Business, Better World Asia breaks down the estimated 5 trillion US dollars of economic value across four key systems: Food & Agriculture: US$1 trillion, Cities: US$1.5 trillion, Energy & Minerals: US$1.9 trillion, Health & Well-being: US$670 billion. Of the total value for Asia, around 2.3 trillion US dollars could be found in China alone, 1.1 trillion in India, 1.1 trillion in developing and emerging Asia, and 0.7 trillion in developed Asia, which include Australia, New Zealand, Japan and South Korea.
“Asia’s economic transformation in recent decades is unprecedented, thanks to smart government intervention and business innovation, but the ‘Asian Century’ is threatened by persistent inequality, environmental collapse and unabated climate change,” said Mark Malloch-Brown, chair of the Business & Sustainable Development Commission. “The same ingenuity that catalysed Asia’s rise can also turn these challenges into rewards for both business and society. Better Business, Better World Asia shows that the continent already has the means to do so, it needs only the will to realise this 5 trillion US dollars opportunity.”
“The estimated value of 5 trillion – the authors say – is conservative”. Additional value could be released from other sectors, including information communication technologies (ICT), education, and consumer goods. Globally, these sectors could add a further 66 percent to the global value of 12 trillion. Pricing in environmental costs such as climate change could increase the real size of the prize by a further 40 percent. And making progress on the single global goal of gender equality in countries in Asia where women are not strongly engaged in the economy is likely to add an additional 30 percent to the economic growth of these countries.
“With the locus of global influence shifting East and South and with 40 percent of a 12 trillion US dollars prize at stake, the opportunities for businesses serving consumers in Asia are obvious,” said Paul Polman, CEO of Unilever and member of the Business Commission. “Strategies that sustainably meet the demands of the growing middle class in the region, whilst at the same time tackling urgent environmental and social challenges will ultimately be successful in unlocking market value. Aligning these strategies with the Global Goals is not just good for society and the environment, but makes strategic business sense.”
The 20 largest opportunities identified in the report account for more than 70 percent of this prize; they also vary across countries. In China and the rest of developing and emerging Asia, affordable housing presents the largest business opportunity, reflecting a large unmet need. In India, where much of the population is not covered by health insurance, risk pooling in healthcare presents the biggest opportunity. In developed Asia, creating closed-loop systems in automotive and appliances presents the biggest opportunities, due in part to the manufacturing power of Japan and South Korea. Reducing food waste in food supply chains, worth 260 million US dollars, is the largest single opportunity in food and agriculture; while low-income food markets comes in second, with a value of 190 billion.
“Feeding Asia has become an urgent priority, with its current 4.4 billion and still-growing population. Sustainable agriculture at scale has never been more crucial, even as farming participation continues to fall in Asia,” said Sunny Verghese, co-Founder and Group CEO of Olam International, and a commissioner. “We believe that businesses have a critical role to play in ensuring agriculture remains viable by partnering with smallholders who constitute the majority of Asian farmers to enable them to help feed the world sustainably.”
According to the report, 230 million jobs could be generated through SDGs-aligned business models in Asia, however, these jobs will only meet Global Goals targets if they provide decent work that creates sufficient reward and development opportunities for workers. An estimated 1.7 trillion US dollars is needed annually to develop all the opportunities across the four systems in Asia. Blended financing, where public and philanthropic bodies take on the high risk and more policy-sensitive tranches of investment, can fill the funding gap and help bring in private investors at lower risk.
“Singapore has been recently rated as the city with the highest density of greenery in a joint study by the World Economic Forum and MIT. This is not a surprise. The city has long championed a clean and green environment for her people, even as she sought to build her economy and create jobs for them. This was her path from Third World to First World,” said Ho Ching, CEO of Temasek Holdings in Singapore. “As a Singapore institution, Temasek shares the same commitment as a long-term investor and steward, to do things today with tomorrow clearly in our minds, to work towards an ‘ABC world’, which stands for an active world with a robust economy and good opportunities for all people; a beautiful world with cohesive and inclusive communities; and a clean world with fresh air, clear waters, and cool earth.”
While the business case for achieving the Global Goals is strong worldwide, Asia is particularly well placed to reap the collective benefits. It has capable businesses with value chains involving millions of enterprises, as well as governments willing and able to shape market activity and investment to achieve broad nation-building goals. In addition, many Asian cultures value protecting the environment, avoiding waste, and promoting social justice and education.
Cherie Nursalim, Vice Chairman of GITI Group, based in Southeast Asia, believes the SDGs are culturally resonant with Asian business leaders. “The Global Goals can be see through a local lens, for example, through Balinese philosophy, Tri Hita Karana, or ‘Three Ways to Happiness,’ which emphasizes harmony with people, nature, and spirit,” said Nursalim, a member of the Commission. “The Global Goals align with these age old traditions through what we call an ‘SDG Pyramid.’”