“Investment for Global Resources” the Sustainable Blueprint for Community-Based Entrepreneurship
Nowadays, corporates don’t only expect the break-even points or the profit, but also the point that we called “Impact Investing and Innovative Finance”, the new economic blueprint that would widen the perspective of corporates and community-based entrepreneurship aiming for sustainable community change. Part of Impact Investing to begin with is “Biodiversity Finance”
What is Biodiversity Finance?
When biodiversity has been wasted and used for economic advantages without any filters,
United Nations Development Programme (UNDP) collaborates with Office of the National Economic and Social Development Council (NESDB) and Office of Natural Resources and Environmental Policy and Planning (ONEP) to start a new programme “The Biodiversity Finance Initiative’ (BIOFIN).” The main objective is to preserve the biodiversity effectively and sustainably through the following process.
Evaluate the budget used for biodiversity study which includes the developments, the restorations, the researches, and the further plans from the government sector, the private sector and the civil society
Evaluate the overall budget during the process.
Evaluate the budget required between the 1st and 2nd process and organise innovative finance to cover the cost.
One of the most successful case studies about businesses that focus on the global resources is
“the Patagonia Case”, the sport outfit brand owned by Yvon Chouinard that hold a campaign called “1% for the planet.” The campaign gives away 1% of the sales to over 100 environmental and non-profit organisations all over the world. The corporate has a strong standpoint in making sustainable business to help protect the global resources by creating an advertisement that states “Don’t Buy This Jacket” which fully means don’t buy this jacket unless you need it to decrease clothing garbage in the future.
Moreover, the company uses 100% organic cotton fabric and hold on to the fair trade policy. Many of their factories utilise renewable energy like solar and wind. Their buildings were built of recycled materials and passed the green building standard by “LEED (Leadership in Energy and Environmental Design)” Besides, Patagonia arranges activities for everyone from senior executives to junior officers to contribute to environment like river restoration, anti-oil drilling programme. The crew hope that they can be part of the jigsaw to maintain world’s ecology.
Biodiversity Finance is just one example of Impact Investing and Innovative Finance. There are still many ways we can invest on impact, for example we can invest on people, on society or even on wild animals. Therefore we can sustainably drive economy forward along with maintaining world’s ecology for the better future.
Written by Aphinya Siranart, Head of Exploration, UNDP Thailand
‘Business as usual’ is no longer acceptable, and certainly not conducive to the creation of a sustainable future.
The business context has changed significantly in the last decade and is set to change further in the coming years as stakeholders bring their growing influence to bear. Consumers, employees, and other stakeholders, especially millennials, are becoming even more environmentally and socially conscious. Not only are they increasingly holding companies to account for their performance on various socioeconomic issues, but they are also voicing their expectations for companies to contribute to solve the most complex challenges of our time in view of supporting the achievement of the Sustainable Development Goals (SDGs).
“The markets of tomorrow are defined by the SDGs, because they are focused on the challenges that, together with the business world, we can turn into solutions, and therefore markets for technology, for investment, for new business models.”
– Achim Steiner, Administrator, United Nations Development Program (2018)
The differing needs and values of all stakeholders demand management to adopt a wider perspective of growth, which goes beyond increased output and short-term financial returns. Recognizing that they will not succeed in failed societies, companies are balancing economic gains with social and environmental returns while also striving for an inclusive, sustainable, and long-term growth that benefits everyone – consumers, employees, supplies, shareholders, and communities alike.
By doing so, companies are not really sacrificing performance. In fact, they can do well while doing good. Many studies have found positive correlations between superior financial performance and commitment to environmental, social, and governance (ESG) issues.[1] Researchers at Harvard Business School found that companies with processes in place since the early 1990s to measure, manage, and communicate performance on ESG issues outperformed a carefully matched control group over the next 18 years.[2] A 2017 study by Nordea Equity Research reported that from 2012 to 2015, companies with the highest ESG ratings outperformed the lowest-rated firms by as much as 40%.[3]
“To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Without a sense of purpose, no company, either public or private, can achieve its full potential”
– Larry Fink, CEO, Blackrock (2018)
Amid the COVID-19 pandemic, the role of the private sector in supporting the achievement of sustainable human development is even more imperative today than ever before. It presents a unique opportunity for businesses to step up and turn this crisis into an impetus to achieve the SDGs. As a main source of employment and investment, the business sector plays a crucial role in efforts to protect their employees, contribute to a clean environment, support the vulnerable people, and facilitate business continuity for an inclusive, green and sustainable recovery
With these changing business environments, profits alone are no longer the measure of success and businesses must increasingly engage in sustainability reporting and impact measurement and management to improve performance, account for impact and publicly communicate sustainability data. While sustainability reporting and impact measurement both drive companies to improve performance and be more transparent, they have arisen in distinct contexts and have differences in their approach and focus.
A sustainability report is “a report published by a company or organization about the economic, environmental and social impacts caused by its everyday activities. It presents the organization’s values and governance model, and demonstrates the link between its strategy and its commitment to a sustainable global economy.” (Global Reporting Initiative: GRI) Sustainability reporting enables organizations to identify their impact on the economy, environment, and society and disclose them in accordance with a globally accepted standard.
It is encouraging to see many Thai business having sustainability strategies, policies and codes of conduct in place with good ESG disclosure practices. While ESG guidelines provide a good starting point for sustainable business, it is not enough to help unlock the enormous potential of the private sector as a driver of positive social impact. The taxonomy is weak and the criteria for sustainability lens are not ambitious enough. ESG frameworks have focused mainly on policies and processes and provided basic reporting whether qualitatively or through a selection of ESG related KPIs. It gives minimal directions, especially for investors, to measure impact as well as track and compare progress between different companies. McKinsey’s survey revealed that investors believe that “they cannot readily use companies’ sustainability disclosures to inform investment decisions and advice accurately.”[4]
On the other hand, being an impactful sustainable business means fully integrating sustainability into the business strategy, operations, stakeholder engagement and supply chain management and hence the need for companies to properly conducting impact measurement and management (IMM). IMM allows companies to demonstrate and communicate impact and to make sure they are on mission rather than just for compliance or transparency.
So what is Impact Measurement and Management (IMM)?
According to the Global Impact Investing Network (GIIN), “Impact Measurement and Management includes identifying and considering the positive and negative effects one’s business actions have on people and the planet, and then figuring out ways to mitigate the negative and maximize the positive in alignment with one’s goals”.
One of the defining challenges for impact practitioners has been the question of what, exactly, “impact” means and how best to deliver it. Without clear answers, it creates a source of inefficiency and misalignment between different players from beneficiaries to enterprises to financial intermediaries and to the owners of capital.
SDGs as a reference framework for Measuring and Managing impact
Back in 2015, the United Nations’ adoption of SDGs as a global vision for sustainable development was an absolute game changer in this field. Not only that the SDGs provide globally agreed definitions and disciplines for setting impact goals and tracking progress against them, but they also give businesses the targets they need to achieve concrete, positive impacts that truly leave no one behind. Consequently, we have seen more and more businesses start thinking of their impact in terms of contributions towards achieving the SDGs.
“Business is a vital partner in achieving the Sustainable Development Goals. Companies can contribute through their core activities, and we ask companies everywhere to assess their impact, set ambitious goals and communicate transparently about the results.”
– Ban Ki-moon, Former United Nations Secretary-General (2015)
Impact in the context of SDGs is increasingly becoming an integral component in business decision making along with revenue and risk considerations. Just as financial reporting is essential for companies to inform their strategies, measuring and managing the SDG impact of a company is becoming relevant as stakeholders, other than shareholders, pursue higher standards of responsibility and accountability from businesses.
Beyond the need to heed society’s call for increased transparency and accountability, blending purpose with profit and integrating SDG impact measurement and management framework into business operations and strategies can provide companies with several benefits as follows:
Unlocking new business opportunities: The framework can help businesses identify new market segments, spot unmet customer needs, and as a result, develop and refine product and services offerings that are better tailored to customers’ needs. For example, by adopting such an IMM approach with the support from UNDP Business Call to Action, Thailand based social enterprise, Hilltribe Organics – a subsidiary of major organic food producer Urmatt Ltd., was able to identify a demand for organic egg.[5] Hilltribe has become the number one organic egg brand in Thailand and is now sold in major supermarkets as well as high-end restaurants and hotels. The enterprise is on the path to scaling up its inclusive business model by integrating more indigenous communities across Thailand into its agricultural value chain, thereby opening up new sources of revenue for its business as well as creating additional off-farm employment in food production.
Marketing and reputational building: Impact data allow businesses to better understand their customers, create more effective marketing campaigns, and as a result, increase customer engagement. Plan B Media, Thailand’s biggest outdoor media company, is committed to sustainable marketing strategies and creating business value by meeting stakeholders’ expectations. Acknowledging that digital media need to go beyond providing advertising and include content for public benefits, Plan B is partnering with UNDP to launch a series of campaigns that further the SDGs in Thailand such as ending violence against women and combating single use plastics.[6]
Strategic alignment and risk mitigation: The practice can ensure that companies’ activities are aligned with their mission and strategy as well as help identify risks that relate to both impact and financial concerns early on, thereby offering businesses an opportunity to correct action and prevent losses.
IMM can be challenging if companies have never done it before and have no clue where to start. However, by realizing various benefits that IMM may bring, UNDP, through its Business Call to Action (BctA) initiative, has developed an online Impact Lab to support companies to effectively measure and manage their impact on the SDGs.[7] The Lab goes through the full impact management process over four self-paced modules that guide companies from assessing impact measurement readiness; planning for measuring impact and designing an impact framework; monitoring impact data; to analysing and reporting impact data. Through a step by step process, companies can define their Impact Value Chain linking business operations to the SDGs, designing their own SDG impact framework with a plan for collecting data that will allow them to measure, manage and communicate their impact.
About UNDP
The United Nations Development Programme (UNDP) is the United Nations’ global development network. UNDP works in about 170 countries and territories, helping to achieve the eradication of poverty, and the reduction of inequalities and exclusion. Through assisting countries to align private sector activities and investments with the 2030 Agenda, UNDP has a long history of working successfully with companies from various sectors including energy, food and agriculture, consumer products, finance and information technology, in support of sustainable development.
In Thailand, our collaboration with the private sector takes various forms:
Facilitate discussions between public and private sector and the civil society on a specific development theme or industry sector;
Find solutions for development challenges through core business activities and initiatives that include low-income groups into value chains as producers, suppliers, employees and consumers;
Mobilize private sector financial and in-kind resources for sustainable development solutions;
Leverage innovative financing and partnerships solutions to mobilize private capital for the implementation of the SDGs;
Provide businesses and investors with the insights and tools they need to measure, manage, and authenticate their contributions toward achieving the SDGs.
For more information, please contact Ms. Aphinya Siranart, Head of Exploration at aphinya.siranart@undp.org
[1] Mozaffar Khan, George Serafeim, Aaron Yoon, Corporate Sustainability: First Evidence on Materiality. The Accounting Review (2016) 91 (6): 1697–1724.
[2] Eccles, Robert G. and Ioannou, Ioannis and Serafeim, George, The Impact of Corporate Sustainability on Organizational Processes and Performance (December 23, 2014). Management Science, Volume 60, Issue 11, pp. 2835-2857, February 2014. Available at SSRN: https://ssrn.com/abstract=1964011 or http://dx.doi.org/10.2139/ssrn.1964011
SDGs in Action for Sustainable Tourism at Plean Yod Tarn Community with APYE
A mention of a coconut farm may bring to mind a picture of fresh, full coconut in your hand, ready to quench your thirst. But that very coconut has more to offer: coconut oil that is added to skincare products, the meat of mature coconuts that are extracted for coconut milk, or coconut blossoms – chan in Thai – from which the sap is used to make coconut sugar. In search of 100% natural coconut sugar, we went to a local farm and we saw all the hard work that goes into making it. It is no exaggeration to say all-natural coconut sugar is hard to come by nowadays.
We had an opportunity to follow the coconut farmers at Nang Ta Khian Sub-district, Samut Songkhram Province along with a group of young people from different countries thanks to the Asia Pacific Youth Exchange (APYE) program’s collaboration with the United Nations Development Programme (UNDP). In this sixth iteration of the exchange program in Thailand, the youth got to stay with the local community for one week.
We learned how to make coconut sugar from our hosts, a new generation of farmers who have enlisted the locals to preserve their community’s traditional knowledge before it faded away with time. The young farmers asserted the value of their local heritage and resources, and eventually were able to strengthen the bond of the community. On top of getting to be a farmer for a day, we gained an insight into the community’s genial and harmonious way of life – all reflected in the warm smiles of the aunts and uncles we met.
Equally important is being on the ground to explore the community and learn about various issues relevant to development through talking and working with the people in the community. This opened up an opportunity for the youth participants to discuss and become part of community development. They were able to present ideas and proposals for the locals to take up to promote sustainable tourism in accordance with Sustainable Development Goals (SDGs), the United Nations’ global goals for a better world.
You may have heard about sustainable tourism before, and you may wonder how we can promote tourism while balancing economic, social and environmental development, and ensuring participation from community members, the government, private sector, and tourists to protect the community’s livelihood and quality of life.
Let’s hear from Chareef Wattana, a law student at Thammasat University and one of this year’s APYE youth participants.
Why did you decide to apply to the APYE program?
One of the courses I’ve taken at Thammasat is Civic Engagement (TU100) so I’ve learned the basics of the Sustainable Development Goals. Thammasat is a university that cares about the environment and sustainability, which is very much aligned with the objectives of APYE.
“So being part of the program, I got to apply what I’ve learned to real work, theory to practice. I got to conduct a survey, identify problems in the community, and come together with youths from different countries to find possible solutions from our diverse perspectives.”
What is Plean Yod Tarn’s approach to sustainable development?
Plean Yod Tarn is a community-based social enterprise that was started by two young farmers together with the elders in Nang Ta Khian. Their initiative has led to better economy and livelihood for the community. Their product is environmentally friendly and that is a stepping stone to achieving other SDGs.
“First, I think it’s about participation. Because to mobilize actions for the SDGs, it takes more than a single person; it needs participation from different actors, from community leaders, people in that community, to young people. All of them are stakeholders when it comes to developing a particular community.”
What is the goal of sustainable tourism?
Attracting tourists to create jobs and income would advance the economy of the community. But we should keep in mind that their visits would not disrupt the locals’ way of life, both culturally and socially. We should also think about environment protection: how do we let people come into their environment without destroying it?
“The key objective of sustainable tourism development is being responsible for ecosystems and communities. Because sustainability is not just about today or tomorrow. It’s about this generation, the next generation, and the ones to come.”
“[It] isn’t just about today or tomorrow. It’s about this generation, the next generation, and the ones to come.”
How are youth important drivers of SDGs?
Youth are the future. They can do and will have time to do so much for our country. Most of them are now in university, acquiring knowledge in different areas of study. They will apply what they have learned to practice, and they will be proud of themselves for it.
“What we learn now isn’t just for a day job we’ll have in 4-5 years’ time. It is also for making an impact in your community, coming up with solutions to existing problems, and influencing policy change, urging the government or relevant agencies to recognize and redress the problems.
What did you take away from the program ?
Throughout the week where we got to interact with the locals, we saw how they genuinely felt about their community. One lady we talked to said she wanted to see her community making coconut sugar again. This sparked something in her and got her thinking about what they could do to preserve local knowledge and heritage and pass them on to future generations.
“It was such a new experience for me. I never knew we had so many great products and stories behind them. I feel hopeful that some people are thinking about developing the community and bringing about positive change. They make me want to do my part in making that happen, too.”
Changing the world through social enterprise involved building a sustainable business! This workshop will dive into understanding business models, including using the Business Model Canvas (BMC) framework of building blocks to help you to visualise different elements of your social venture. This thinking is essential for social entrepreneurs as much as regular entrepreneurs. In the workshop we will use two separate social enterprise examples to illustrate how to apply BMC to social ventures, and you will leave with a good understanding of how this valuable tool can help you to strengthen your own venture and sustainably create the impact you are aiming for.
Moreover, This event also have Networking reception for the workshop participants and other invited guests. In this session Dr Belinda Bell will contextualise this rapidly growing sector and showcase different models that are making impact including some of the common pitfalls.
As the 21st century is transforming at incomparable speed, the 2030 Agenda for Sustainable Development envisioned us to imagine what the world will look like in 2030 which then forces us to rethink about what ‘development’ will actually mean – ’Decent Work’ from 10 years ago will definitely mean different thing in 10 years from now. The challenges we face are large, complex and continually evolving.
To not only shape the future world from the past, an innovative tools is required to help us ideate, reframe, share and realise our own future.
Foresight is one of the tools that enables all of us as well as government to think creatively to adapt and prepare for the unpredictable future as the tool has an ability to leverage emerging opportunities, minimising risk and present decision-makers with more and better choices for inclusive growth and social justice.
Check out this engaging and easy to read UNDP Global Centre for Public Service Excellence’s “Foresight Manual – Empowered Futures for the 2030 Agenda” to find out more about a crisp and concise overview of the use of foresight for SDGs implementation with a concrete suggestions on how to use it at different levels.
Here: https://goo.gl/MhQjvV
Download:
How do we build a future that’s centred on people and may be almost unimaginable today?
There are many innovation platforms all over the world. What makes Thailand Social Innovation Platform unique is that we have created a Thai platform fully dedicated to the SDGs, where social innovators in Thailand can access a unique eco system of entrepreneurs, corporations, start-ups, universities, foundations, non-profits, investors, etc. This platform thus seeks to strengthen the social innovation ecosystem in Thailand in order to better be able to achieve the SDGs. Even though a lot of great work within the field of social innovation in Thailand is already happening, the area lacks a central organizing entity that can successfully engage and unify the disparate social innovation initiatives taking place in the country.
This innovation platform guides you through innovative projects in Thailand, which address the SDGs. It furthermore presents how these projects are addressing the SDGs.
Aside from mapping cutting-edge innovation in Thailand, this platform aims to help businesses, entrepreneurs, governments, students, universities, investors and others to connect with new partners, projects and markets to foster more partnerships for the SDGs and a greener and fairer world by 2030.
The ultimate goal of the platform is to create a space for people and businesses in Thailand with an interest in social innovation to visit on a regular basis whether they are looking for inspiration, new partnerships, ideas for school projects, or something else.
We are constantly on the lookout for more outstanding social innovation projects in Thailand. Please help us out and submit your own or your favorite solutions here
Read more
What are The Sustainable Development Goals?
UNDP and TSIP’s Principles Of Innovation
What are The Sustainable Development Goals?
Contact
United Nations Development Programme
12th Floor, United Nations Building
Rajdamnern Nok Avenue, Bangkok 10200, Thailand
