Multi Stakeholder Partnership for Tackling Social Vulnerability

The 2030 Agenda is a call to action. In a time where multiple eras coexist; the pace of change is exponentially increasing; disruptive innovation and technological advances are fostering a more than ever interconnected world and the social, economic, and environmental issues are more and more visible. How to implement innovative ideas involving all sectors in society? How can the business sector participate in building solutions to the complex problems that humanity is facing? This is the main topic of this Side Event.

The presentation of the outstanding public policy Compromiso País from Chile, together with a new understanding of the role of the private sector will lead this High-Level panel through new ways of addressing inequalities aiming at leaving no one behind.

The Compromiso País Program

In Chile, the shared vision that economic growth alone does not necessarily solve complex social issues, led us to try new, innovative and holistic approaches to design solutions: that is why a disruptive programme called “Compromiso País” was created, with the motto of “leaving no one behind” as a firm commitment of the 2030 Agenda.

Following a bottom-up approach, the first steps consisted on identifying vulnerable groups1 and launching a “call to action” to the Chilean society. Task forces were created for each of the 16 identified vulnerable groups through a multistakeholder approach, confronting information gathered from different sources that had never been cross-analyzed before and conducting a public consultation with representatives from all over the public sector, civil society, parliament, regional governments and academia.

Among the wide range of problems that have been identified are: 500 thousand women victims of intrafamily violence and without personal incomes to survive; more than 35% of the population over 18 years who didn’t finish secondary school; 1.4 million out of 18 million inhabitants who lack basic sanitary installation and/or drinkable water; over 42 thousand families living in slums; and 72 thousand students that are not attending school.

This consultation led to the definition of 16 priorities to be solved by some of the most relevant leaders of all sectors of our society, including main representatives of large corporations and the business sector in general, all of whom committed publicly to design collaborative solutions for those critical social problems at a fast pace. This new understanding of the role of the private sector considers it key to incorporate the participation and talent of business leaders to create solutions that are efficient and sustainable.

Leaders across the private sector are increasingly seeing the business case for sustainable development and understanding the SDGs as “the cornerstone to secure economic and business growth […] offer[ing] the greatest economic opportunity of a lifetime”. The Business and Sustainable Development Commission (BSDC) has established that business opportunities in the implementation of the SDGs in four systems – food and agriculture; cities; energy and materials; and health and well-being – could be worth more than US$12 trillion annually for the private sector in 2030 (representing 10 percent of forecasted global output in that year). The investment required to achieve these opportunities is around US$4 trillion per year.

Finance solutions were also defined and structured, including pure public financing, philanthropy and other forms and types of private capital sources. Social Impact Bonds (SIBs) are among the most recent alternatives considered. Feasibility analysis for SIBs fare focusing on recidivism, homelessness and life skills development. The Chilean government is further exploring other areas where SIBs seem not only feasible but an appropriate financial mechanism to tackle complex social problems through a cost-efficient allocation of public resources, among other benefits widely known regarding SIBs. At least two SIBs are expected to begin implementation during 2019. The created space enables other solutions that emerge from Compromiso País: high-level impact investment opportunities and projects, such as affordable housing; access to water and sanitization; and digital connectivity, among others.

An approach that involves the whole society seems the best way to create social capital and cohesion by designing social public policies where private sector and civil society leaders share their efforts towards the most pressing social issues, taking the advantage of the strengths of each group.

This new understanding of the responsibilities of the private action has led to the appearance of new hybrid organizations and business models (often referred as “for-benefit companies” or “businesses with purpose”). These companies share a commitment to prioritize purpose over profits, a commitment that defines them. These for-benefit organizations can be found in many different movements (Social Entrepreneurship, Social and Solidarity Economy, Shared and Circular Economy, Human-Centered Business, Fair Trade, Banking with Values, and many others), and come in a wide variety of forms (Social Enterprises, Cooperatives, B Corporations, Companies of Collective Benefit and Interest, Social Businesses, Sustainable Companies, Civic Ventures, Triple Impact Businesses, and so on). For-benefit enterprises constitute an emerging fourth sector of the economy, growing at the intersection of the traditional public, private, and nonprofit sectors. Despite their diversity, these companies share the same ambition: to address basic unmet needs and solve the social and environmental problems of our time through a market-driven approach.

For-benefit enterprises currently lack their own supportive ecosystem, making it difficult to survive and deliver at their highest potential. Consequently, for-benefit organizations are forced to operate at a relative disadvantage to traditional for-profits and nonprofits unless they make compromises that dilute their mission or impede their ability to scale. To succeed at delivering on both their commercial and impact objectives, for-benefits need strong support systems just like the other sectors but tailored to their unique requirements. They need access to financial markets that seek positive social and environmental impacts, enabling policy and regulatory environments, integrated assessment and reporting standards and tools, specialized technical and legal assistance and training offerings, and more. In short, the mechanisms that make a market function.

The Fourth Sector Group (4SG) is a global multi-stakeholder platform for collective leadership and action aimed at accelerating the development of a supportive ecosystem for the fourth sector. Through a variety of collaborative initiatives, 4SG brings together businesses, civil society, governments, multilaterals, philanthropists, academia, ecosystem builders, and industry and sector leaders to create a conducive environment for for-benefit organizations to thrive.

Speakers:

} Achim Steiner, UNPD Administrator

} Alejandra Candia, Vice Minister, Social Development, Chile 

} Jacqueline Plass, Program Executive Director, Chile 

} Isidoro Santana, Minister of Economy, Planning and   Development, Dominican Republic 

} Rebeca Grynspan, Secretary-General, SEGIB 

} Heerad Sabeti, CEO of the Fourth Sector Group 

Moderator: Luis Felipe López Calva, Regional Director UNDP