The Kapuszinski Lecture on Development 2017 – Stockholm School of Economics (SSE) – November 15, 2017

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By Jan Eliasson, Former Deputy Secretary General United Nations

I am truly honoured to deliver the 2017 Kapuscinski Lecture. It is a signature yearly event, which brings the EU member states and citizens together around the common challenge of development in the 21st century.

My approach today to the subject of global development is very much influenced by my work at the UN over the past three decades. This work spans over peace and security, conflict resolution, humanitarian action as well as human rights and institution building.

In my analysis of our development challenges, I am also strongly influenced by the work on and adoption of the Sustainable Development Goals (SDGs) and the 2030 Agenda in September 2015 at the UN.

Other elements of significance for my understanding of development are the negotiations and agreement on Climate Change and the emergence of the concept of Sustaining Peace.

Let me from the outset propose that the overall vision and goal should be the universal acceptance of the need for both sustainable development, sustainable peace and sustainable human rights.

My main message today is that economic and social development must be seen, and carried out, in the broader perspective of peace and security, human rights and strong and effective institutions.

In the final document of the UN General Assembly Summit in September 2005, which Sweden had the honor to chair; this relationship is summarized in the following over-arching formula:

There is no peace without development, there is no development without peace and there is neither peace nor development without respect of human rights.

Another crucial conclusion is that development requires mobilization, not only across the areas peace and human rights, but also across a broad range of actors: governments, international organizations, and also parliaments, the private sector, civil society, and the academic and scientific community.

To this list must in today’s world be added the role of media, not least social media – and, ultimately, the role of all of us. Nobody can do everything, but everybody can do something.

No one escapes responsibility for improving human conditions in a world where international cooperation and solidarity now are challenged, even threatened, in the political life of our nations. This threat is evident in the debate in key areas like trade, migration and climate.

This observation of mine is also related to the fact that international and national agendas are growingly interrelated. The dividing line is no longer evident between what we do at home and what is being done in the world.

My conviction is that a good international agreement or formula is, in fact, in the national interest of individual countries. The Paris climate agreement of 2015 can well illustrate this thesis. The future of our nations cannot be separated from the future of the Planet.

In reverse, what we do to build good societies at home – with peaceful conditions, fair distribution of resources and wealth, inclusive and non-corrupt institutions and respect for human rights – is a contribution to a better life to our citizens, but also to international peace and security.

Far too often, I have seen that the absence of these positive factors leads to tensions, to civil strife and even to international interventions, in weak and fragile states.

With this in mind, we should appreciate what the Nordic countries have achieved in terms of well-functioning societies and institutions. This has contributed to a greater degree of trust here than in most other countries.  Admittedly and sadly, we live in a world with much of unfulfilled expectations and a disturbingly high ”trust deficit”.

To me, the new SDGs and the 2030 Agenda represent a remarkably lucid and comprehensive road map for a better life for the peoples of the world and for a livable planet.

It is an ambitious agenda. The UN Member States aimed high, fully aware that setting these daring goals meant leaving the lowest common denominator negotiations behind.

During the talks, I was as Deputy Secretary-General making the point that this agenda could not turn into realities with measures and steps taken only by governments and international organizations. For success, the SDG Agenda required utilizing the huge potential of the business community, civil society and the world of science and technology.

This ”horizontal” mobilization is now one of our greatest tasks. If we succeed in bringing all these actors on board the journey to a life in dignity for all, we will make a giant step forward to a more rational, more effective method of solving problems of human development. The ”silo approach” must be left behind!

This also requires us to combine local, national and regional efforts with international cooperation. Such crosscutting cooperation builds on the premise that we discard the zero-sum game thinking – one part wins and the other one loses. In today’s world we must aim for win-win formulas, based on sound give-and-take and on the realization that the word ”together” is our most important word. If we do not adopt the win-win method, we will be left with highly damaging and dangerous lose-lose propositions. America First – or for that sake Sweden First – simply does not work. It could lead to America – or Sweden – Alone.

Let me now highlight the most prominent of the features of the 2030 agenda.

The basic common feature is, of course, sustainability. None of our pursuits can have lasting effects if we do not base them on sustainability. We may have a Plan B in other areas of politics and life, but when it comes to the existential issue of climate change and environmental degradation, we have no Planet B.

Accepting this, lead us to adopt long-term thinking – away from quarterly results and mandate periods. Another consequence is the urgent need to accept and share responsibility for future generations. This fundamental realization must penetrate all sectors of society, and all of us as human beings.

A second key feature of the SDGs is universality. In contrast to the Millennium Development Goals (MDGs), the SDGs are to be universally implemented – by the countries of the North as well as of the South. This is meant to send a strong message of inter-dependence – we are all in the same boat. Development is an obligation for all, rich as well as poor. By this, Agenda 2030 represents a conceptual break-through. Development is a global responsibility.

A third feature of the SDGs is their mutually re-inforcing character. The 17 goals are closely related. If we, for instance, improve the global water and sanitation situation, we will see progress in child mortality, maternal health and education. The same goes for each and every one of the goals. This means that we must promote a crosscutting, horizontal approach to meeting challenges and solving development problems.

A fourth feature is the relationship of the new goals to the fundamental formula of peace, development and human rights. Goal 16 underlines the importance of peaceful societies, access to justice and strong institutions.

This is another conceptual achievement of Agenda 2030 – the realization, as stated, that efforts for peace and security, development and human rights cannot be divorced or seen in isolation. Rather, they can achieve lasting results only if they are carried out in parallel.

For experts and practitioners in the security, development and human rights communities this is a golden opportunity to mobilize common efforts and reach joint results. Some steps forward have already been taken. In April 2016, the UN Security Council and General Assembly adopted identical resolutions on Sustaining Peace.

This concept is based on seeing peace building as a common responsibility of different sectors across national and international fields. It also underlines the importance of prevention as well as post-conflict peace building as an extended arm of prevention.

Lastly, let me highlight the importance of institutions for development. I have to admit that this issue was one of the most difficult to negotiate. Some countries felt that it was related primarily to domestic affairs and responsibilities.

However, it is hard to dispute that poor governance, corruption and lack of trust in institutions are seriously detrimental to development. Strong, honest and well-functioning institutions are not only beneficial for our citizens. They are also a positive factor in terms of support, cooperation and investments from the outside world.

Today, it is crucial that more of trust be built in leaders, institutions and democratic processes. Not least in view of the communication revolution and the emergence of powerful social media, there is an urgent need to counter extremist forces, which politically exploit the lack of trust. These movements must be taken seriously.

Let me conclude by high-lighting one area, which affects development, security as well as human rights , and which, I suggest, is of historic significance: the issue of refugees and migration.

In the SDGs, migration is listed under goal 11. But it goes beyond this particular goal. Migration and refugee movements have broad and deep economic, social, cultural and political implications. The narrative on migrants and refugees is controversial and often contradictory. Some see perils and problems – others see possibilities and potentials.

The economic consequences of 244 million migrants and 65 million refugees are significant. They contribute to growth in all countries where they live. Studies by IMF and the OECD verify this. They also make possible demographic growth, which is crucial not least for Europe’s and North America’s future. Further, their remittances to families in their home countries are three times higher in value than the total Official Development Assistance (ODA) in the world.

These facts and figures ought to be introduced and stressed in the sometimes toxic debate on refugees and migrants, and this apart from the fundamental question we should all face: are we in the future to build our societies on diversity or exclusion.

This, of course, presents a tremendous challenge to our nations and our peoples. Are we to develop and live up to integration policies, which include, and seriously deal with, education, housing and employment for all?

This is not an easy task for any society, whether it is on the national or local level. But I claim that the long-term gains and benefits of effective integration are much larger than the short term obstacles.

Migration and how we deal with refugees will be a decisive factor for the  journey ahead of us. We will in this century see millions of people leaving not only conflicts but also extreme poverty and climate change disruptions.

Facing this historic challenge requires action plans spanning over development, security and human rights which must be embraced by both national and international actors. Solving the problems inside nations will in this world be as important as international agreements and strategies.

In this pursuit, on both levels, the 2030 Agenda is a formidable instrument as well as an indispensable road-map for the future.

I hope that each and everyone of you in your present and future endeavors will make use of this new instrument in the toolbox of progress for humanity. By doing so, we can contribute to a life in dignity for all on this vulnerable planet Earth. We must do all we can to reduce the gap between the world as it is and the world as it should be.

By Jan Eliasson, Former Deputy Secretary General United Nations

Board Oversight of Corporate Sustainability – From Awareness to Engagement

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By Andreas Rasche

Corporate sustainability and responsibility have come a long way. One aspect that has been sidelined quite a bit is how corporate sustainability is linked to the work of Boards of Directors. My plea here is a simple one: We need to anchor corporate sustainability at the Board level, and we need to do it in a way that Boards move from an awareness that sustainability related work exist (which is usually given) to a deeper engagement with sustainability-related questions.

Through my work and research I often talk to corporate leaders about sustainability. Often, I ask them: “Does your Board discuss sustainability-related matters?” Few leaders reply with a straight “no”; they emphasize that their Board is aware of sustainability issues.  However, equally few leaders claim that their Board really shows high levels of engagement vis-à-vis corporate sustainability. Most emphasize that the Board approves/discusses the annual sustainability report, and also that the Head of Sustainability gives an annual update to the Board. Yet, approving a report once a year and getting an annual update on relevant activities is different from engagement. Awareness is not the same as engagement, and confusing the two can give Directors the misleading impression that their Board really addresses corporate sustainability.

Boards that are just aware of the company’s sustainability-related work miss an important point: decades of research have shown that sustainability is about identifying risks and opportunities for the company. Hence, we cannot (and should not) disconnect relevant discussions from the “regular work” of any Board.  By “regular work” I mean the classic role of the Board, which is to approve and monitor corporate strategy against risks and opportunities. Nearly every aspect of corporate strategy has a sustainability angle to it. The challenge is to identify this angle and to make the most out of it.

How, then, can we ensure that Boards really engage in sustainability-related discussions? Research in this area is still rather scarce, and it would be misleading to claim that we have a lot of insights into this topic. I want to suggest three broad areas that seem important when thinking about how to move Boards from awareness to engagement.

  1. Structure: One important area is to think about how to structure Board oversight of corporate sustainability. There are different options but not one best way. Some Boards may find it useful when the entire Board discusses sustainability-related issues. This keeps relevant content high on the agenda and also makes sure that there is broad involvement in the debate. Other Boards may find it more useful to create a separate committee for sustainability-related discussions or they may enrich the work of an existing committee. This option may be risky in the sense that it unnecessarily isolates relevant debates. On the other hand, a committee can signal importance and ensures that the topic is regularly addressed. Both options do not exist in isolation; they can, of course, be combined.
  1. Culture: Each Board has a culture, and even without generalizing too much it is fair to say that most Directors still understand their main job as controlling and monitoring what is happening in and around the company. I share the view expressed by David Grayson and Andrew Kakabadse that in the longer run the structure that a Board adopts may be less important. What matters most is the mindset that a Board develops vis-à-vis corporate sustainability. Does the Board see sustainability just as an add-on, or does it see relevant issues as an integral discussion of risk mitigation and opportunity maximization? Does the Board identify its own role primarily as being about monitoring, or does it also understand itself as a mentor willing to guide sustainability-related discussions? And in what ways does the Board signal to the organization that sustainability is central to any strategic decision? The self-understanding of the Board matters, and this self-understanding cannot be changed overnight. It develops over time, like any culture does. A Board’s culture is influenced by a number of aspects; such as who participates (often people with explicit sustainability knowledge are lacking) and also by whether the Board is open to learn about the relevance of sustainability.
  1. Strategy: While Boards can have a great structure to address sustainability and also the right mindset that underpins such a structure, true engagement around corporate sustainability may mostly be visible in the pattern of actions that a Board adopts. Henry Mintzberg once called such a pattern “a strategy”. Whether or not corporate sustainability is part of a Board’s DNA becomes visible in actions such as the hiring of C-level executives and the compensation packages offered to these executives. A Board that neglects sustainability-related criteria when deciding on compensation packages disregards an important opportunity to fully engage in the discussion and to adjust its own strategy. While in the past many argued that the lack of robust indicators makes it impossible to tie compensation towards sustainability goals, this argumentation does not hold anymore in times where we have long lists of indicators, measures, and materiality maps.

I am not claiming that this is a conclusive list, but it is certainly a platform to start thinking about how to better engage Boards in discussions around corporate sustainability. First initiatives are emerging around this topic. The UN Global Compact launched a Board Programme a while back, and Stockholm School of Economics is discussing the creation of a similar engagement program for Swedish companies. After all, being aware may just not be enough…

Andreas Rasche (@RascheAndreas) is Professor of Business in Society at Copenhagen Business School and Visiting Professor at Stockholm School of Economics. More information at: www.arasche.com