Lise Kingo is no stranger to the C-Suite. In 12 years as an executive vice-president at Danish pharmaceutical giant Novo Nordisk, she handled several areas of the global business and developed the company’s first sustainability strategy. That, however, was seemingly not enough.
In 2015 Ms Kingo turned her attention to the UN Global Compact, the world’s largest corporate sustainability initiative, which aims to persuade CEOs to commit to 10 principles in the areas of human rights, labour, the environment and fighting corruption. The Global Compact, which now boasts more than 10,000 participating companies in some 160 countries worldwide, helps businesses effect positive change and work towards achieving the 17 UN Sustainable Development Goals (SDGs) by 2030.
Since the SDGs were adopted in 2015, which Ms Kingo notes was the first single common agenda agreed upon at the UN, there has been a “really major shift” in how businesses perceive corporate sustainability.
“I think corporate sustainability has become a key part of the strategic discussion agenda in a way it has never been before,” she says, pointing out that the Global Compact’s recent progress report found that 67% of the participating CEOs said they were ‘personally engaged’ in driving responsible business and the SDGs at the strategic level.
“At the UN Global Compact, we have really illustrated how responsible business is part of a strategic business innovation agenda that concentrates on turning risks into opportunities,” adds Ms Kingo.
Since the creation of the SDGs some progress has been made in areas such as extreme poverty, which affected 8.6% of the world’s population in 2018, down from 10% in 2015. However, Ms Kingo says: “The world is falling behind the goals, particularly on climate and social inequalities.”
The Global Compact’s progress report found that 71% of the CEOs believe companies could deliver significant impact on the global goals, but only 21% of the CEOs believe this is actually happening today. “There is clearly a lot of work to be done on scaling up companies’ impact on social and environmental issues,” says Ms Kingo. “The really important thing is to ensure that the C-suite and board agree that this is the strategic priority for the company for at least the next 10 to 20 years, to contribute in making the global goals a reality.”
Unctad estimates that the world needs to invest at least $2500bn annually to make the 17 SDGs a reality by 2030.
“Clearly FDI has a very important role to play in financing the global goals, especially in emerging markets,” says Ms Kingo. “It is a source of finance in some of the most difficult sustainable development issues and where the interplay of basic economic development needs and lack of basic social infrastructure has deterred other types of foreign capital investment.”
FDI’s key role
Between 2013 and 2017, FDI was the most significant external source of financing for developing economies, constituting 39%, according to Unctad. It was followed by portfolio investment and bank loans, which made up 18% and 9% of external financing, respectively.
“One of the reasons the Global Compact has launched a network of chief financial officers is that we want to involve them much more in how FDI and other investments can be made through the lens of the global SDGs,” says Ms Kingo.
Alongside progress towards the SDGs, Ms Kingo sees long-term focus and collaboration as the best ways to face off crises such as the coronavirus pandemic.
“It is impossible to address the crisis without good governance systems, dialogue and co-operation,” she says. “That is exactly what the 2015 goals are all about. I think these 17 goals provide excellent guidance for all of us as individuals, companies and governments.”
This article first appeared in the April-June edition of fDi Magazine. The full digital version of the magazine is available here.