By Dr. Kristjan Jespersen, Dr. Izabela Delabre, Dr. Caleb Gallemore, and Dr. Katryn Pasaribu
◦ 3 min read◦
Tropical deforestation continues at alarming rates, with 12 million hectares of tropical tree cover loss recorded in 2018. Much of this deforestation is linked to large-scale agricultural development. Palm oil companies are seen as key deforestation culprits due to high-profile media campaigns being led by NGOs and, in response, recent years have seen the proliferation of private sector pledges and initiatives to address deforestation in the palm oil value chain. There has also been growing international focus on forest conservation in the context of climate mitigation, with countries at 2021’s United Nations Climate Change Conference (COP26) pledging to halt deforestation by 2030. Multi-billion dollar initiatives, such as the Bezos Earth Fund are investing in nature-based solutions to address climate change, including through the protection and reforestation of forests and other ecosystems.
Given these ambitions, an important question for corporate sustainability and conservation research and practice is how to link financing mechanisms for conservation and value chains, two policy streams that are generally disconnected. Actual methodologies for understanding appropriate, long-term financing for forest conservation remain elusive, and this knowledge gap hinders the clear assignment of responsibility, accountability and sustainability of conservation efforts.
Introducing No Trees, No Future – new research project
An ambitious new research project “No Trees, No Future – Unlocking the full potential of conservation finance”, funded by the David and Lucile Packard Foundation, seeks to design and test a rigorous methodology for understanding the responsibility for conservation finance of influential firms in the palm oil value chain. It addresses important knowledge gaps that currently impede effective conservation finance, examining questions such as: Which firms are responsible for financing conservation? What are the motivations of firms to engage in different types of conservation finance initiatives? To what extent are companies willing to internalize conservation costs? What might cost-sharing models look like?
This novel, interdisciplinary research project uses a mixed-methods design that combines in-depth case studies, surveys and remote sensing to explore how the costs of conservation may be shared effectively and equitably between palm oil value chain actors, and provides a resource for external stakeholders seeking to identify firms’ contributions to land cover change, in Indonesia to start with.
The research will involve the development of data-intensive methods to assess the spatial footprint of the supply chains of a set of lead firms in the oil palm value chain, as well as in-depth interviewing of stakeholders across the palm oil value chain to identify the feasibility and possible impacts of adopting new methods for conservation finance.
Our goals are: (1) to develop a methodology that can be readily applied to estimate lead firms’ responsibility for contributing to conservation finance in the palm oil sector, and (2) that business models and strategies integrate conservation finance effectively, supporting more equitable cost sharing.
The research will identify several possible models for assessing spatial footprints of firms’ supply chains in the oil palm sector, testing their feasibility with a selected group of investors and conservation project proponents. Following this initial project, which focuses on the palm oil value chain, we intend to explore possibilities in other commodity sectors, and how to scale up efforts to support effective and equitable conservation finance.
To what extent will companies be willing to absorb the costs of conservation finance into their supply chain transactions? How might potential barriers be overcome? It is our intention that the project contributes to companies taking on greater responsibility for conservation finance, embedding long-term conservation costs into the palm oil value chain (that are currently externalized), disrupting ‘business as usual’ to support forest conservation, given their critical role in climate mitigation and biodiversity conservation.
We will share our interim findings on this blog as the project progresses. We would be delighted to hear from researchers from different disciplines and practitioners working in this field. If you have any questions or comments, please get in touch!
About the Authors
The two-year project is led by Dr. Kristjan Jespersen, Associate Professor at the Copenhagen Business School (CBS). The research team includes Dr. Izabela Delabre, Lecturer in Environmental Geography at Birkbeck, University of London; Dr. Caleb Gallemore, Assistant Professor in the International Affairs Program at LaFayette College, Pennsylvania; and Dr. Katryn Pasaribu, seconded from Universitas Prasetiya Mulya to CBS.
COP26, the 26th UN Climate Change Conference, has just ended. It was supposed to be ‘the next big and significant one’: the great follow-up to COP21 five years ago, the outcome of which was the Paris Climate Agreement, the first binding international treaty on climate change. The global urgency regarding climate issues has certainly never been greater.
Although COP26 has yielded some results and some progress has been made, it has been a disappointment to many, including the iconic and omnipresent Greta Thunberg, who was filmed chanting “you can shove your climate crisis up your a…” along with other demonstrators at a rally in Glasgow – and who summarized the accomplishments of COP26 in three words:
Blah blah blah.
Looking at the Glasgow Climate Pact and its immediate reception, we are certainly, once again, witnessing a political willingness to attribute considerable significance to (non-binding) declarations of intent regarding (possible) future actions and to the mere mentioning of the 1,5°C temperature increase target and efforts to phase-down (not phase-out) the use of coal power and fossil fuel subsidies.
In the absence of truly transformational commitments and progress, the espoused political belief in the power of words to move action can seem quite magical at times, indeed reflective of magical thinking. Certainly, there was nothing magical about the moderate public and civil society expectations of progress preceding COP26. We have to look elsewhere for the magic. We have to lookinside the established political system, where magical thinking is at play in definitions of climate problems and solutions, and where it, in itself, constitutes a problem worth addressing.
However, in the area of climate change and sustainability it is the grownups, in particular politicians, that tend to have a proclivity for magic – with the younger generation seeking to expose the deficiency and unrealness of subsequent courses of action.
In relation to sustainability, magical thinking is a matter of believing that certain outcomes – decoupling of economic growth and GHG emissions, a zero carbon economy – can be achieved by means that, although they may have some bearing on circumstances, are insufficient and ultimately unfit for purpose (according to the best available scientific knowledge).
Ends and Means: Strong and Weak Sustainability
One way to frame this problem, at the most general level, is to distinguish between strong and weak sustainability, as illustrated in the table below.
– source: developed from Sjåfjell (2018)
While strong sustainability calls for radical and systemic change guided by a biocentric preoccupation with planetary boundaries, non-negotiable ecological limits and safe operating spaces, weak sustainability signifies a more pragmatic and incremental approach to change, maintaining an anthropocentric focus on development as (economic) growth, human needs and intergenerational equity. An important point being that urgent calls for action tend to draw on the repertoire of arguments provided by strong sustainability, whereas most solutions ultimately fall under the heading of weak sustainability. They are not radical, only incremental, and certainly pragmatic.
The question is whether it is indeed an act of magical thinking to believe that we can accomplish strong sustainability ends by weak sustainability means. In other words, that we can reach the climate targets we need to reach, according to science, by way of incremental, small steps change – holding onto the growth paradigm, the business case and win-win.
The Magic of Win-Win
Andrew A. King and Kenneth P. Pucker, in a recent piece in Stanford Social Innovation Review, speak of “the costs of magical thinking” in relation to the prevalence of the win-win (or triple-win) mindset and associated terms such as CSV (creating shared value). They talk about “strategies [that] rely on improbable mechanisms, promise implausible outcomes, and boast effectiveness that outstrips available evidence.” Strategies that “inflict harm because they distract the business world and society from making the difficult choices needed to address pressing social and environmental issues”.
This begs the question: What is located on the other side of win-win? How can we escape its magical allure and the often exaggerated claims made in its name? Unfortunately, King & Pucker do not have much to say about this. They speak only of how: “It is time to turn away from alluring unproven strategies and refocus our efforts on those interventions that have proven effective – such as government regulation”.
It is not a terribly convincing argument. Government regulation in the age of man-made climate change is not so much an escape from win-win as it is an embodiment of win-win – and arguably needs to be. Sustainable development is not only about climate change and climate solutions – the social and economic pillar of sustainability need to be considered alongside the environmental pillar at all times. That is, questions of social justice and of what is economically feasible also need to be addressed.
The European Green Deal as a Win-Win Scenario
The European Green Deal is, for better or worse, an illustrative example of this. The President of the European Commission, Ursula von der Leyen, has referred to the green transition as ‘Europe’s Man on the Moon Moment’. Nevertheless, the framing of the European Green Deal reads like a textbook case of win-win, and not a very advanced one at that. As you can read on the Green Deal webpage: “Making Europe climate-neutral and protecting our natural habitat will be good for people, planet and economy. No one will be left behind.” The Green Deal is Europe’s new growth strategy, it will help cut emissions while creating new jobs and, again, it will leave no one behind.
Speaking of private businesses, the arguments for going beyond win-win are quite straightforward. There are ethical issues and matters of responsibility that need to be addressed regardless of whether the company can derive any commercial benefit from it. However, in the political realm of multiple and competing interests and policy concerns it is more difficult to escape the clutches of win-win.
Imagine if von der Leyen would have said: “We need to make sacrifices in order for the green transition to happen. We need to slow down growth, it will cost jobs and we cannot guarantee that some people will not be worse off as a result’. It is a virtually unthinkable scenario. Not least because we know that it is the poorest and most vulnerable population groups that are bound to be worse off.
The Magic of Danish Government Policy
That is to say, government as we know it does not represent a solution to the problem of widespread magical thinking about climate change and sustainability. It is very much part of the problem and there is no apparent escape. Not even for the most advanced nations in Europe. Let us take Denmark as an example. Denmark was just ranked 4th in the 2022 Climate Change Performance Index (CCPI). As the three top spots were left empty to signal that not a single country currently deserves a ‘Very high’ rating, Denmark is supposedly the leading country in the world measured on criteria regarding climate policy, renewable energy, energy use and GHG emissions.
This is not to say, however, that Danish climate policy is bereft of magic. Quite the contrary. Dan Jørgensen, the Danish Minister for Climate, Energy and Utilities, has become famous for waving his own kind of somewhat oversized magic wand: ‘the hockey stick’. The hockey stick was originally used (by American climatologist and geophysicist Michael E. Mann) to illustrate temperature changes over time and the transition from the Holocene era (the long shaft) to the Anthropocene era (the short blade). There is nothing magical about this science-based graph.
However, the image of the hockey stick has in recent years been appropriated by management consultants and policy makers who are using it to serve instrumental and sometimes magical purposes. In the instrumentalized imagery, the bend between shaft and blade represents the (magical) moment of innovative/technological discovery, an inflection point allowing, ideally, for a transition from a period of inferior – ineffective, unsustainable – solutions (the shaft) to a period of superior solutions (the blade).
Dan Jørgensen has been widely criticized for his espoused belief in a long shaft (gestation) period, that tends to become longer and longer and is so far marked by a lack of truly groundbreaking results and postponement of difficult decisions (particulary regarding implementation of a CO2 tax). On the one hand, the inflection point is continually moved further and further away. On the other, it is assumed that the magical moment of discovery and transformative change will happen in time for Denmark to be able to deliver on the Paris Climate Agreement and the even more ambitious Danish climate law.
A concrete example of magic at work in Danish climate policy is the below image from the recent government action plan on green transition. Notice in particular the small miracle that is supposed to happen from 2029-2030, where all the technical reduction potentials on display somehow reach their target of zero. It seems magical. It is certainly not well explained in the action plan how this can come about – or why the reader should find this sort of technical forecast even remotely believable.
The Great Balancing Act: Magic and Reality
There is an upside and a downside to magical thinking and political talk and action that can be said to reflect magical thinking. Today’s magical ideas may turn out to be next year’s (or the next decade’s etc.) realistic solutions or courses of action. Magical thinking blends into notions of aspirational talk and aspirational policymaking, suggesting that lofty goals can help inspire, motivate and accelerate change processes.
However, the downside is if magical belief in win-win solutions becomes a sort of self-imposed constraint or censorship standing in the way of open and honest discussions about the changes and sacrifices needed to make the green transition happen.
This can exacerbate accusations of greenwashing and create more public cynicism regarding climate policy and the willingness and ability of the political system to act proportionately. Magical ambitions needs to connect with harsh realities.
Steen Vallentin is Academic Director of the CBS Sustainability Centre and Associate Professor in the Department of Management, Society and Communication at Copenhagen Business School. His research is centered on CSR as a social and political phenomenon in the broadest sense, increasingly with a focus on corporate sustainability, circular economy and business model transformation – along with the politics and aspirational aspects of sustainable development more broadly.
The Sustainable Development Goals (SDGs) are the common goals of global development as we all agreed. Since its endorsement in 2015, it has become the norm. Multilateral corporations, aid agencies, development finance institutions and international organizations all refer to one or two Sustainable Development Goals (as their priorities) to legitimize environmental and social impact of their business activities. (I must confess here that I was also one of them). However, what are the actual changes in practices? Does it merely work as one other additional reference to our work? Otherwise, does it provoke transformational changes in our business strategies and practices for sustainability? Ironically, the Sustainable Development Goals are at once too sophisticated and too vague to do so.
The complexity of the goal structure should not be an excuse.
The development process of SDGs has been grounded based on lessons learnt from the Millennium Development Goals. Because the MDGs excessively focus on the social aspect of development, the SDGs embrace economic, social, and environmental aspects. This led the number of goals to increase from 8 to 17. In relation to the goals, 169 target goals and 231 indicators have been developed to track the progress of 17 goals (In comparison, the MDGs only have 21 target goals and 60 indicators). These vast numbers intend to strengthen progress monitoring and enhance result management; however, such complexity seems problematic to fulfil the initial purpose. Some indicator selection processes are still under the technical review process after five years of SDGs have once passed and almost half of the indicators (106 out of 231) contain technical difficulties producing data on a regular basis to track the progress. I know that measuring the fulfillment of the whole massive SDGs is complex and may not be an easy task. However, when it comes to wrestling with such a giant, the sophisticated skill set (here, seeking clear target goals and indicators) would be a winning strategy rather than hurdles. Thus, how should we deal with the giant?
We have to consider which specific target goals and indicators are aligned with my actions if you have a will to achieve the SDGs. Simply stating one of the goals does not track your achievement. Each goal cannot be even drawn in parallel rather they are all interlinked.
Universality matters, but not everyone is in the same boat.
We know why the SDGs have a principle of “No one left behind” across all the goals. This principle is again a result of lessons from the MDGs, which were criticized for the fact that they did not consider inequality and vulnerable groups in a development process. So that, this core principle is embedded into seventeen goals with the terms “inclusive”, “for everyone”, “for all” regardless of the developmental stage of their nations. Then, how can we make sure this would go far beyond the rhetoric?
We need extreme caution here. Do we have enough knowledge on those who are left behind? To move forward beyond the rhetoric, we need to unpack the word ‘everyone’. Even though ‘universality’ is an essential principle, we have to find out ‘who is left behind’ in every different context to make them not left behind, rather than concealing those excluded people under the name of “for everyone”.
Let’s see microfinance. It was expected as a universal means to reduce poverty and inequality since it provides a way of financial inclusion to those previously excluded to access credit. However, many research findings demonstrate that a particular type of “financial inclusion” which is embedded into microfinance cannot solve the marginalized groups’ economic challenges by itself. Without complementary social support, it was not enough to empower the poor, and even sometimes it resulted in an exacerbating situation for the people. I think this tells us the importance of deeper understanding of the poor, thus the need for a carefully targeted approach for impact.
In brief, working for “everyone” requires additional attention and effort. Whose reality should count first? How could we guide us to hold clear accountability to turn the “No one behind” catchphrase into concrete actions? I believe one of the roles of research on the SGDs should be founded here.
SDGs as a norm: it should be embedded into everyone’s everyday life.
Unlike the age of the MDGs, the SDGs involve a variety of actors such as private sectors and civil societies, who were not officially a part of the MDG process. Various stakeholders can create synergy through cooperation, but the responsibility to fulfil the SDGs become vague. According to Jurkovich (2019), three essential elements are needed to become a norm: “a moral sense of “oughtness”; a defined actor “of a given identity”; a specific behaviour or action expected of that given actor”. The SDGs as a global norm neither identify relevant actors for each specific goal and indicator nor have a compliance mechanism.
Sadly, the SDGs do not assign the responsibilities to anybody and the technical difficulty to monitor them also implies oughtness can be weakened. Frankly speaking, we officially have no obligation to contribute to the SDGs.
Despite its non-obligatory identity, I strongly believe that most of us have a willingness to dedicate to the SDGs. Although we all understand its complexity of monitoring, ambiguity of target people and non-compliance mechanisms. I urge you as an individual, a scholar or a member of the whole global development community to carefully consider what goals/target goals/indicators and for whom I can contribute with a strong responsibility. Otherwise, the SDGs risk losing its political power and may be on track to decay its status as the norm before its completion in 2030.
About the Author
Suhyon Oh is a PhD fellow at the Department of Management, Society and Communication, Copenhagen Business School, and has over ten years of professional experience working with the donor agency, international organizations, development consultancy, NGOs as well as private sectors. As an international development expert, she has worked with the projects on development finance, financial inclusion and global value chain development, etc. Her current research interest is development finance institutions, impact investing funds in developing countries, hybrid organization strategy and strategy as practice.
The garment and textile industries account for around 10% of global CO2 emissions, and their fast fashion approach consumes huge amounts of water in production and processing stages. While the fast fashion model incentivizes the overproduction/consumption of clothes, more sustainable solutions lie in the configuration of value chains towards slow fashion (durable products produced on demand) and the introduction of circular business models. Such a transformation will have consequences for the environment, workers’ conditions, and economic development.
This is particularly the case in the light of COVID-19, which led to a temporary disruption in the global garment and textiles value chains as stores closed in Europe and the United States in the spring of 2020. The cancellation and non-payment of garment orders particularly affected suppliers and workers in Bangladesh, leaving hundreds of thousands of workers without jobs and possibly facing destitution.
This is the focus of a new research and capacity-building project on ‘Climate Change and Global Value Chains’ coordinated by the CBS that has recently been funded by the Danish Development Research Council. In this research project, we will be working with colleagues from the University of Aalborg and Roskilde University in Denmark as well as BRAC University and the University of Dhaka in Bangladesh. Private sector partners include the Danish Ethical Trading Initiative and Danish Fashion and Textile.
I think that a key challenge in this new project is how we approach ‘climate change’ in the context of global value chains.
In the Danish debate on climate change, it is almost universally accepted that climate change should be at the top of the political and corporate sustainability agendas. However, both employers and workers in the Bangladeshi garment and textile industries may not perceive climate change mitigation as an immediate priority.
First, the purchasing practices of major brands sourcing garments from Bangladesh tend to result in downward price pressures, seasonal fluctuations in demand, and shorter lead times while, at the same time, these brands are also imposing ever greater environmental and labor standard requirements on their suppliers (not only in Bangladesh but elsewhere in the global South). Economic value is very unevenly distributed along the textile/garment value chain, with major brands reaping up to ten times higher economic value than suppliers – and even less reaching workers.
Hence, Bangladeshi suppliers often perceive the environmental and labor requirements of brands as adding to their costs without bringing additional business benefits.
In this context, suppliers may have very few, if any, incentives to address climate concerns in their value chains, while workers in the industry are trying to survive in a context of economic uncertainty.
In my view, a critical aspect of this new project is therefore that we will not only look at climate change from a Northern-centered perspective; that is, we are not only concerned with how brands and factories engage in the process of decarbonization. We will also zoom in on the importance of climate change adaptation, which I would label a more Southern-centered perspective on climate change in global value chains.
In fact, Bangladesh is one of the countries most affected by global climate change whose coastal areas and ports are prone to flooding, resulting in disruptions of the garment/textile value chain and economic losses for local manufacturers and workers.
Moreover, garment factories in greater Dhaka have extremely high lead and CO2 emissions, while many factory workers live in parts of the city that have unhygienic water supplies and must cope with living conditions that affect their health. Hence, integrating climate change and global value chain analysis from a Southern-centered perspective, I would argue, involves looking at the ‘business case’ for climate change adaptation – in other words, we must understand how can climate change adaptation can help in securing the future viability, competitiveness, and jobs in the garment industry and textile industries of Bangladesh.
About the Author
Peter Lund-Thomsen is Professor at the Department of Management, Society and Communication at Copenhagen Business School. His research focuses on sustainable value chains, industrial clusters, and corporate social responsibility with a regional focus on South Asia.
Demographic megatrends, such as ageing populations, challenges public health budgets in developed countries. Currently, health costs in OECD countries are growing at roughly double the rate as the average growth in GPD. ‘Pay for Success’ is an emergent, and highly innovative, partnership model promising both increased cost-effectiveness and patient-centric services in healthcare. Whether or not the model will constitute a critical feature of future health systems, only time will tell.
Due to critical leaps in modern healthcare and medicine, the average life expectancy in developed countries has doubled since 1900 [1]. While this is an important success, it also challenges public health systems because chronic diseases occur much more often at old age. In fact, a Danish report states that the average health costs for an 86-year-old are 16 times higher than for a 20-year-old [2].
In addition, public health sectors are experiencing structural challenges inhibiting their capacity to deliver services effectively.
The lack of systematic assessments towards quality and outcomes of services creates disproportionality on financial priorities. Evidence indicates that up to 30% of healthcare expenses are wasted on unproven or unnecessary treatments.
World Economic Forum 2017
An example of this is the general de-prioritization of preventive health interventions over short-term illness treatment.
Introducing ‘Pay for Success’
‘Pay for Success’ (PFS) has emerged as an organizational solution to the problems of asymmetry and ineffectiveness in public health. A PFS-program is fundamentally a public commissioning model based on two distinctive features 1) an outcome-based contract and 2) the engagement of an external ‘investor’.
In an outcome-based contract service delivery is outsourced to a provider and the public commissioner pays for the realization of long-term health outcomes. Hence, the public “pays for success”. Because services, such as preventive interventions, could take several years to deliver the PFS-model involves an ‘investor’ that provides working capital for the provider – and thus, takes the majority of the financial risk. This could either be a non-profit organization, a for-profit organization, or both. The first PFS-program was developed in 2010 and since then 200 programs have been initiated mobilizing a total capital of 420 Million Dollar [3]. Especially in the UK, the PFS-market has grown and is predicted to soon reach a total value of 1 Billion Euro (Carter 2019).
A simplification of the PFS-model inspired by Third Sector (2016)
Challenges and future directions of ‘Pay for Success’
While empirical studies from the UK and US does indicate that the PFS-model performs better than other commissioning models [4], they also highlight a more complex organizational structure that takes time and resources to develop – which, consequently, creates high transaction costs ultimately challenging the model’s cost-effectiveness. Technical problems related to valuating health outcomes, and creating a payment structure around such, has proven difficult and time-consuming. Additionally, the complex governance structure of PFS-programs in the UK and US has been criticized for being too rigid and focused on short-term performance – thus, inhibiting innovation.
The emergence of PFS-programs in Scandinavian countries poses an interesting field as emerging research indicates that these programs are fundamentally different from traditional PFS-models. The tendency to utilize more networked practices as well as the existence of comprehensive public data systems in Scandinavian welfare states could potentially solve some of the most critical challenges currently faced in PFS-development. What would seem critical for future PFS-development is to leverage these emerging insights and shine more light into the ‘black box’ of PFS-development.
Mikkel Munksgaard Andersen is Ph.D. Fellow at CBS, MSC. Through his Ph.D.-project, Mikkel studies the development and implementation of social impact bonds and payment-by-results methods in Denmark. His work centralizes around the distinct characteristics of Scandinavian impact bonds and their role in supporting and financing public services. The research takes a point of departure in the Danish research- and innovation project PreCare which seeks to develop new services and organizational models for preventive and digitalized healthcare. See more here.
As a number of the CBS Sustainability blogs have mentioned since March 2020, the official reactions to Covid-19 have (so far) not been doing much for sustainable development (apart from lower CO2 emissions from air travel). Despite concerned voices criticizing the limited attention to combating climate change (‘environmental sustainability’) in the longer run, little impact on policy makers has been registered.
If we focus on ‘social sustainability’ the picture is similar. Discussing the social side of sustainability is part and parcel of assessing the situation in the informal sector and among the estimated two billion people reliant on their livelihoods through the informal activities across the Globe. Sadly, the situation has shown that this group of people and their families have suffered from the imposed restrictions due to Covid-19 (see here).
While the negative impact on income and livelihoods probably is the most severe consequence of inability, lack of willingness (and in some cases maybe even sheer ignorance) among authorities, the events since March can also be viewed ‘an opportunity missed’ regarding (more) sustainable practices.
The classical example is waste handling where informal workers (or scavengers) are involved in waste collection, sorting and identifying material for recycling and reuse. The Indian system where almost all component of waste are sorted and reused is well-known. But additional examples are found in areas like minimizing food waste and establishing social safety nets (Tucker and Anantharaman, 2020). Had governments appreciated the role of the informal sector and the activities undertaken, the period since March could have been used to change towards a ‘sustainability footprint’.
So, instead of using the (unfortunate) challenge to aim for positive change why have governments then been so keen to do the opposite and merely lockdown the informal sector (including denying poor people of their meagre livelihoods)? As Tucker and Anantharaman (2020) argue, it might be due to informal work being perceived as a ‘deficit’ (lack of contracts, lack of permits, lack of tax payment, lack of this and lack of that). International organisations like ILO have long been arguing in favor of ‘formalization of the informal’ (ILO, 2019). And not to romantize the informal sector, nevertheless it is intriguing that this is and has not been a sector perceived as ‘creative, agile, flexible’ and all the buzz that the present glorification of the private sector and individual initiative otherwise has been marked by.
Now, we can’t change what have been the typical type of reactions to the Covid-19 situation across the globe, but we do note that we have increasing social challenges ahead due to rising poverty levels, the naïve, optimistic wish for the New Year is that attention will be placed on how to engage the informal sector and all its resources in the strive for a more sustainable development path. It will not only open up the Pandora’s box regarding new and valuable ways on dealing with the Global trajectories, but could provide avenues for the informal sector to be reckoned as ‘a contributor’ (instead of ‘a deficit’).
Søren Jeppesen is Associate Professor at the Department of Management, Society and Communication at Copenhagen Business School. His research concerns the development of firms in developing countries. He focuses on SMEs, CSR and driving forces (or lack of same) for strategies of SMEs in developing countries in engaging in CSR (or not engaging).
In the midst of the global coronavirus crisis, the International Olympic Committee (IOC) and the Japanese government finally decided last month to postpone the Tokyo 2020 Olympics until next year. The general public across the world may have different views on the Olympics – positive and negative, or simply indifference. But with regard to the Tokyo Games, there is a fair reason for not just postponing them but reconsidering their relevance and preferably cancelling them altogether. The ongoing Covid-19 pandemic has underscored the long-standing controversies surrounding the Tokyo Olympics, and it is indeed sustainability that is at stake.
Economic problems in the host country
A tag line that Tokyo, the host city of the 2020 Olympics, has been using is “Recovery Olympics” for a sustainable future. The “recovery” is primarily referring to the recovery from the 2011 earthquake and tsunami, and the ensuing nuclear disaster in Fukushima, a city in northern Japan. When Tokyo was successful in its bid to host the Games, it estimated that the market effect of the Olympics and Paralympics would be more than JPY 32 trillion in total, which would be a huge boost to Japan’s shrinking economy. Clinging on to this rather optimistic figure, the IOC and the host government were reluctant to make any change to the original schedule in spite of the coronavirus pandemic, and their attitude was criticised as “wildly irresponsible” (Boykoff, 2020).
Besides the cost-benefit analysis of the Tokyo Games, it should be noted that, as of March 2020, nine years after the Fukushima disaster, approximately 48,000 people were still living in evacuation zones in Japan. Despite this, a huge amount of money has been spent on constructing new facilities for the Olympics, rather than aiming to reconstruct “sustainable cities and communities” (Sustainable Development Goal (SDG) 11) in the disaster-hit northern city. Meanwhile, the Tokyo Olympics has been the most over-budgeted Games ever, because of Tokyo’s lax policy.
Postponing the Olympics will entail an extended preparation/maintenance period for another year amid uncertainty, which is likely to impose an additional tax burden on citizens. It is highly questionable whether the host government has appropriately prioritised key issues and allocated resources accordingly.
Environmental issues: Value chains in the global sports industry
The Olympics is big business, involving not only elite athletes, but also a large number of stakeholders such as sponsors, media, providers of various products, and spectators. A mass of people moves across borders and within the host country, consuming a great number of goods in just a few weeks. The huge amount of greenhouse gases and waste that each Olympic Games generates has been the subject of continuing international debate. These are also the problem areas addressed by SDGs 12 and 13.
On the other hand, the United Nations recognises that sport can be an enabler of sustainable development (UN General Assembly, 2018). If the host is committed to the SDGs, and stakeholders and resource-rich companies/countries collaborate to implement environmentally friendly technologies and practices, the Olympics could be a showcase of new ideas to facilitate sustainability. In this regard, the Organising Committee of the Tokyo Games has promoted several sustainability concepts and plans. Nevertheless, a group of non-governmental organisations has raised a question concerning Tokyo’s approach (Heineken, 2019). They reported that a huge new national stadium for the 2020 Games was built by cutting down trees in Indonesia and Malaysia, thereby damaging these countries’ efforts to preserve their rainforests (SDG 15).
When it comes to a mega sporting event such as the Olympics, we tend to, somewhat naively, pay attention to the downstream, in which big brands, celebrities, impressive new technologies and goods to consume are all visible, and we are often ignorant of what is happening in the upstream.
If the upstream of the whole value chain is neglected and sustainability is used (or misused) as just a fancy concept, while economic actors act irresponsibly, the SDGs will never materialise.
Health concerns: Summer heat as usual, and now Covid-19
Since Tokyo was selected as the host city for the 2020 Olympics, persistent health concerns have been raised. One of the almost inevitable problems in Tokyo is, in fact, a hot summer, which Weather Atlas describes as “oppressive humidity and extremely high temperatures”. Indeed, many people actually suffer illness each year due to the summer heat in Japan; in 2019 alone, more than 70,000 people were admitted to hospital due to hyperthermia.
Although Tokyo insists that the Olympic venues will be closely monitored with adequate safety measures, it is unclear how this can be guaranteed, not just for the athletes but also for the volunteers and spectators in the different locations.
Now, a new and bigger concern certainly involves Covid-19. To date (as of mid-April 2020), the number of confirmed cases in Japan has been significantly lower than the other G7 nations as well as neighbouring Asian countries. However, medical experts and other countries are sceptical, questioning whether Japan may be overly restricting coronavirus testing in order to maintain its safe image for the sake of the Olympics. Of course, the slow testing could be due to other factors such as the limited availability of testing kits, which has also been a problem for other countries. Nonetheless, the root cause of the concern is the slow response of the authorities in taking the necessary action, because this would trigger an explosion of infection cases as we have witnessed in other countries.
Although Tokyo eventually declared a state of emergency on 7 April, this was a few weeks later than the lockdowns enforced by many major countries, and two months after a coronavirus outbreak on the Diamond Princess cruise ship anchored offshore in Yokohama, just 30 km from Tokyo. Tokyo’s lenient approach casts doubt on its capability of dealing with communicable diseases when a rapid response is crucial (SDG 3).
The point is not to abolish all future Olympic Games as this global sporting event can be an important platform for athletes, and potentially a contributor to peace (SDG 16), or at least a symbol of it. However, the Tokyo Olympics is missing the meaning behind sustainability in many ways. Furthermore, amongst other factors, it is also ill-timed. The world is now facing a serious challenge on a global scale.
One clear message that the coronavirus pandemic has taught us is that we may be vulnerable wherever we are – even in a wealthy country – and that we all have a responsibility to strive for sustainability.
In this context, financial resources should be invested in essential products and vaccine research to tackle Covid-19, and human resources should be allocated to immediate needs to sustain local societies. In short, get the priorities right. Then, strong global partnerships and cooperation (SDG 17) will hopefully facilitate our efforts and achieve a more meaningful positive outcome.
About the author
Faith Hatani is Associate Professor at the Department of International Economics, Government and Business at Copenhagen Business School. Her research interests reside in the role of international business in sustainable economic development, focusing on responsible management of value chains and institutional constraints in different industries and countries.
The coronavirus and responses to the pandemic are right now defining human existence inside and outside of organizations. All societal attention and communication are centred on the virus, its day-to-day consequences and possible future repercussions for the people, the economy – and the planet.
Indeed, we are living through a gargantuan social experiment, and these can turn out to be the defining weeks and months of the new decade. Social distancing. Lockdown of public institutions and private businesses. Closing of national borders. No travelling, no tourism. All live entertainment (sports, music, culture) suspended. Places for social gatherings (restaurants, cafés, bars) closed (except for takeaway). Until further notice. The mind boggles.
The closing down of open societies is blocking the blood flow of large parts of the economy, spelling potential disaster for many businesses and cultural institutions – in spite of large relief packages. Meanwhile, waters are clearing and air pollution is going down due to the drop in industrial production. There is an ominous air about these climatic improvements, though. They seem more like a morbid dress rehearsal for life on earth after human civilization than a silver lining.
Is it the end of the world as we know it? Certainly, we can expect – at least in the privileged global north – that life will soon return to something much more normal than the current ‘show responsibility by staying as far away as you can from other people’. In Denmark, the gradual reopening of society is already underway.
However, the question remains whether we will look at each other and on human interaction (particularly in large social gatherings) in the same way as we did before. Will the awareness of ‘the others’ close to us as potential carriers of disease somehow stay with us.
Certainly, the comparisons with war are fitting. Who would have thought that anything except a worldwide war could affect all people’s social lives and the workings of government and business so rapidly and profoundly?
The pandemic constitutes a crisis of public health and health systems of unforeseen magnitude. The noun ‘crisis’ derives etymologically from the Greek krinein (Latin: krisis), which means ‘turning point of a disease’. This point was made repeatedly in the wake of the financial crisis of 2008-9: a crisis constitutes a turning point and thus an opportunity for new things to happen, for things to be different and perhaps better than they were. As the saying goes: ‘never let a good crisis go to waste’.
After sickness, there is newfound health. A crisis is not supposed to persist. However, recent years have taught us new lessons. Crisis has to understood in the plural, as crises, there are many of them (climate crisis, refugee crisis, trust crisis etc.), they are systemic and interconnected and they do not seem to go away.
Thus, we live in an age of perpetual or recurrent crises. We can imagine another side to where we are now, a new and more social normal, but it is becoming more and more difficult to imagine a future without some profound element of crisis.
Speaking of the interconnectedness of crises, what impact will the pandemic have on sustainable development and the green agenda? Will the public health crisis, its resultant need for emergency relief and its immediate and longer-term negative impacts on the economy take the wind out of the sails of green transition for a while? Making us waste precious time.
Or will this crisis and the efforts needed to get the economic wheels turning again turn out to be the greatest of opportunities to invest in green infrastructure and the solutions needed to create a more sustainable future? At this time, it is anyone’s (more or less qualified) guess. Not least because the answer depends on actions not yet taken by government and business leaders. Both narratives are out there.
The pandemic obviously lends itself to many interpretations. Among them faith-based apocalyptic visions of the end of times. Others see potential in this for putting an end to capitalism, as we have known it. Certainly, market-based solutions are taking a backseat to government intervention in our current predicament. It appears that in times of profound crisis we have to rely on big government (federal, local) and political leadership to take care of the common good and sort things out.
Time will tell whether or how the pandemic and all that comes with it will change people’s view of the market economy and of the need for government intervention in the market economy – not to mention people’s proclivities to consume, travel, engage with (many) others in the experience economy etc.
The more moderate take is that we need a regulated market economy and that the current crisis shows the limitations of cost/benefit analysis and the neoliberal urge to subject all things to marketization and economization. In light of the human suffering and the deaths caused by the coronavirus and facing health systems and heroic health professionals in distress, the cost/benefit mindset has come up short. This calls for immediate action and full commitment – even if the odd economist may question the utility of such a course of action.
We should take this lesson with us into the broader realm of sustainable development. Market thinking will not suffice.
About the author
Steen Vallentin is Director of the CBS Sustainability Centre and Associate Professor in the Department of Management, Society and Communication at Copenhagen Business School. His research is centred on CSR (corporate social responsibility) and sustainable development in a broad sense.
Do you feel uneasy to think that companies use a humorous tone in their communications about grave challenges such as climate change, pollution and inequality? We suggest the notion of helpful hypocrisy to coin this new ironic turn in recent corporate communications.
Ironic campaigns
We have ourselves been intrigued by this new ‘ironic turn’ in corporate communications. Large international fashion brands such as Patagonia, Benetton and Diesel have recently challenged conventional informational approaches to marketing communication about sustainability, choosing instead to incorporate a humorous (or more precisely, an ironic) edge to their visual representations as they address issues of climate change.
Such campaigns are ironic because they bring a twist of message incongruity and ‘double talk’, where they show a world within which ambiguity, incongruity and contradictions are real and leaving it to consumers what to make of it. This stands in sharp contrast to conventional prescriptions in marketing communications where the idea of ‘one message’, or what we refer to as ‘single talk’, prevails with the purpose of targeting consumers effectively. In our recently published paper, we suggest the term ‘helpful hypocrisy’ as a way of coining the ironic turn.
On the one hand, these new ironic messages show consumers the dire consequences of pollution, climate change, flooding and deforestation (i.e. implications of consumption) and on the other hand, they simultaneously carry strong aesthetic appeals to enjoy life and consume more, comforting consumers that ‘life goes on’ and hedonistic lifestyles will continue. In new ‘twisting’ advertising campaigns, companies blend these two narratives in complex, ironic visualization.
Such double talk is often deemed hypocrisy and greenwashing in research as well as in practice. And while we agree with such assessment, our analysis shows that there is also something else going on.
Double talk
We point to how such double talk may also provoke critical reflection and surprise through displaying inconsistencies between ‘talk’ and ‘talk,’ and hereby engage its audiences as more than passive recipients. In a cosmopolitan context, where people like to think that they are able and capable of critically reflect on their own lives and make their own decisions, preaching and moralizing communications about ‘good behavior’ is becoming increasingly less effective.
Youth is particularly opposing being told what to do. And even in spite of the severe consequences of continued consumption, a certain ‘climate change fatigue’ has entered the market. Consumers know that they should buy less and more sustainable products, but they are resistant to messages that give them feelings of guilt and shame.
In such a world, we suggest, one way to gain traction is to engage audiences in ironic and humorous communications in which the receiver is him- and herself activated to interpret incongruous ambiguous messages.
Helpful hypocrisy
Analyzing Diesel’s Global Warming Ready campaign, we find how the technique of irony is particularly outspoken as beautiful people in beautiful clothes are inserted into out-of-place environments, juxtaposing them if you will, by the dire implications of climate change, in a way which makes the whole scenery appear absurd.
In our analysis, we develop an analytical model that positions irony and double talk vis a vis conventional marketing campaigns.
We point to how the blend of climate change and luxury consumption is an ambiguous affair, and we show how incongruity is present across four levels of Diesel’s use of irony: fantasy versus reality (framing), survival versus destruction (signifying), utopia versus dystopia (symbolizing) and political activism versus consumer society (ideologizing).
Without moralizing or telling consumers what to do, or even restraining from telling consumers how good the corporate sustainable activities are, Diesel exposes the ambiguities of society and sustainability by using humor.
Now, we are not fooling ourselves. Diesel is a company with an ambition of selling more products. And where satire is a technique that intends to improve humanity by critiquing its ‘follies and foibles’, companies are generally known to have less noble ambitions.
But we argue – with Swedish sociologist Nils Brunsson – that “hypocrisy appears to be exactly what we demand of modern organizations: if we expose organizations to conflicting demands and norms, and expect that they should respond to them, then we must also expect hypocrisy” (1993: 8-9).
We propose that irony may be considered a means of ‘helpful hypocrisy’ in which the public is exposed to the contradictions and vices of society with the purpose of changing people’s opinion and create betterment of society.
References
Brunsson, N. (1989). The Organization of Hypocrisy: Talk, Decisions and Actions in Organizations. Wiley.
Sarah Glozer is Associate Professor of Marketing and Society in the School of Management at the University of Bath, UK. She is also Deputy Director of the Centre for Business, Organisations and Society (CBOS). Her research focuses on corporate social responsibility (CSR) communication, digital marketing and ethical markets/consumption.
Mette Morsingis Professor and Mistra Chair of Sustainable Markets at Stockholm School of Economics (Sweden) and Professor of Corporate Social Responsibility at Copenhagen Business School (Denmark). Her research concerns how organizations govern and are governed in the context of sustainability. She is particularly interested in how communication, identity and image dynamics work in this regard.
The image is one of the eight images displayed in Glozer & Morsing (2019) from the Diesel Global Warming Ready campaign: New York City submerged in water
Tourism is a key driver of development, particularly in areas with rich environmental or cultural resources. The United Nations declared 2017 as the year of Sustainable Tourism for Development, but how sustainable is ecotourism?
Setting off on a once-in-a-lifetime adventure on safari in East Africa for our summer holidays, my husband and I wanted to be as sustainable as possible. We carbon offset our flights, worked directly with locally owned and operated “eco-tour” providers, and engaged in both social and environmental eco-friendly activities. Yet, several moments throughout our trip made me question how eco-friendly and sustainable such travel really is or can be.
To start, what is “ecotourism”? The terms ecotourism, responsible travel, sustainable tourism, ethical tourism, green travel and more have arisen as of late to describe smaller-scale, lower-impact tourism that is qualitatively different from mass commercial tour operations. The term “ecotourism” has many definitions, most of which embody the key notions of supporting and experiencing local environments, wildlife and communities and while minimizing negative impacts. Activities may be environmental, like through small-scale tours of natural environments, or social or community-based – like our visit to a local women’s education and empowerment sewing collective in Rwanda. Tourism represents a major and increasing share of GDP in many developing countries. Indeed, such natural and cultural resources are increasingly being commodified and therefore used as justification for sustainability. According to one popular eco-travel blog,
“Elephants are worth 76 times more alive than dead. When you consider the revenue from wildlife photography tours, luxury safari camps, and other ecotourism offerings, a single Elephant is worth $1.3 million over the course of its lifetime!”
But – how sustainable are such ventures? While I have numerous examples from my two weeks of travels, anecdotes from each country I visited caused me to question how ecofriendly or sustainable these activities really are:
When nature disagrees with what is “eco-friendly”: chimpanzee tracking in Uganda (tourism=8% of GDP). After purchasing the proper permits (which help fund conservation activities), tourists are paired with a well-trained guide to track habituated chimp groups in the forest and are allowed to spend “at most an hour” with them once they’re found. Kibale Forest National Park states that “By going for chimpanzee tracking, you directly contribute to the conservation efforts.” My group got lucky and found one group of chimps within about 15 minutes, including a few on the ground which our guide had us follow through the forest. While I was happy to hang back and enjoy them at a distance, my guide – a fun but bossy, older sister type whom usually got her way – insisted that I get closer, at one point directing me ever closer a chimp lying on the ground. So, closer I went, even while in my head I was thinking “I’m too close!” In an instant, the chimp jumped up, clapped and yelled angrily, and picked up a large branch which he threw at me javelin-style! I jumped back and he moved away. I felt so conflicted, as this seemed to me a striking example of how nature (i.e. the chimp) didn’t agree with how “eco-friendly” the activity was. When I pushed back on other insistencies by our guide to get closer to the chimps, she rationalized that “If you don’t get close and get some good pictures, when you get home, you might not think it was worth it.”
Seemingly, our chimp tracking experience had a strong undercurrent of value-for-money, realized via pictures.
Wild animals may not be so wild: safari in Tanzania (tourism=12% of GDP). Departing a visitor’s center in Serengeti National Park in our safari vehicle, we – along with around two dozen other vehicles with tourists on safari – encountered a pride of lions out on a morning hunt. Large 4×4 vehicles lined the roadside, yet the lions seemed completely unperturbed by our presence, assessing the vehicles as non-threatening and navigating deftly between them. A couple of lions even used the vehicles (including mine) to hide between while they stalked their prey! This was striking to me, calling into question how “wild” these wild animals really are if they’re so used to human activity and presence that they have grown to utilize such intrusions for their own ends. Indeed, the vast numbers of vehicles in the parks and conservations areas seemed overwhelming at times, demonstrating clearly that the notions I had of “wild” animals and preserves as devoid of humans were romanticized at best or nearly inaccurate at worst.
Prioritizing tourists over locals: fast highways in Rwanda (tourism=15% of GDP). The country of Rwanda was striking to me for its cleanliness, orderliness, and structure. For example, the streets were clean (much cleaner than Copenhagen), motorbike taxis are safe and highly-regulated, the economy is booming, and the country has gradually begun to overcome its legacy of genocide to build a business-friendly, women-friendly, corruption-free future. One of the key developments has been infrastructure, including building fast highways linking major tourist destinations. While the speed at which we could travel was an undeniable benefit for us, I was constantly worried about the vast numbers of people (and in particular, children) walking, playing, and lounging by the roadside. The multitude of fast-moving vehicles posed clear safety issues to locals. Seemingly, the cultural and historical importance of roads in connecting communities and commerce had shaped both the orientation of villages (which stretched along the road, rather than deeper back or behind them) as well as how people interacted with them (as a place for playing, socializing, trading and the like). While such infrastructure improvements undoubtedly help communities transport and receive goods, foster tourism and the like, the stark replacement seemingly upended community and local norms and practices.
Sustainable tourism represents an important and apt opportunity to help contribute to sustainable and responsible development, particularly as opposed to antithetical activities popular throughout Africa such as trophy hunting (particularly “canned hunting”) and (irresponsible) mass tourism. Yet, throughout my travels I was struck by how many compromises (in my view) were being made for sustainability, be it the through taming of wildlife, prioritization of economic development at the expense of local customs, or many other examples. Others have expressed concerns too. Harvard hosts an International Sustainable Tourism Initiative, the Global Sustainable Tourism Council has set criteria and performance indicators around sustainable tourism, and an organization called the Travel Foundation has arisen to help bridge tourism with “greater benefits for people and the environment”.
Eco-tourism is undoubtedly a more responsible and sustainable option that many other tourism choices. But, let us not overly romanticize positive impacts of such travel, nor grow complacent over the trade-offs, compromises, and potentially negative impacts that it may have.
Economic problems of India were not addressed either in the 2019 electoral debates or in the recent annual budget. Markets are showing a deep imbalance between demand and supply, leading to a significant rise in loan defaults, banking crises and job losses.
MSME has not shown a tendency to grow or create jobs along expected lines despite a nationwide program of targeted lending. Indiscriminate lending in the past has increased Non-Performing Assets (NPAs) in the banking sector. The industry is still adjusting to the new GST regulations while the real estate sector has still not recovered from the demonetization shock. On top of all this, pollution is at an all-time high and climate change is manifesting itself in the form of droughts and floods in different parts of the country.
In such a slowdown, a knee-jerk policy reaction is to spur investment and growth through any means possible, including reversals on climate and Sustainable Development Goals (SDGs). Quite recently, the government allowed 100 percent FDI in the coal mining sector to spur a revival.
But in this article, we argue that a renewed focus on Sustainable Development Goals (SDGs) presents an opportunity to revive the economy, create a new wave of jobs and potentially increase the competitiveness of Indian economy vis-à-vis the SDG laggards. The discussion that follows is in the context of India but is equally relevant for the rest of the developing world.
NPA crisis and an opportunity towards SDG oriented portfolio
The main reason for a steep rise in
credit default rate is that while industries expanded capacity over time,
domestic and global demand has slowed down considerably, stranding the new
assets. The lack of market demand causes firms to default on loans. This
increases the stress on the banks, which consequently, stall the liberal credit
lines to firms, further weakening the economy.
One of the significant factors causing the NPA crisis in India is the MSME loan portfolio. MSME is the backbone of any economy. In developing countries, MSME account for 90 percent of job creation and economic activities. Over time, through hard work, market and government support, these MSME entrepreneurs are able to grow, engage in employment creation, disruptive innovation and ultimately become unicorns, which are nascent businesses with high market valuation and growth potential.
>>>However, despite the important role in job creation and liberal credit lines, MSME entrepreneurs in developing countries generally remain poorly skilled, lack proper business support, access to markets and are many times bullied by bigger firms. In the end, a great deal of capital channelled to MSME is not converted into higher value. <<<
To transform the MSME sector, government and other business-sector actors must treat MSME as students who need to learn and adopt skills related to competitive management, sustainability, marketing and financial reporting so that competitiveness and sustainability become inherent within the firm. MSME entrepreneurs can aspire globally through exposure from government-sponsored programs to attend MSME events in Denmark (for their dairy and animal industry), Germany (manufacturing), Italy (leather and fashion). They can learn more about international market trends and technologies where the bottom lines are firmly grounded on SDG compliance.
Unlike bigger players which are slow, suffer from legacy issues; MSME is flexible enough to embed elements of sustainability and SDGs in their supply chains and value creation processes.
To survive and grow in a world with increasing climate change regulations, better cooperation is required between public institutions, banks and MSME entrepreneurs to work hard in sync, learn new practices and standards. Long-term growth requires MSME to make sustainability and SDG compliance inherent in the business plan, business model, management structure and type of service and product offered.
>>> Indian banks must actively focus on new industries creating products with lower environmental footprints. <<<
For example, instead of providing loans to typical plastic manufacturing SMEs, they must provide loans to entrepreneurs setting up green-materials factories, alternative plastic (biodegradable) factories, bio-diesel, or EV vehicle factories, which are environmentally efficient, follow international standards and are helping the nation achieve its Paris Agreement targets. The growth of competitive, innovative and greater SDG compliant MSME would make Indian economy stronger and mitigate job crises.
SDG focused Real-Estate Sector Regulation
Another cause of NPA crises in India is the rising real-estate inventory. Real estate sector was one of the largest employers during the 2004-2016 boom years of India (which is also true for most of the developing world). The assumption among investors during that period was that the real-estate will continue to grow and their investments will remain secure and ensure above-market returns. However, in the boom period, real-estate prices far exceeded their value, causing market failure in the current economic downturn.
But during economic downturns, it is relatively easier for politicians to make difficult decisions (as the public mandate is easier) and enforce innovative policies.
To address the issue of real estate inventory, the government must introduce regulations in the real estate market with quality controls, sustainability measures, green building codes, controls on the number of floors constructed, the green area within the apartment, restrictions on distance from the essential public services like a train station, police station, college, hospital, schools.
The regulations must forcefully move the industry towards significant sustainability goals (like those in Western Europe) with higher compliance on long-term sustainability, energy efficiency, and reliability. In addition to explicit sustainability actions like certification, greenified surroundings; firms and the government must focus on developing the real-estate sector, which is firmly embedded in a social, cultural and artistic milieu. Research has shown that housing where the communities have active social and cultural interaction tends to have higher value and lower crime.
Specific SDG driven controls would decrease the supply, increase the quality offered, and would significantly increase the value of the real-estate sector. If the buyers feel that their real-estate investments have greater value for a more extended period, the buyers and sellers will invest in the sale and purchase of the real estate, which would relieve the banks from possible NPA risks. The increased transactions in the real estate market would generate liquidity in the market that would further spurn growth. This suggestion on regulating the market stands in contrast to current appeals for liberalizing the real-estate sector. The liberalization of the real-sector has led to a rise in indiscriminate investment, increased half-built and abandoned sites which are causing a rise in water pollution, dust pollution and even dengue.
Pollution and Climate Change
Extreme climaticevents and increased pollution are related to externalities that are threatening the sustainability of the Indian economy. The winter smog around the national capital Delhi significantly reduces the productivity of the city while putting residents under severe health risks. Lengthening of summer and unpredictability of monsoon is increasing water stress, as well as floods, which is putting households under stress and decreasing the overall national productivity.
To address these challenges, research-based and region-specific adaptation and mitigation investments will enable different regions to transform towards climate-resilient economic societies.
The government must invest in energy-efficient, global standard-compliant power plants to reduce smog around North India.
In addition, the government and private sector must invest significant capital in solar panel production, the infrastructure of EV automobiles, greener-sustainable materials, circular economy and responsible consumption. The green climate fund (GCF) has a specific mandate for adaptation finance for climate resilient agriculture and flood resilient infrastructure. The GCF is an interesting and evolving repository of knowledge which should help governments in designing and implementing climate mitigation and adaptation policies and investments.
Businesses around these emerging technologies are most likely to generate the next wave of job growth in the manufacturing sector.
In conclusion
Economic downturns are stressful times, but it is also said that “never let a crisis go to waste”. The downturns offer opportunities to re-write innovative policies as the public mandate is stronger for a change. India must use its current economic downturn as an opportunity to re-write public policies by incorporating elements of SDGs at each level of conception and decision and transform towards a greener, climate-sensitive and sustainable space. Sustainability at each level is the new competitive advantage and the emerging nations must capitalize it.
About the authors
Anirudh Agrawal is a doctoral fellow at CBS. His research interests are MSME finance, impact investing, social entrepreneurship and organizational 4.0. He is a chief strategy officer at Tvarit AI GmbH focusing on sustainable AI driven IT solutions and a visiting professor at Flame University India and formerly Assistant Professor at Jindal Global University.
Ashish Tyagi is currently a post-doctoral fellow and lecturer at Frankfurt School of Finance & Management. He completed his PhD from Penn State University. His research interests are environmental economics, climate change policies and sustainable transformation.
Small-scale entrepreneurial activities currently provide livelihoods to a large proportion of the youth population in sub-Saharan Africa
In spite of a promising rise of entrepreneurship, we should be careful not to celebrate youth entrepreneurship uncritically
Approximate reading time: 3-4 minutes.
Africa is teeming with business activity managed by young people. In cities and towns, young traders are touting their goods in traffic jams, trying to sell everything from phone credits and toilet paper to drinking water and Christmas decorations. Alongside streets and pathways, young people sell a variety of items and foodstuffs from table tops or shacks. In neighbourhoods, women operate hairdressing salons and dressmaking shops often from their homes, whilst young men carve wood and fix electrical equipment. In the busy market places, young women and men trade a variety of goods including locally grown fruits and vegetables, imported new and second-hand clothes, shoes, mobile phones, and housewares. Some young people offer inventive services as and when the need arises; young men fill in potholes on the roads, hoping that passing vehicles will acknowledge their work with a token payment, while others rent out gumboots to pedestrians who seek to pass flooded streets. Others again act as ‘traffic police’ when narrow roads become jammed with cars, motorbikes and minivans.
Everyday Forms of Entrepreneurship Such entrepreneurial practices might seem mundane, trivial, or insignificant when compared to instances of high-growth and high-tech entrepreneurship in the global North. And some might even dispute whether these types of income-generating activities should at all be labelled entrepreneurship. Yet such “everyday forms of entrepreneurship” (Welter, 2017) are significant since they currently provide livelihoods to a large proportion of the youth population in sub-Saharan Africa.
In the book ‘Young Entrepreneurs in Sub-Saharan Africa’ (Gough and Langevang 2016), we examine the rates, characteristics and experiences of young entrepreneurs in Ghana, Uganda and Zambia. Drawing on surveys conducted by the Global Entrepreneurship Monitor, we show how African youth are the most entrepreneurial in the world with around 40% of young people in Ghana, Uganda and Zambia being involved in “early state entrepreneurial activity” (which includes young people aged 18-35 setting up a business or running a business less than three and a half years old). These levels are equal to or higher than the adult population in their respective countries, and much higher than their youth counterparts in other regions of the world where average rates range from just 9% in Europe to 18% in Latin America.
Youth Entrepreneurship in Africa – Promises and Limitations At first sight these high rates of youth entrepreneurship might look encouraging for African governments and international development organisations, which are increasingly promoting youth entrepreneurship as a solution to the mounting youth unemployment crisis. Whilst Ghana, Uganda and Zambia, together with a number of other African countries, have experienced high and sustained economic growth rates during the last two to three decades, the growth has not generated adequate, decent jobs. In a situation of very limited wage employment, and a rapidly growing youth population, young Africans are increasingly encouraged to change their mind-set from being ‘job seekers’ to becoming ‘job creators’ and are hard pressed into using their entrepreneurial ingenuity to start their own businesses as a means of creating livelihoods for themselves.
When looking closer at the statistics and listening to the experiences of young people, however, the picture is mixed. While entrepreneurship rates are high and the attitudes to business start-up very positive, a common characteristic of African young entrepreneurs is that their businesses stay at the micro-level and are concentrated in the informal economy, hence lie outside the protection and regulation of the state. Their businesses are concentrated in a limited number of vocations, with the majority engaged in trading or providing similar services. Competition is, therefore, cutthroat and earnings minimal. Noticeably, the majority of young entrepreneurs have no or only a small number of employees, which means they contribute little to job creation apart from self-employment, have low expectations for growth, and their businesses close down at a high rate.
Consequently, we should be careful not to celebrate youth entrepreneurship uncritically. It is important to acknowledge that not all young people have the skills or resources required to pursue viable entrepreneurial ventures. Indeed, most young people in Africa currently appear to be poorly equipped to become successful entrepreneurs in the sense of establishing durable businesses and growing them. There is also the risk that an excessive focus on entrepreneurship becomes a way to blame young people themselves for their misfortunes and provides an excuse for states not to deliver welfare services and ensure decent jobs (Jeffrey and Dyson, 2013).
No Silver Bullet for Tackling Youth Unemployment in Africa So far the strong policy discourse on entrepreneurship in Africa has not been backed by adequate support measures. While the book reveals that the three African countries have all witnessed a similar mushrooming of entrepreneurship promotion schemes initiated by governments, NGOs and international development organizations, the general picture emerging is that youth entrepreneurship promotion is characterized by many uncoordinated schemes, which tend to have limited uptake and scope. Moreover, there tends to be a quite narrow focus on promoting business start-ups through providing finance. While more holistic approaches to entrepreneurship promotion are clearly needed it is equally vital that entrepreneurship is not singled out as the only solution to the youth unemployment crisis but rather is seen as just one element of broader labour market policies, which cannot themselves be separated from wider policies aimed at stimulating job-generating, inclusive, and sustainable economic growth and development.
Thilde Langevang is Associate Professor of Entrepreneurship and Development Studies at Copenhagen Business School.
Katherine V. Gough is Professor of Human Geography at Loughborough University.
Was the process leading up to the SDGs really an exercise in global democratic policy making?
Although broad consultation efforts shaped the process, these alone were not able to alter the power structures undergirding the political economy of aid.
In the end, UN members states finalized the agenda behind closed doors and civil society organisations were once again relegated to serving as commentators and claqueurs.
Approximate reading time: 3-4 minutes.
The MDGs: An exercise in top-down development planning Almost twenty years ago, a small group of white men sat together and dreamed up the Millennium Development Goals (MDGs). Soon after, the United Nations (UN) deployed them as carrot and stick to halve extreme poverty and hunger, reduce infant mortality, and put all girls and boys into primary education, all by 2015. There was real confidence that the MDGs’ top-down programming would eventually reach the farthest and most destitute corners of the globe, and that national as well as global resources would finally be spent on well-coordinated and effective projects. Listening to UN technocrats pontificate about the MDGs’ indispensability, one could have almost believed that old-fashioned development planning had finally been put on the right tracks. By the end of the exercise, thousands of new jobs in the international development industry had been created, yet most of the goals had been missed. The MDGs had begotten a hyperactive global network of goodwill ambassadors, faithful implementers and intrepid evaluators staff while billions in the global South continued to suffer.
The SDGs: Consultations as the end of procedural elitism? The Sustainable Development Goals (SDGs) were supposed to end the MDGs’ dual legacy of procedural elitism and edentulism. Framed by the UN as the world’s foremost post-2015 development agenda, the new goals were designed to be more comprehensive in both scope and impact. Crucially, the UN also launched considerable efforts to incorporate voices from outside of the UN system. Thematic consultations took place around eleven areas selected by the UN Development Group (UNDG). They were complemented by web consultations, national consultations in 88 countries, and global high-level meetings. In addition, the UN created two websites to allow for direct consultation by inviting users to submit proposals and vote for challenges they considered most pressing. Moreover, a UN-sponsored civil society organization (CSO), ‘Beyond 2015’, brought together another 1,000 CSOs participating in national consultations.
Global democratic policy making – high aspirations, sobering facts Undeniably, these efforts marked a clear departure from the MDGs’ backroom fecundation. But have they been sufficient to justify senior UN staffers’ praise of the SDGs as an exercise in global democratic policy making? Broad consultation alone does not alter the power structures undergirding the political economy of aid. Instead, it creates a thin layer of legitimacy that fades away as soon as accountability in invoked. The process leading up to the SDGs was rooted in an assumption that a goal-based framework was the only viable option; alternatives to such goals were never considered publicly. Countries were selected by UNDG and UN Resident Coordinators, and the breadth and depth of national consultations varied starkly. And although UNDG’s final report listed crowd-sourced issue rankings, it did not provide any rationale for excluding issues from subsequent high-level negotiations.
Closed doors, revisited In the end, UN members states finalized the agenda behind closed doors. CSOs were once again relegated to serving as commentators and claqueurs. When push came to shove, the UN leadership thus followed its half-century-old practice of elitist international governance. Even though the UN leadership has been relentless in praising the virtues of accountability for post-2015 development cooperation, it has so far shied away from institutionalizing accountability in a way that would really make a difference: between the UN system and its powerful national agenda setters on one side, and CSOs, taxpayers, and intended beneficiaries on the other. If the SDGs demonstrate anything, it is that the UN remain unlikely to usher genuine global democratic governance into being.
Daniel E. Esser is Associate Professor of International Development at American University’s School of International Service in Washington, DC. His research on local governance amid violence, organizational management, and global health politics is widely cited. A former staff member of the United Nations in New York and Bangkok, he follows the organization’s continuous struggle to make a difference in the world from a safe academic distance. He can be reached at esser@american.edu.
