Corporate Disruptors:How business is turning the world’s greatest challenges into opportunities

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This report is in collaboration with the World Economic Forum’s Young Global Leaders Community and an output of the YGL Sustainable Development Goals initiative.

The Forum of Young Global Leaders is a unique, diverse, global community of the world’s most outstanding, next-generation leaders nominated under the age of 40, who commit a portion of their time to jointly shape a better future and thereby improve the state of the world. To achieve its mission, of shaping a positive future, the Forum of YGL acts as a platform for young leaders to be both a voice for the future in global thought processes and a catalyst for joint action when appropriate. Together, its community members form a powerful international force for the global common good.

2015 2050

Enormous value creation potential by providing Quality healthcare at A�ordable price in an easily Accessible manner.

Access to primary healthcare and changing demographics are driving the global health and well-being development agenda

What does this mean for the business?

$34 bn

Projected global telemedicine market by the end of 2020

$87.7 bn

Low income Health Care Opportunity

8.9 bn

Potential access to skilled professionals across 107 countries

Businesses need to invest in state of the art infrastructure, identify the right partners and develop innovative operating models to realize this value.

Read our full report to find out how

Unilever’s Lifebuoy soap has an ambition to improve hand washing habit of 1 billion people, thereby reducing incidence of child death up to 44%.

Infant Mortality

43 deaths per 100,000 births

(Against SDG target of 25)

Maternal Health

210 deaths per 100,000 births

(Against SDG target of 70)

89%of 1.8 billion youth aged 10-24 live in developing economies today

Over 80%of the world's aging population (over 60) will live in developing countries by 2050

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Introduction 4

A new world for business 5

The world’s greatest goals – What does this have to do with business? 8

Deep Dive: From the MDGs to SDGs 10

Key enablers 14

From responsibility to opportunity 16

Detailed chapters 18No poverty 19Zero hunger 28Good health and well-being 37Quality education 48Gender equality 58Clean water and sanitation 68Affordable and clean energy 78Decent work and economic growth 89Industry, innovation and infrastructure 98Reduced inequalities 107Sustainable cities and communities 116Responsible consumption and production 126Climate action 136Life below water 146Life on land 156Peace, justice and strong institutions 165Partnerships for the goals 174

Contents

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Introduction

Demand for goods is outstripping the supply of finite virgin resources, resulting in commodity price volatility and escalation, as well as severe negative environmental impacts.

Do these sound familiar? They should, because that is the world in which global businesses operate today.

As these five trends have converged to create a world characterized by volatility, uncertainty and complexity, companies understandably find themselves in a quandary: They are unsure of what it all means for their business—both now and in the long term. But perhaps even more important, there are no clear clues for how they should respond.

Enter the global development agenda and the Sustainable Development Goals (SDGs). As companies grapple with how they need to change their organizations to thrive and grow in today’s evolving, often chaotic, world, the SDGs can serve as a guiding light. They are a framework that can help companies capitalize on the possibilities inherent in these macro trends by entering new markets, developing new solutions and services, and creating entirely new businesses.

A number of leading companies—corporate disruptors— have found a way to grow and increase competitiveness despite, and sometimes because of, the global challenges they face. They are already using the SDGs to help them replace the notion of Corporate Social Responsibility with something much more powerful: Corporate Social Opportunity. In the process, they are creating new value in new ways—whether it is by growing revenues, reducing costs, mitigating risks, improving brand value, or some combination of the four.

In the following report, we describe how companies can move beyond a focus on overcoming the volatility, uncertainty and complexity of today’s marketplace. Instead, we look at how companies can use the SDGs to find opportunities to grow and “future-proof” their business—all while generating the significant societal and environmental benefits that their customers, as well as the global community, increasingly value.

Shifting patterns of global growth, especially in emerging economies, are making customers a moving target. Demographic changes are roiling both the consumer and labor markets, posing significant challenges for customer and talent acquisition and retention. Digitally empowered consumers have higher expectations than ever, and are taking companies to task that do not meet them. Enormous business potential exists in the data companies collect, but pressure is increasing to be much more vigilant in how that data is secured and used.

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Urban Population in 2050 (mn)

India

United States of America (USA)

Nigeria

Brazil

Pakistan

Indonesia

Mexico

Philippines

China

Russian Federation

875 mn

365 mn

218 mn

204 mn

199 mn

190 mn

113 mn

101 mn

1,038 mn

96 mn

China India USA Nigeria Brazil

Pakistan Indonesia Mexico Philippines Russia

73% 54% 90% 75% 94%

59% 66% 88% 69% 83%

Percentage (%) reflects the urban population as a fraction of the total population

Shifts in global demandFor the past two decades, the global balance of power has been slowly shifting from highly developed to emerging economies. Developing countries already hold around two-thirds of the world’s total foreign exchange reserves. And by 2020, the combined output of the three leading emerging economies—China, India, and Brazil—will surpass the aggregate production of the United States, Germany, United Kingdom, France, Italy and Canada.1

Accompanying the rise of emerging markets is an unprecedented wave of urbanization. In 1950, rural areas were home to a majority of the global population. Today, over half of the world’s population live in urban areas.2 And the trend shows no sign of stopping: Over two-thirds of the global population will likely be urban dwellers by 2050, driven predominantly by today’s emerging economies.

Perhaps these figures should not be surprising, given emerging economies are projected to represent a major share of global population overall, with India, China and Nigeria alone accounting for approximately 3.5 billion people (out of the projected global population of around 9.7 billion) by 2050.3

Along with urbanization comes increasing affluence. According to estimates by Reuters, the global middle class is expected to more than double by 2030, reaching 4.9 billion.5

These population growth patterns will shift consumer growth and purchasing power from rural to urban areas and from developed to emerging economies. Businesses will need to realign their growth strategies and their suite of products and services to tap into these new markets and consumer pools.

A new world for businessThe world is changing rapidly—the evidence is all around us. The next few decades will see significant shifts in consumer demand, buying power and expectations, driven by massive population migrations and widespread information availability. At the same time, an increasingly resource-constrained world will be forced to deal with decades of unfettered growth and unsustainable consumption of natural resources. The implications for businesses are significant: With these changes fundamentally redefining the rules of the game, companies increasingly recognize they must take a deeper look at what this new day dawning means for them and how they should respond. Five major trends, in particular, are forcing companies to find new and innovative ways to deliver value for their stakeholders.

Figure 1: Top ten countries with highest forecasted urban populations (2050)4

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Percentage (%) reflects the country’s population in the respective timeframe as a fraction of the global population

1950 (Estimates)Total Population = 2.52 billion

India

United States of America

Russian Federation

Japan

Germany

Indonesia

Brazil

United Kingdom

China

Italy

14.9%

6.2%

4.1%

3.3%

2.8%

2.8%

2.1%

2.0%

21.5%

1.8%

India

United States of America

Indonesia

Brazil

Pakistan

Nigeria

Bangladesh

Russian Federation

China

Mexico

17.9%

4.3%

3.5%

2.8%

2.7%

2.7%

2.2%

1.8%

18.1%

1.7%

China

Nigeria

United States of America

Indonesia

Pakistan

Brazil

Bangladesh

Democratic Republic of the Congo

India

Ethiopia

13.9%

4.1%

4.0%

3.3%

3.2%

2.5%

2.1%

2.0%

17.5%

1.9%

2020 (Projections) 2050 (Projections)Total Population = 7.76 billion Total Population = 9.73 billion

Figure 2: Changing world order: Most populous countries from 1950 to 205018

The dual demographic bulge The world isn’t just growing. It’s growing at opposite ends of the hourglass. At one end is the elder population. Today, the global population aged 60 or above is about 901 million, around 12 percent of the overall global population.6 By 2050, this is expected to jump to more than 2 billion, constituting almost 20 percent of the overall population.7 Developed economies are expected to contribute most significantly to this aging trend.8 In Europe, for example, around 24 percent of the population is currently aged 60 or above, the highest in the world.9 By 2050, with the exception of Africa, all major areas of the world are expected to have more than 25 percent of their population above 60 years.10

On the other side of the hourglass is the young population, generally centered in many developing economies. In Africa, for example, around 41 percent of the population is under the age of 15, and an additional 19 percent are between 15 and 24 years old.11 Similarly, over 40 percent of the population of Latin America and Asia is under the age of 24.12

Further illustrating the emerging-developed economy divide is this: The median age in the world’s least-developed countries today is 20, compared with 42 in Europe.13 By 2050, we will likely see the same schism, with the median age of the least-developed countries rising to 26 compared with 46 for Europe.14

As these dual trends play out, businesses will need to rethink their consumer and employee strategies. There are certainly new commercial opportunities in better targeting a young population (often with more disposable income) or an aging consumer base (often with greater brand loyalty). But there also are talent-related challenges as millions of people leave and enter the workforce at very different career stages. According to a recent Accenture survey of more than 1,000 senior executives, “attracting, retaining and developing skilled talent” is a primary concern for business, and that is not likely to change anytime soon.15

The rise of the informed consumerAs the global population shifts, a different kind of consumer is emerging, one who is greatly enabled by the growth of digital technologies. This consumer is more connected and more informed than ever, and has higher expectations for both government and business.

Recent research backs this up. In a recent study of around 30,000 consumers across 20 countries, almost 72 percent indicated businesses are failing to meet their expectations.16 That same study found today’s consumers expect more from their purchases than just the acquisition of products and services—and it is an expectation that companies currently fail to meet. For example, almost 81 percent of surveyed consumers said a product’s ability to enable healthy lifestyles is an important purchase criterion; however, only 42 percent believed companies are currently meeting this need.17

At the same time, consumers are becoming increasingly conscious of their purchases and expect businesses to be both open and ethical about their products and services—an area in which businesses are also falling short. For example, in a survey of 500 executives,

almost 83 percent think the transparency of products’ supply chains affect consumers’ confidence in a brand and their buying behavior.19 Yet, in another survey, 67 percent of the 1,000-plus senior executives surveyed said businesses are not doing enough to tackle sustainability challenges.20

Perhaps the most severe criticism leveled by consumers is the one that emerged from a survey conducted by Edelman Trust in 2015.21 More than half of the people in that survey believe business innovation is driven by greed and money rather than an intent to benefit society, and that there isn’t sufficient government regulation for many industry sectors.

Digital technologies are helping companies respond to consumers who demand more than just products and services from business. By 2030, Information and Communication Technology (ICT) will connect 2.5 billion extra people to the “knowledge economy.”22 This will provide 1.6 billion additional people access to healthcare and almost 500 million new consumers access to e-learning tools. And for businesses, the opportunities to monetize this new ICT-enabled access are huge. An assessment of eight economic sectors—mobility and logistics, manufacturing, food, buildings, energy, work and business, and health and learning—found ICT could generate more than $11 trillion in economic benefits per year by 2030.23

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Resource use

Economic development

1

10

100

10,000 100,000100 1,000

Colombia

China Brazil

Bangladesh

Australia

Germany

Chile

Sweden

Niger

India

Tons/Cap

GDP/Cap

2.5 billion new consumers to join the

middle class by 2030 (+100% vs. 2013)

Figure 3: Log plot of resource use and economic development (2010, 166 countries)35,36

Expectations for digital responsibilityThe exponential growth of digitally enabled products and services will be a boon for businesses everywhere. For instance, by 2030 there will be more than 100 billion “connected devices” around the world.24 This surge in digital connectivity that will enable organizations to access increasingly large amounts of consumer data they can use to create stronger customer engagement and loyalty.

However, while digital connectivity presents a huge opportunity to better target and serve customers, it also poses a risk with respect to ethical usage of consumer data—something consumers are clearly worried about. In a recent Accenture study, almost 44 percent of consumers indicated that they are wary about the information they share due to lack of confidence in the online security that protects their personal data.25 In another study, the TRUSTe Consumer Confidence Index, nine in 10 internet users in the United Kingdom and the United States said they would avoid doing business with companies that do not protect their privacy.26,27

The challenge for companies is how to leverage digital and the data those technologies generate to improve all dimensions of their business (and society) while ensuring they are responsible stewards of all the data they collect and use.

Natural resource complexity and environmental constraintsAccenture’s recent research on the Circular Economy finds that, at the current rate of consumption, we will be over-utilizing the planet’s resources by a factor of three by 2050.28 The demand for constrained resources (such as biomass, metals, etc.) is expected to grow from around 50 billion tonnes in 2014 to around 130 billion tonnes by 2050.29 Even in the best-case scenario, economies are not expected to produce more than 80 billion tonnes of these resources by 2050—a gap of more than 40 percent.30

With demand continuing to far outstrip supply, companies are bracing for the impact on commodity prices. In fact, it is already happening. During 1960 to 2000, every 1 percent of growth in GDP was accompanied by a 0.2 percent drop in the commodity price index.31,32,33 Since the start of the new millennium, we see price moving in concert with growth: For every 1 percent increase in GDP between 2000 and 2014, there has been a 1.5 percent increase in the commodity price index.34

Beyond the price impact is the environmental one. Based on historical trends, for every 1 percent increase in global GDP, CO2e emissions have risen by approximately 0.5 percent and resource intensity by 0.4 percent.37 Under a “business as usual scenario,” the Intergovernmental Panel on Climate Change (IPCC) forecasts temperature increases of between 2.6 and 4.8°C by the end of the century, driven by continued growth in greenhouse gas emissions.38

The inescapable conclusion from this data is that the global economy must decouple economic growth from the use of finite virgin resources to avoid volatile prices as well as reduce the negative impacts on the environment. This will require businesses to adopt new business models that enable them to reduce (and eventually eliminate) their use of finite virgin resources in their value chains, products and services.

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The world’s greatest goals – What does this have to do with business?

Figure 4: Continuum of corporate social opportunity maturity

The preceding discussion lays bare the enormous challenges companies around the world face. The five macro trends are difficult enough to address in isolation. Taken together, they can almost seem insurmountable. The reality is, companies need to change—significantly—to be able to grow and thrive in the coming decades. The question is, how? The UN’s Sustainable Development Goals (SDGs) provide valuable guidance.

Corporate Social Opportunity – Maturity Continuum

Impa

ct o

n bu

sine

ss, c

omm

unity

and

env

ironm

ent

Basic• Limited awareness of SDGs• May align a few CSR (Corporate Social Responsibility) initiatives to global goals• May sponsor internal campaigns or annual events; initiatives typically funded through CSR funds, usually without a particular expectation of RoI.

Strategic• Diligent mapping of all CSR and EHS (Environment, Health and Safety) programs to the SDGs• SDGs prioritized based on organization’s core competencies• Progress is tracked and reported through chosen indicators

Competitive• Leverage SDGs as a framework to grow business and gain competitive advantage• Typical ways of extending competitiveness include extending products and services to new markets, developing more resilient supply chains, investing in global workforce etc.

Transformational• Develop new businesses to respond to challenges / opportunities outlined in the SDGs• Actively engage diverse stakeholders (suppliers, partners, consumers, government, NGOs etc.) to shape innovative operating models

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In September 2015, 193 countries adopted the SDGs to guide global development in the next 15 years (see “Deep Dive: From MDGs to SDGs”). Through their ambitious and holistic targets—covering people, equitable growth and the environment—the SDGs can serve as a framework for tackling the challenges companies face. In fact, leading companies view the SDGs as a way to help them migrate from Corporate Social Responsibility to Corporate Social Opportunity, thereby becoming more competitive, resilient and “future-proof” in an increasingly volatile, uncertain, and complex world. Some companies are even seeing Corporate Social Responsibility as their reason for being, developing new business models to capitalize on the opportunities of the SDGs..

In considering the SDGs, companies face a strategic choice: How deeply do they want to engage in the pursuit of the SDGs? In our research we found that the more strongly a company commits to the SDGs, the more significant the impact on its business, the community, and the environment. As illustrated on the maturity continuum in Figure 4, leading organizations view global goals as a framework to differentiate themselves by expanding their customer base, developing new products and services, developing more resilient supply chains, generating future talent for their workforce and deepening their relationships with their customers and partners.

Those with the strongest commitment view implementation of SDGs through the lens of value creation—i.e. growing revenues, reducing costs, mitigating risks and improving brand value (Figure 5). These organizations are positioning themselves to drive profitable growth despite—and sometimes because of—the external challenges.

In Figure 7, we highlight how some of the world’s most forward-looking organizations are creating value by aligning with the 17 SDGs.

Grow Revenue(new products / services, serving new market segments etc.)

Build Brand(positive image through responsible operations, digital responsibility etc.)

Reduce Costs(better resource e�ciency, circular operating models, lower emissions etc.)

Mitigate Risks(license to operate, compliance through better transparency, traceability etc.)

Short term Long term

Redu

ce n

egat

ive

Incr

ease

pos

itive

Figure 5: Business value creation levers and the global goals

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Deep Dive: From the MDGs to SDGs

Figure 6: 17 Sustainable Development Goals

The Millennium Development Goals During the Millennium Summit in September 2000, the UN set out to establish its role in the 21st century by drafting the Millennium Development Goals (MDGs). These goals were aligned to the basic human rights and intended to reduce extreme poverty while promoting gender equality, education, and environmental sustainability. In the past 15 years, the MDG for extreme income poverty was cut by more than half and MDG-linked efforts have helped to reduce child mortality by 50 percent. However, despite these successes, not all MDGs were met and a need to expand the development agenda going forward remained. This paved the way for the development of the Sustainable Development Goals (SDGs).

The Sustainable Development GoalsTo build on the sound foundation laid by the MDGs, the SDGs were conceptualized at the UN Sustainable Development Conference in Rio de Janeiro in June 2012 and formally adopted by 193 member nations of the UN in September 2015. The SDGs, also referred to as The Global Goals, are a set of 17 goals that are expected to set the world’s development agenda for 2015–2030. The 17 goals are augmented with 169 underlying targets, seeking to ensure the measurability of progress.

“ The Millennium Development Goals have shown that we can make profound differences in people’s lives. The journey we started in the year 2000 has seen us build a solid foundation for further progress.”39

Ban Ki-moon (September 25, 2013)

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Figure 7: Illustration of companies creating value through alignment with SDGs

Organization Action/Initiative SDG Aligned

Daimler AG Daimler AG partnered with POEMA (local antipoverty program) in the poverty stricken north-east part of Brazil to construct a high-tech factory to manufacture headrests and seats out of coconut fibers from locally grown trees. The factory contributed to the local economic development by employing over 5,200 people and generating revenue by leveraging a locally sourced input.40

Impacted value levers: Revenue, Brand

TNT TNT has partnered with the UN to combat hunger by leveraging TNT’s services of transport optimization, fleet and warehouse management to improve aid delivery mechanisms. This partnership has delivered close to 114 specialist aid delivery projects especially during natural calamities like the tsunami in Asia in 2004, earthquake in Pakistan in 2005 and earthquake in Haiti in 2010.41

Impacted value levers: Brand

Unilever Unilever’s Lifebuoy soap brand has undertaken an initiative to improve the hand washing habits of 1 billion people, thereby reducing the incidence of child deaths by as much as 44 percent. To implement the initiative, the company has rolled out several pilots in Asia, Africa and Latin America.42

Impacted value levers: Revenue, Brand

Dangote Academy

Dangote Group (the largest manufacturing conglomerate in West Africa) invested close to $6.5 million in Dangote Academy in Nigeria to address the difficulty of finding employees with the right technical skills. The initiative is helping reduce talent sourcing costs while providing vocational training to local youth.43

Impacted value levers: Cost, Brand

Care.com While care is not a women’s issue, caregiving responsibilities are overwhelmingly managed by women around the world. Care.com, through its unique model, aims to ensure that women can get the care they need to stay in the labor force and sustain their professional careers.44

Impacted value levers: Revenue

SABMiller In South Africa, SABMiller faced operational risks related to water quality concerns. The company undertook a “beyond the breweries” approach and adopted a localized solution by involving local communities and other stakeholders. This has helped the company reduce close to 23 billion litres of water compared to the water usage in the breweries in 2008.45

Impacted value lever: Cost, Risk, Brand

Total Total is undertaking initiatives to diversify its oil and gas business and grow its renewable capabilities. The company is investing $223 million to transform its unprofitable LeMede oil refinery into a bio-fuel plant. It is also planning to invest $500 million annually in developing renewable energy capabilities.46

Impacted value levers: Revenue, Risk, Brand

Sun Edison Sun Edison is partnering with Rockefeller Foundation to set up more than 100 off-grid solar energy plants in rural India. The initiative is creating shared value by bringing economic opportunity to villagers through the use of clean electricity while creating a new customer base for the company.47

Impacted value levers: Revenue

Google Google has recently launched an initiative (called Sidewalk Labs) that will leverage technology and innovation to improve urban life. The initiative seeks to improve city life by incubating urban technologies to address such issues as cost of living, energy usage and transportation.48

Impacted value levers: Brand, Revenue

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Organization Action/Initiative SDG Aligned

ITC Limited ITC, a leading Indian based diversified conglomerate launched its “e-Choupal” initiative, which provides internet access to rural farmers to help them make more informed business decisions. The effort allowed ITC to better manage its up-stream supply chain while improving farmers’ quality of life.49

Impacted value levers: Revenue, Cost

E.ON E.ON is creating an integrated energy infrastructure for a whole city district in Malmo, Sweden. As part of this collaboration, it will supply electricity exclusively by renewable sources. It is also helping lay communication channels looping all systems to minimize energy losses and meet high demands.50

Impacted value levers: Revenue

Michelin Michelin has created an innovative business model to recycle tires close to the end of their useful life. By offering tires as an extended service, it is not only creating additional revenue but also promoting road safety (as customers are likely to return old or unsafe tires) and facilitating better resource usage.51

Impacted value levers: Revenue, Cost, Brand

Tesla Motors Tesla Motors’ innovative electric car is designed for zero emissions. The electric car requires only 40amps for charging, which is equivalent to using an oven. The innovative product launch has helped the company build its brand image as well grow revenues, while ensuing positive climate impact.52

Impacted value levers: Revenue, Brand

Tesco Tesco adopted a sustainable seafood policy based on recommendations from the Marine Stewardship Council. The company is also building a system to evaluate the sustainability quotient of its fisheries. In addition to improving its brand, these initiatives could help Tesco generate demand for new fish species farmed sustainably.53

Impacted value levers: Revenue, Brand

Weyerhaeuser Weyerhaeuser has been actively pushing the sustainable forest management agenda with more than 198,000 acres of land subscribing to third-party sustainable forestry standards. The company is actively ensuring that all its forests and timberland have appropriate forest certification.54

Impacted value levers: Revenue, Brand

Nestlé In Sri Lanka, the 30-year war ending in 2009, left a significantly underdeveloped dairy industry in the Northern and Eastern provinces. By accelerating its dairy development efforts in 2009 and increasing its fresh milk collection, Nestle-Lanka enabled the resettlement of war-displaced people and provided livelihood to 18,000 rural farmers.55

Impacted value levers: Revenue

MasterCard MasterCard Aid Network, an end-to-end technology solution co-created with humanitarian organizations, can distribute aid swiftly and safely even in the absence of connectivity. The solution has helped 15,000 people in Yemen and 9,000 in Philippines receive aid through programs managed by World Vision.56

Impacted value levers for partners: Brand

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Implementation enablers

Physical infrastructure

Digital infrastructure

Financing and investments

Partnership models

Data and accountability

Brief overview Required to upgrade / expand capacity and add the appropriate infrastructure to support the needs of a growing population

In today’s age of the “Internet of Things (IoT)”, a strong digital infrastructure is needed to build efficiency and eliminate redundancies in an increasingly complex technology ecosystem

The envisaged global scale of implementation will necessitate going beyond aid-flows to identify sustainable funding sources

For the SDGs to deliver inclusive, scalable and sustainable impact, innovative partnership models that leverage assets across multiple sectors and actors will be critical

Data will be critical to providing timely information for decision-making and relevant inputs to measure progress and accountability

Key enablers

Through our in-depth analysis of the Global Goals we have identified five key implementation enablers (see Figure 8).

Given the 17 SDGs’ breadth of coverage and envisaged scale of implementation, a variety of critical enablers will be needed to help companies achieve their goals. The nature of enablers required may vary depending on the nature of the goal. For instance, capacity expansion and infrastructure investments may be needed to meet targets related to sustainable cities or clean energy. Or a goal related to eliminating poverty may require innovative partnership models (often with local NGOs), which are critical to scaling and reaching masses at the base of the pyramid.

Figure 8: Key enablers for Sustainable Development Goals implementation

$

15

Physical infrastructure

As highlighted earlier, at the current rate of increasing resource consumption, we will need three planets by 2050 to meet demand— which is clearly not possible. Thus, a massive drive is needed to expand the capacity and resiliency of our physical infrastructure. For example, as part of Goal 11 (Sustainable Cities and Communities), we will have to accommodate 2.5 billion new urban dwellers by 2050.57

Digital infrastructure

A digital infrastructure is expected to play a key role in enabling responsible growth in the coming years and to realize targets laid out within the SDG framework. Furthermore, the effective use of digital solutions could significantly help decouple national growth—especially those in emerging and developing markets—from the use of finite and constrained natural resources.

Financing and investments

One of the fundamental ways in which SDGs differ from MDGs is that these new goals require sustainable funding sources to achieve the ambitious targets set for the 2015-2030 timeframe. The investments are needed to support all goals, including quality R&D for innovation, massive capital investments for infrastructure capacity and expansion, testing and scaling of proven solutions, and financing of new adaptation techniques. According to some estimates, as much as $4.5 trillion per annum is needed to meet these targets, which compared with current investment levels, leaves a gap of around $3.1 trillion to be filled.58

Partnership models

The SDGs are diverse and require action at scale across all countries. General consensus among experts is that the magnitude and scale of impact envisaged mandate a collaborative approach, one that extends beyond traditional development institutions and north-south, donor-recipient paradigms. The implementation of SDGs by 2030 requires a multi-stakeholder approach based on “mutual accountability.”59 Participants include government (both national and sub-national), civil society, private sector, social entrepreneurs, academic institutions, multilateral institutions, faith-based communities, and citizens (especially youth).60 Businesses are increasingly working with local partners in form of development organizations and NGOs to utilize their valuable local knowledge and expertise to deliver on the development goals.

Data and accountability

Data-driven decision making has been a hallmark of successful companies for decades. As near-real-time data and analytics tools become increasingly available, more business decisions—especially those that involve long-term or socially driven investments—will require reliable information with a clear return on investment.

At the same time, data will be critical to measuring the success and progress of investments that provide both an economic and social or environmental return. Availability of quality, relevant and timely data—especially related to new consumer classes and emerging markets—will become increasingly important to leading companies looking to leverage the SDGs as a framework for growth.

$

16

Some companies will naturally align with one or two goals, maybe even a handful of them. Others may touch all 17, and still others may choose to leverage non-aligned goals (or their underlying business opportunities) to move into new markets or create new businesses. The key is that this is not an all-or-nothing scenario. Whether a company is inventing new widgets, producing goods, selling products or delivering services, the SDGs provide a universal framework for all businesses to both play their part as global actors, as well as create new opportunities for growth and competitiveness. By addressing the key challenges outlined by the SDGs, businesses can partner with governments to enable them to better structure their critical investments and implementation approach in order to drive future prosperity and development.

The examples above are just a handful of how leading companies are already leveraging the SDG goals to create business value in the form of revenue generation, cost reduction, risk mitigation, and brand enhancement.

In the remainder of this report, we look at each of the 17 goals in more detail—highlighting key global trends impacting the goal, presenting some suggestions for translating challenges into opportunities, discussing key enablers, and showcasing examples of how businesses are leading today.

The detailed chapters that follow in the remainder of this report provide an in-depth view on each of the 17 goals and examples of how leading companies are making their mark. The full report can be found at www.accenture.com/corporatedisruptors.

From responsibility to opportunityThe Sustainable Development Goals represent by far the greatest development agenda the international community has ever signed up for. The overarching objective behind the SDGs may have been to drive positive social and environmental impact. However, the SDGs can also serve as an important framework for businesses to grow and become more competitive, especially in an increasingly volatile, complex and uncertain world.

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1 United Nations Development Programme, “Summary: Human Development Report 2013”, 2013, http://hdr.undp.org/sites/default/files/hdr2013_en_summary.pdf

2 Population Division, Department of Economic and Social Affairs, United Nations, “Population Facts No. 2014/3”, August 2014, http://www.un.org/en/development/desa/population/publications/pdf/popfacts/PopFacts_2014-3.pdf

3 Population Division, Department of Economic and Social Affairs, United Nations, “World Population Prospects: The 2015 Revision”, 2015, http://esa.un.org/unpd/wpp/DataQuery/ (Raw data acquired via website)

4 United Nations Children’s Fund, “The State of World’s Children 2012: Children in an Urban World”, February 2012, http://www.unicef.org/sowc2012/urbanmap/ (Raw data acquired via website)

5 Reuters, “The Swelling Middle”, 2012, http://www.reuters.com/middle-class-infographic, accessed January 7, 2016

6 Population Division, Department of Economic and Social Affairs, United Nations, “World Population Prospects: The 2015 Revision”, 2015, http://esa.un.org/unpd/wpp/publications/files/key_findings_wpp_2015.pdf

7 Julika Erfurt, Athena Peppes and Mark Purdy, Institute for High Performance, Accenture, “The Seven Myths of Population Aging: How Companies and Governments Can Turn the “Silver Economy” into an Advantage”, February 2012, https://ec.europa.eu/research/innovation-union/pdf/active-healthy-ageing/accenture.pdf

8 Population Division, Department of Economic and Social Affairs, United Nations, “World Population Prospects: The 2015 Revision”, 2015, http://esa.un.org/unpd/wpp/publications/files/key_findings_wpp_2015.pdf

9 Ibid

10 Ibid

11 Ibid

12 Ibid

13 Ibid

14 Ibid

15 Accenture and Oracle, “The Future of HR: Five Technology Imperatives”, 2014, https://www.accenture.com/in-en/~/media/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Digital_1/Accenture-Oracle-HCM-eBook-Future-of-HR-Five-Technology-Imperatives.pdf

16 United Nations Global Compact, Accenture and HAVAS Media, “The Consumer Study: From Marketing to Mattering”, June 2014, https://www.accenture.com/t20150523T022414__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Dualpub_1/Accenture-Consumer-Study-Marketing-Mattering.pdf

17 Ibid

18 Population Division, Department of Economic and Social Affairs, United Nations, “World Population Prospects: The 2015 Revision”, 2015, http://esa.un.org/unpd/wpp/Download/Probabilistic/Population/ (Raw data acquired via website)

19 TRACEONE, “TRACE ONE’s survey links supply chain transparency with consumer buying behavior”, January 2015, http://www.traceone.com/en/news/trace-ones-survey-links-supply-chain-transparency-with-consumer-buying-behavior-3-2-2-2/, accessed January 7, 2016

20 United Nations Global Compact and Accenture, “The UN Global Compact-Accenture CEO Study on Sustainability 2013: Architects of a Better World”, September 2013, https://acnprod.accenture.com/~/media/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Strategy_5/Accenture-UN-Global-Compact-Acn-CEO-Study-Sustainability-2013.pdf

21 Edelman, “Executive Summary: 2015 Edelman Trust Barometer”, 2015, http://www.edelman.com/insights/intellectual-property/2015-edelman-trust-barometer/trust-and-innovation-edelman-trust-barometer/executive-summary/, accessed January 7, 2016

22 Global e-Sustainability Initiative and Accenture, “#SMARTer2030: ICT Solutions for 21st Century Challenges”, 2015, http://smarter2030.gesi.org/downloads/Full_report.pdf

23 Ibid

24 Ibid

25 David Sovie and John Curran, Accenture, “2015 Accenture Digital Consumer Survey: Engaging the Digital Consumer in the New Connected World”, 2015, https://www.accenture.com/t20150523T033024__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Dualpub_7/Accenture-Engaging-Digital-Consumer-New-Connected-World.pdf

26 Truste, “2014 UK Consumer Data Privacy Survey: Consumer Privacy Edition”, 2014, https://www.truste.com/resources/privacy-research/uk-consumer-confidence-index-2014/, accessed January 7, 2016

27 Truste, “2015 US Consumer Confidence Index”, 2015, https://www.truste.com/resources/privacy-research/us-consumer-confidence-index-2015/, accessed January 7, 2016

28 Peter Lacy, Justin Keeble and Robert McNamara, Accenture, “Circular Advantage: Innovative Business Models and Technologies to Create Value in a World without Limits to Growth”, 2014, https://thecirculars.org/documents/Accenture%20Circular%20Advantage%20Web%20Single.pdf

29 Ibid

30 Ibid

31 The Conference Board, “Total Economy Database – Key Findings”, January 2014, http://www.conference-board.org/data/economydatabase/, accessed January 7, 2016

32 The World Bank, “World Bank Commodity Price Data”, December 2014, http://databullet.in/15433/world-bank-commodity-price-data-pink-sheet-december-2014, accessed January 7, 2016

33 IndexMundi, “Commodity Prices”, http://www.indexmundi.com/commodities, accessed January 7, 2016

34 Ibid

35 Sustainable Europe Research Institute and Vienna University of Economics and Business, “Global Material Flow Database”, 2014, http://www.materialflows.net/, accessed January 7, 2016

36 World Bank, “World Bank DataBank”, 2014, http://data.worldbank.org/indicator/NY.GDP.PCAP.CD, accessed January 7, 2016 (Raw data acquired via website)

37 Global e-Sustainability Initiative and Accenture, “#SMARTer2030: ICT Solutions for 21st Century Challenges”, 2015, http://smarter2030.gesi.org/downloads/Full_report.pdf

38 Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, IPCC, “Summary for Policymakers. In: Climate Change 2013: The Physical Science Basis”, 2013, http://www.climatechange2013.org/images/report/WG1AR5_SPM_FINAL.pdf

39 United Nations, “Secretary-General’s remarks at Special Event on Achieving the Millennium Development Goals”, September 25, 2013, http://www.un.org/sg/statements/index.asp?nid=7125, accessed January 7, 2016 (Excerpt from speech)

40 George C. Lodge, Harvard Business School, “Using Big Business to Fight Poverty”, http://hbswk.hbs.edu/item/using-big-business-to-fight-poverty, accessed January 7, 2016

41 World Food Programme, “Here’s to Ten Years of WFP and TNT!”, 2012, https://www.wfp.org/blog/blog/celebrating-ten-years-wfp-and-tnt, accessed January 7, 2016

42 Unilever, “Lifebuoy Way of Life: Social Mission Report 2010-2012”, https://www.unilever.com/Images/lifebuoy-way-of-life_2010-12-oct12_tcm13-355913_tcm244-409755_en.pdf

43 United Nations Educational, Scientific, and Cultural Organization, United Nations Children’s Fund, United Nations Global Compact, United Nations Special Envoy for Global Education, “The Smartest Investment: A Framework For Business Engagement In Education”, 2013, http://businessbackseducation.org/wp-content/uploads/2014/05/Business-Backs-Education-Framework.pdf

44 Care.com, “Company Overview, http://www.care.com/company-overview, accessed January 7, 2016

45 SABMiller, “Using less water to brew our beer”, 2014, http://www.sabmiller.com/home/stories/using-less-water-to-brew-our-beer, accessed January 7, 2016

46 Total, “A New Energy Future with Solar Energy”, http://www.total.com/sites/default/files/atoms/file/total-solar-power-investing-technology-bright-future, accessed January 7, 2016

47 Smart Power India, Smart Power for Rural Development – The Initiative, http://www.smartpowerindia.org/the-initiative/, accessed January 7, 2016

48 Smithsonian.com, July 27, 2015, “What’s the Deal With Google’s Sidewalk Labs?”, http://www.smithsonianmag.com/innovation/whats-deal-googles-sidewalk-labs-180955847/#G6Eis7u854gfABbV.99, accessed January 7, 2016

49 The Economic Times, July 25, 2012, “ITC’s e-choupal boosting company’s FMCG business”, http://articles.economictimes.indiatimes.com/2012-07-25/news/32848625_1_fmcg-business-e-choupal-network-fiama-di-wills, accessed January 7, 2016

50 E.ON, “Potential in integrated energy distribution”, http://www.eon.com/en/sustainability/environment/technology-development/infrastructure.html, accessed January 7, 2016

51 Michelin, “Michelin’s Fleet Solutions”, http://www.michelintruck.com/services-and-programs/michelin-fleet-solutions/, accessed January 7, 2016

52 Tesla Motors, “About Tesla: Tesla’s mission is to accelerate the world’s transition to sustainable transport”, https://www.teslamotors.com/about, accessed January 7, 2016

53 Tesco, “Responsible fish sourcing”, http://realfood.tesco.com/our-food/sustainable-fish-sourcing.html, accessed January 7, 2016

54 Weyerhaeuser, “Our Approach: Sustainability is how we do business”, http://www.weyerhaeuser.com/sustainability/our-commitment/our-approach/, accessed January 7, 2016

55 Nestlé, “Milk: Nestlé Empowering Sri Lankan Dairy Farmers”, http://www.nestle.lk/en/csv/ruraldevelopment/milk, accessed January 7, 2016

56 MasterCard, “MasterCard Transforms Aid Distribution”, http://newsroom.mastercard.com/press-releases/mastercard-transforms-aid-distribution/, accessed January 7, 2016

57 Population Division, Department of Economic and Social Affairs, United Nations, “World Urbanization Prospects: The 2014 Revision”, 2014, http://esa.un.org/unpd/wup/highlights/wup2014-highlights.pdf

58 “Organisation for Economic Co-operation and Development and World Economic Forum” Blended Finance Vol. 1: A Primer for Development Finance and Philanthropic Funders”, 2015, http://www3.weforum.org/docs/WEF_Blended_Finance_A_Primer_Development_Finance_Philanthropic_Funders_report_2015.pdf

59 Initiative Incubator, “Why do we need the Global SDG partnership”, http://www.globaldevincubator.org/current-initiatives/global-sdgs/, accessed January 7, 2016

60 Global Development Incubator, “Global SDG Partnership: Joining Forces to End Extreme Poverty by 2030 - Concept Note”, February 19, 2014, http://www.globaldevincubator.org/wp-content/uploads/2014/04/Global-SDG-Partnership-Concept-Note.pdf

Executive summary endnotes

18

Detailed chapters

$ $ $ $ $$ $ $ $ $

Untapped customer base o�ers business potential in terms of demand and low-cost production

Poverty reduction requires e�cient labor use, inclusive growth and access to equal rights

What does this mean for businesses?

Partner with industry players to develop and deliver the right kind of products

Develop products and services customized for the poor through innovation

Businesses need to focus on collaboratively designing manufacturing and processes to customize products to meet the needs of the poor

Nestle has rolled out a Women Dairy Development Program in a village in India to provide livelihood for women, improve the economic scenario and secure its supply chain in a fragmented dairy market.

people live on less than $1.90 a day

1in10 in infrastructure investment is required for inclusive growth in Asia from 2010 to 2020

$8trn

WIDESPREAD DISPLACEMENT

42,000 people per day abandoned their homes due to conflict in 2014

EXTREME POVERTY IN THE WORLD NEED FOR BALANCED GROWTH

UNTAPPED CUSTOMER BASE LOW-COST PRODUCTION

No poverty

50% of global vehicle production capacity will come from developing markets by 2050

20% of the population in developing countries lives below poverty line

20Data and figures collected as part of secondary research conducted by Accenture Strategy

All references and additional details can be found at the end of this chapter on page 26

21

No poverty

Minimal policy interventionPoverty reduction is at the core of policy-making for developing countries and a key commitment for multilateral agencies. Combating poverty requires creating more opportunities for broader parts of the population, assembling the right infrastructure, facilitating empowerment and ensuring security at both the local and national levels. Countries that have been most successful in attacking poverty have encouraged policies that enable efficient use of labour and have simultaneously invested in building the human capital of the poor.

• Around one in ten people in developing regions still lives on less than $1.90 per day1

• Poverty rate is expected to slide to 4.9 percent by 20302

Lack of inclusive economic growthIn most developing countries, people living in poverty represent a significant customer base. Engaging them in economic progress could have a significant, positive impact on the economy. Improving their incomes and standards of living will go hand in hand with the economic growth of the country. A business environment conducive to private investment and technological innovation is critical for rapid and inclusive growth.

• $8 trillion investment is required from 2010 to 2020 to support infrastructure for promoting inclusive growth in Asia3

Equal rights and access to opportunityPoverty cannot be displaced in the absence of human rights. Various Human Development Reports clearly state that a decent standard of living, adequate nutrition, health care, education and decent work and protection against calamities are not just development goals, but are also essential human rights. Parity in distribution of rights and freedom is vital for the success of any economy. Poor should be given the right opportunities at the right time to fulfill their potential. Access to security, especially in conflict-prone regions, for reducing their vulnerability to risks as ill health, economic shocks and natural disasters is also essential. Both the public and private sector has started collaborating to create this equal rights ecosystem for the poor.

• 42,000 people had to abandon their homes to seek protection due to conflict on a daily basis in 20144

Many people associate “eradicating poverty” with boosting income levels. But it’s much more than that. It also involves eliminating malnutrition, providing access to resources, abolishing discrimination, building capacity and enhancing overall quality of life. Effective poverty-reduction strategies make poor households less vulnerable by easing income volatility, providing the means to self-sustained livelihoods, and strengthening market conditions. However, despite sustained efforts, the gap between the rich and the poor across the globe remains substantial and, unfortunately, continues to grow. As they consider addressing the poverty agenda, companies should be mindful of three key trends.

Ensure significant mobilization of

resources

Build resilience of the poor

Promote rights to economic resources

Create sound policy framework

Reduce or eradicate poverty

Illustrative value creation opportunities

SDG target areas

Roll out products customized for the poor

• Invest in frugal innovation customized to the requirements of the under privileged

• Deliver services that build the brand and customer base among the poor

Develop products to cater to the needs of the poor

Collaborate with cross-industry players

• Partner with industry peers and intermediaries to o�er the right kind of products and services to the poor at the right price

• Establish delivery mechanisms through partnerships to o�er resources such as education, financial products etc.

Create partnerships and linkages across di�erent players to build the right eco-system to alleviate poverty

22

Turning challenges and trends into opportunitiesNewly launched SDG goals and potential value opportunities present a strong business case for the private sector to invest in poverty reduction programs.

Figure 9: SDG target areas and value creation opportunities

Detailed targets for the no poverty goal is provided at the end of this chapter on page 27

23

Consumer goodsApproximately 702 million people were estimated to be living in extreme poverty in 2015 and struggling to make ends meet.5 Considering the population explosion in these regions, the number of people in this category is significant and can translate into a substantial customer base for consumer goods companies. To tap this potential consumer base, such companies need to innovate to offer the right products at the right prices. They also need to build the brand among these customers to foster loyalty.

Many companies in the consumer goods space have rolled out initiatives to build their brand among these customers, with a primary objective of addressing the poverty challenge. This directly benefits their business, because higher incomes among the poor will lead to increased probability of purchasing companies’ goods. Additionally, by focusing on creating strong communities to support growth (by, for instance, setting up schools, medical clinics, and training programs to educate farmers), companies can expect to secure their supply chain through increased resource access in the long term.

Creating women centric dairy programs to alleviate povertyNestle has rolled out a Women Dairy Development Program in Moga village in Punjab, India to provide livelihood for women in that region, improve the economic scenario and secure its supply chain in a fragmented diary market.

• Created employment opportunities for various stakeholders ranging from veterinarians, agronomists to dairy farmers

• Provided veterinary services free of cost and medicines at wholesale cost and this cost is adjusted against milk payments made to farmers

• Invested $10.8 million to install cooling tanks and chillers and another $6.5 million to procure goods on behalf of farmers

• Sourced better quality milk directly from farmers than procuring through other sources

Value delivered

• Increased revenue potential by establishing brand name among the poor

• Secured supply chain and avoided future price inflation and volatility in procurement

Key enablers

• Physical infrastructure in form chillers and cooling centers to store milk

• Partnerships with relevant stakeholders such as veterinarians and agronomists

Physical infrastructure

Partnership models

Role of business and key playersBusinesses are critical to alleviating poverty. Various companies from multiple sectors are targeting opportunities in this area:

Source: https://www.nestle.in/csv/case-studies/villagewomendairy (accessed January 7, 2016)

24

AutomotiveThe automotive industry has clearly demonstrated it has the potential to lift regions from poverty. Setting up an automotive or auto-parts manufacturing plant at a location creates jobs and supports other basic public services such as education and healthcare. The skill sets needed for employment at an automotive manufacturing plant can be easily developed through training programs and, hence, are attractive to local communities with minimal education and training. Detroit is a clear example where automotive companies transformed the poverty-ridden city into a major economic hub in the late 1900s.

Figure 10: Automotive vehicle production share6

50% of global vehicle production share will come from emerging markets by 2050

Increase Revenues

Reduce Costs

Drive major reductions in operational costs by

producing remanufactured auto components in production

In addition to setting up plants, businesses are extensively working to roll out initiatives to improve the livelihood of local employees in the form of schools, day care centres, and medical camps. Unions have also been created to support employees’ economic welfare and wellbeing.

Develop a new capability and enhanced portfolio of products

beyond traditional use and consumer business model

Setting up an automobile production facility in Brazil’s poverty-stricken northeastDaimlerBenz in Brazil partnered with POEMA, a local antipoverty program in Belem, to construct a modern, high-tech factory that would make headrests and seats out of coconut fibres from locally grown trees. Around 5200 people were employed in this factory improving their livelihood and overall economic development.

Value delivered

• Generated new revenue streams by manufacturing premium products from organic material

• Reduced operational costs by locally souring labour and materials

Key enablers

• Physical infrastructure in form of facilities to manufacture headrests and seats

• Partnership with POEMA to set up the facility in Brazil

• Investments and financing to support the setup of the facility

Physical infrastructure

Financing and investments

Partnership models

$

Source: http://hbswk.hbs.edu/item/using- big-business-to-fight-poverty (accessed January 7, 2016)

25

SummaryIt’s well established that eradicating poverty in all its forms has societal as well as positive business implications. Businesses can focus on certain key areas to eradicate poverty in developing and underdeveloped countries. They can fulfill the poor’s need for employment while serving the people at the bottom of the pyramid with products and services that will elevate their standard of living.

Figure 11: Illustrative value creation opportunities for reducing poverty

Roll out products customized for the poor

Collaborate with cross-industry players

• Invest in frugal innovation customised to the need of the underprivileged

• Delivering services that enhance the brand image

Intel’s micro-processor manufacturing plant in Costa Rica created a flush of jobs transforming the economic scenario of the poor in the country

• Setting up partnerships to deliver products and services

• Establish mechanisms to deliver the benefits of partnership

DaimlerChrysler partnered with an antipoverty agency in Brazil to set up a plant that helped alleviate poverty in the region

Value creation opportunities

26

Re-design manufacturing processes and supply chains to produce products that suit the requirements of the poor

Utilize digital technologies to help scale up the sale of products and deliver technology based tools to enhance their quality of life

Drive investments in technologies and capabilities to build the skillsets of the poor and also in physical infrastructure in poverty struck areas

Create cross sector partnerships and tie-ups with anti-poverty agencies or industry peers with similar agenda to reduce poverty

Enable data systems to monitor and track the change in economic status of poor rolling out initiatives

Enable all the technology requirements to drive the collaboration agenda

Make investments needed to drive the agenda established through collaboration

Build partnership for knowledge sharing and leveraging best practises to spearhead the poverty agenda

Utilise data to search for prospect partners with complimentary skillsets to help the poverty cause

Enabling ecosystem required for implementation

Figure 12: Illustrative enablers required to drive value creation while addressing the poverty challenge

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Critical and Short TermScale and Long Term

Roll out products customized for the poor

Collaborate with cross-industry players

Chapter endnotes1 Worldbank, “World Bank Forecasts Global

Poverty to Fall Below 10% for First Time; Major Hurdles Remain in Goal to End Poverty by 2030”, October 4, 2015, http://www.worldbank.org/en/news/press-release/2015/10/04/world-bank-forecasts-global-poverty-to-fall-below-10-for-first-time-major-hurdles-remain-in-goal-to-end-poverty-by-2030

2 The World Bank, “Poverty will only End by 2030 if Growth is Shared”, November 19, 2014, http://blogs.worldbank.org/futuredevelopment/poverty-will-only-end-2030-if-growth-shared

3 Asian Development Bank, Infrastructure for Supporting Inclusive Growth and Poverty Reduction in Asia, 2012, http://www.adb.org/sites/default/files/publication/29823/infrastructure-supporting-inclusive-growth.pdf

4 United Nations, “The Millennium Development Goals Report 2015”, 2015, http://www.un.org/millenniumgoals/2015_MDG_Report/pdf/MDG%202015%20rev%20(July%201).pdf

5 The Guardian, ”World Bank: ‘extreme poverty’ to fall below 10% of world population for first time”, October 4, 2015, http://www.theguardian.com/society/2015/oct/05/world-bank-extreme-poverty-to-fall-below-10-of-world-population-for-first-time, accessed January 7, 2016

6 IHS, “HS forecasts that by 2020 emerging markets such as China, Brazil, Eastern Europe, Middle East and South America will represent over 50% of global vehicle capacity share”, January 23, 2014, http://press.ihs.com/press-release/automotive/ihs-forecasts-2020-emerging-markets-such-china-brazil-eastern-europe-middle, accessed January 7, 2016

$

27

• By 2030, eradicate extreme poverty for all people everywhere, currently measured as people living on less than $1.25 a day

• By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions

• Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable

• By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of 13 property, inheritance, natural resources, appropriate new technology and financial services, including microfinance

• By 2030, build the resilience of the poor and those in vulnerable situations and reduce their exposure and vulnerability to climate-related extreme events and other economic, social and environmental shocks and disasters

• Ensure significant mobilization of resources from a variety of sources, including through enhanced development cooperation, in order to provide adequate and predictable means for developing countries, in particular least developed countries, to implement programmes and policies to end poverty in all its dimensions

• Create sound policy frameworks at the national, regional and international levels, based on pro-poor and gender-sensitive development strategies, to support accelerated investment in poverty eradication actions

No poverty

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/poverty/

Malnutrition and food security are the biggest challenges to meeting the goal of Zero Hunger

Develop and make accessible high-nutrition food items

 

Partner to set up a robust distribution channel

 

Develop and roll out farming practices that improve productivity

Businesses may need to focus on and invest in research and distribution infrastructure and develop global and local-level partnerships for scale and reach

Unilever has ensured that more than 20% of its total food and beverage (sales by volume) products have a significant content per serving of the five key micronutrients implicated in undernutrition.

people across the world are undernourished increase in output is required by 2050 to feed the world’s population

70%

$62.9 bnPotential market size of organic fruits and vegetables by 2020

UNDERNOURISHMENT AGRICULTURAL OUTPUT

24% up to 40% Food loss that can be avoided in developing countries through an adequate distribution network

Zero hunger

795mn

What does this mean for businesses?

29Data and figures collected as part of secondary research conducted by Accenture Strategy All references and additional details can be found at the end of this chapter on page 35

30

Zero hunger

Persistent lack of food securityAgriculture remains the largest employment sector in most developing countries. Nonetheless, food security remains a significant challenge. According to FAO statistics, developing economies account for around 780 million (out of total 795 million) undernourished people in the world, i.e. around 98 percent of undernourished people live in developing countries.2 A significant impact of hunger is malnutrition, which may lead to fatal deficiency diseases. Malnutrition is an underlying cause of death of 2.6 million children each year – a third of child deaths globally.3 The challenge of food shortage is expected to intensify going forward. In fact, agricultural output may need to increase by 70 percent by 2050 to feed the world’s population.4

Growing need for sustainable agriculture It is estimated that production of crops and animal products releases around 13 percent of the global GHG emissions, which is around 6.5 gigatonnes of CO2e annually.5 This could grow to 9.5 gigatonnes of CO2e annually by 2050. Interestingly, to hold global warming to below 2 degree Celsius, global GHG emissions (from all sources) would need to drop to around 22 gigatonnes of CO2e annually by 2050.6 This further exacerbates the challenge of meeting growing need for food: Going forward, agriculture needs to produce significantly more while improving productivity and reducing emissions.

Unprecedented economic growth has resulted in enhanced quality of life for billions of people around the world. However, nearly 795 million people across the world are still undernourished.¹ The Zero Hunger goal commits the international community to initiate interventions that abolish hunger and malnutrition completely by 2030, enabling people of all ages to access safe, nutritious and sufficient food. Two initiatives are especially key to achieving this goal: ensuring consistent access to nutritious foods and reducing negative environmental impacts of agricultural methods practiced today.

Increase investment through international

co-operation

Ensure sustainable food production

systems

Double agricultural productivity

Correct trade restrictions and distortions in

agricultural markets

End all forms of malnutrition

Illustrative value creation opportunities

Develop nutritious and a�ordable food products

• Manufacture and sell food items with high energy and calorie content to the poor• Build mechanisms to increase access to health products

O�er food products rich in nutrients to end malnutrition

Enhance food access to BOP segment

• Work with cross-sector players to build a robust distribution channel to reach the last mile• Partner with organizations such as the World Food Program to support in times of emergencies

Set up an eco-system to combat hunger through improved access

Increase agricultural production through sustainable farming practices

• Partner with industry peers and research institutions to identify new methods and processes to increase agricultural productivity• Develop methods and processes to produce more from less• Roll out engagement programs to help farmers adopt innovation in agriculture

Drive innovation to increase the agricultural production and yield

SDG target areas

31

Turning challenges and trends into opportunities

Figure 13: Key SDG target areas and value creation opportunities

Detailed targets for the zero hunger goal is provided at the end of this chapter on page 36

32

Consumer goodsConsumer goods companies have played a significant role in addressing the challenge of food security and malnutrition. Two such prominent programs are Project Laser Beam (a global public-private partnership to address child under-nutrition) and Together for Child Vitality (Unilever’s partnership with the World Food Program to improve the nutrition and health of poor school-aged children).

Businesses have also rolled out products fortified with the right nutrition ingredients targeted primarily at women and children to help address malnutrition. In fact, the global market size of organic fruits and vegetables is projected to reach $62.97 billion by 2020, representing a CAGR of 9.4 percent from 2015.7

Combating under-nutrition through special focus on fortification in food products More than 20 percent of Unilever’s total food and beverage (sales by volume) have a significant content per serving of the five key micronutrients implicated in undernutrition (iodine, vitamin A, vitamin D, zinc and iron. Among all its products, Knorr has seen the maximum success through its fortified products.

• In 2013, Knorr launched seasoning granule fortified with Vitamin A targeted at mothers and children

• In 2014, over 100 billion servings of Vitamin D fortified spreads and cooking products were sold

• 13 billion servings of salt fortified with iodine was sold in 2014 in India alone

• Other brands such as Rama and Blue Band were also fortified with Vitamins A and D

Value delivered

• Increased revenue potential by selling nutritious products targeted at poor people

• Improved brand through producing products and promoting programs that help eradicate hunger

Key enablers

• Physical infrastructure in form of equipment to fortify products

• Partnerships with relevant stakeholders for promoting food programs

Physical infrastructure

Partnership models

Role of business and key playersBusinesses are critical to shaping the Zero Hunger agenda for the world. Companies from various sectors are already joining forces to target opportunities in this area.

Source: https://www.unilever.com/sustainable-living/the-sustainable-living-plan/improving-health-and-well-being/improving-nutrition/addressing-undernutrition/ (accessed January 7, 2016)

33

LogisticsAn important factor in the increased incidence of hunger is the challenge of access to food. Often, last-mile connectivity prevents organizations to effectively reach the base of the pyramid population. Logistics and delivery companies play an important role in addressing this challenge and ensuring robust distribution.

Increasingly, businesses have changed their processes to optimize the supply chain and enable a more efficient delivery mechanism to reach parts of the world that historically have not been accessible. However, even today fruit and vegetable losses due to inadequate distribution infrastructure are estimated at 24 percent to 40 percent in developing countries.8

Logistics companies have a significant opportunity to help address the challenge of losses during transit. Additionally, during emergencies such as earthquakes, hurricanes, and other disasters, businesses can play a role in establishing the food aid chain to those affected regions in partnership with international organizations, governments and other private sector players.

Reinventing the food aid supply chain to combat hunger The UN has partnered with TNT to enable improved responsiveness to emergencies over the last 10 years. TNT employees have participated in 114 specialist assignments to support a more efficient aid delivery mechanism through transport optimization, fleet and warehouse management etc.

• Designed an efficient supply chain management system for bread delivery in Egypt

• Responded to more than 30 emergencies in the form of airlifts to deliver food parcels, including the Tsunami in Asia in 2004, the Pakistan earthquake of 2005 and the 2010 earthquake in Haiti

• Redesigned supply chain to improve food aid logistics in countries such as Liberia

Value delivered

• Increased revenue by building new supply chains to support food aid

• Improved brand value by providing support during emergencies

Key enablers

• Partnerships with relevant stakeholders to design supply chain solutions for food aid

• Rolling out the required investment to support and roll out of new logistics mechanisms

Financing and investments

Partnership models

$

Source: https://www.wfp.org/blog/blog/celebrating-ten-years-wfp-and-tnt (accessed January 7, 2016)

34

SummaryExtreme hunger and malnutrition remain a barrier to development in many countries. The private sector can address this basic human need while creating value in the form of enhanced or new revenues streams (for example, from serving new customer segments, introducing new products, or minimizing transit losses).

Figure 14: Illustrative value creation opportunities for eradicating hunger and enabling access to food

Value creation opportunities

Develop nutritious and economical food products

Enhance food access to BOP segment

Increase agricultural production through sustainable farming

practices

• Produce a range of fortified products• Promote the sale and distribution

of these nutritious products in the hunger struck regions

20 percent of Unilever’s food and beverages products have a significant content of the five key micronutrients implicated in undernutrition

• Build mechanisms to ensure food is made available at the right place at the right time

• Fortify the supply chain to support food aid during emergencies

TMT has partnered with WFP for the past 10 years and have redesigned and optimised the supply chain to fight hunger and support food aid programs

• Foster innovation in the agricultural sector

• Invest in infrastructure that helps produce more from less

Syngenta has set up the Syngenta Foundation for Sustainable Agriculture to promote and cultivate innovation in the agriculture sector

¢

35

Enabling ecosystem required for implementation

Figure 15: Illustrative enablers required to drive value creation while addressing hunger challenge

Install new machinery and manufacturing processes to fortify products with nutrition

Drive investments in installing and upgrading equipment for fortification

Set up logistics fleet to access remote areas and deliver food and other requisites

Leverage technology to build systems that strengthens the food supply chain

Invest in scaling up the identified technologies to other poverty ridden areas

Collaborate with partners and global food alliances to ensure food distribution to the right place and the right time

Enable data systems to monitor the long term success of the initiatives

Set up infrastructure like latest technology and machinery needed for promoting sustainable agriculture

Invest in R&D and technology for identifying new and improved methods for agriculture

Build partnerships with local agri-bodies to educate farmers on better farming techniques

Develop nutritious and economical food products

Enhance food access to BOP segment

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Increase agricultural production through sustainable farming

practices

Critical and Short TermScale and Long Term

$

Chapter endnotes1 Food and Agriculture Organization, United

Nations, International Fund for Agricultural Development and World Food Programme, “The State of Food Insecurity in the World, 2015”, 2015, http://www.fao.org/3/a4ef2d16-70a7-460a-a9ac-2a65a533269a/i4646e.pdf

2 Ibid

3 Gain, “Fast Facts About Malnutrition”, http://www.gainhealth.org/knowledge-centre/fast-facts-malnutrition/, accessed January 7, 2016

4 Food and Agriculture Organization, United Nations, “How to Feed the World in 2050“, http://www.fao.org/fileadmin/templates/wsfs/docs/expert_paper/How_to_Feed_the_World_in_2050.pdf

5 World Resources Institute, United Nations Environment Programme, United Nations United Nations Development Programme, “Creating a Sustainable Food Future: World Resources Report 2013–14, Interim Findings”, 2013, http://www.wri.org/sites/default/files/wri13_report_4c_wrr_online.pdf

6 Ibid

7 Research and Markets, “Organic Fruits and Vegetables Market by Crop, Form, End Use, Distribution Channel, & by Region - Global Trends & Forecasts to 2020”, November 2015, http://www.researchandmarkets.com/research/x68w5t/organic_fruits

8 Foodtank, “10 Facts You Might Not Know About Food Waste”, June 5, 2015, http://foodtank.com/news/2015/06/world-environment-day-10-facts-about-food-waste-from-bcfn

¢

36

• By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious and sufficient food all year round

• By 2030, end all forms of malnutrition, including achieving, by 2025, the internationally agreed targets on stunting and wasting in children under 5 years of age, and address the nutritional needs of adolescent girls, pregnant and lactating women and older persons

• By 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists and fishers, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets and opportunities for value addition and non-farm employment

• By 2030, ensure sustainable food production systems and implement resilient agricultural practices that increase productivity and production, that help maintain ecosystems, that strengthen capacity for adaptation to climate change, extreme weather, drought, flooding and other disasters and that progressively improve land and soil quality

• By 2020, maintain the genetic diversity of seeds, cultivated plants and farmed and domesticated animals and their related wild species, including through soundly managed and diversified seed and plant banks at the national, regional and international levels, and promote access to and fair and equitable sharing of benefits arising from the utilization of genetic resources and associated traditional knowledge, as internationally agreed

• Increase investment, including through enhanced international cooperation, in rural infrastructure, agricultural research and extension services, technology development and plant and livestock gene banks in order to enhance agricultural productive capacity in developing countries, in particular least developed countries

• Correct and prevent trade restrictions and distortions in world agricultural markets, including through the parallel elimination of all forms of agricultural export subsidies and all export measures with equivalent effect, in accordance with the mandate of the Doha Development Round

• Adopt measures to ensure the proper functioning of food commodity markets and their derivatives and facilitate timely access to market information, including on food reserves, in order to help limit extreme food price volatility

Zero hunger

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/hunger/

Enormous value creation potential by providing quality, a�ordable and easily accessible healthcare.

Access to primary healthcare and changing demographics are driving the global health and well-being development agenda

What does this mean for businesses?

$34 bn

Projected global telemedicine market by the end of 2020

$87.7 bn

Base-of-the-pyramid healthcare opportunity

 

8.9 mn

Potential access to skilled professionals across 107 countries

Businesses may need to invest in state-of-the-art infrastructure, identify the right partners and develop innovative operating models to realize this value

GlaxoSmithKline is re-investing 20% of its profits in the Least Developed Countries (LDCs) to develop the healthcare infrastructure by training frontline health workers.

of 1.8 bn youth aged 10 to 24 live in developing economies today

89%of the world's aging population (over 60) will live in developed countries by 2050

80%

CHILD MORTALITY

43 deaths per 1,000 births

(SDG target: 25)

GROWING YOUTH BULGE AGEING POPULATION

MATERNAL HEALTH

210 deaths per 100,000 births

(SDG target: 70)

Good health and well-being

38Data and figures collected as part of secondary research conducted by Accenture Strategy

All references and additional details can be found at the end of this chapter on page 46

39

Good health and well-being

Two-speed world – evolving demographic shiftsAs developed economies continue to mature and developing and emerging economies prosper, demographic profiles are shifting significantly across the world. These demographic shifts are causing an increased in health and well-being spending, especially among the youth and aging populations.

Increased total spending on health and wellnessFrom 2008-13, the total health and wellness spending in Asia, Latin America, the Middle East and Africa are growing at 9.5 percent, 7.5 percent and 9.3 percent, respectively, on an annual basis, which is significantly higher than in North America (4.5 percent) and West Europe (0.5 percent).3 An average growth of 5.3 percent a year in 2014-18 is expected globally; given population growth, the spending per head will rise by 4.5 percent a year.4

Figure 16: Two-speed world

Basic healthcare and well-being goals are still unmetDespite encouraging progress of the Millennium Development Goals, significant improvement is still required in basic healthcare and well-being goals:

• Infant Mortality: The under-five-years mortality rate has declined by more than half in the past 15 years, but it is still at 43 deaths per 1,000 live births compared to the new sustainable development goal of 25 deaths per 1,000 live births5

• Maternal Health: Maternal mortality has declined by 37 percent in the past 13 years, but it is still at 210 deaths per 100,000 live births, which is 3 times the sustainable development goal of 70 deaths per 100,000 live births6

• Communicable Diseases: In 2013 alone, more than 1.1 million people died of Tuberculosis, and there were more than 2.1 million new cases of HIV infections7

World’s growing aging (>60 year old) population

19%of the world population will be 60 years or older in 2050, with over 80% of these older people will be living in developing countries1

Emergence of the Global Youth(10 – 24 year old)

1.8 bn youthaged 10 to 24 in the world today with 89% of these youth are currently living in developing economies2

Promoting good health and well-being is a key focus around the world—not only in developing and emerging economies with a large and younger demographic, but also in developed economies where a growing proportion of the population is aging. The magnitude of the challenge to meet health and well-being targets will require businesses to sharpen their innovation capabilities to adapt their products and services to global markets, with a keen focus on those regions still struggling to meet basic healthcare and well-being goals.

Strengthen existing healthcare systems

Provide access to a�ordable

healthcare to all

Limit occurrence of pollution and substance abuse related diseases

Control regional and global epidemics

Enable enhanced maternal and

child care

Illustrative value creation opportunities

Expand to new markets and develop new products

• Create real-time digital platforms• Re-model medical equipment to drive down costs• Enable remote access for elderly and un-connected

Leveraging technology and digital platforms to improve out-reach

Set up end to end ecosystem

• Create low cost healthcare services and products• Develop easy to use insurance systems• Improve access to healthcare information and greater knowledge sharing between information systems

Provide critical infrastructure to strengthen basic healthcare systems in rural and remote areas across developing and emerging markets

Extend products as a service

• Integrate maternal and child care• Package healthcare with basic goods• Leverage circular models to reduce costs of medical services

Re-engineer existing business models to reduce the cost to serve customers

SDG target areas

40

Detailed targets for the good health and well-being goal is provided at the end of this chapter on page 47

Turning challenges and trends into opportunitiesThe private sector has the opportunity to leverage some of these key health and well-being trends and convert them into commercial opportunities that help deliver both favourable societal and business outcomes.

Figure 17: Key SDG target areas and value creation opportunities

41

Pharmaceuticals and biotechnologyPharmaceutical and biotechnology companies are the primary players shaping the supply-side agenda for improved health and well-being. This sector is creating value by responding to the needs of the base of the pyramid (BOP) by providing low-cost medicines in developing and emerging economies in form of generic drugs for commonly occurring communicable and non-communicable diseases. These businesses are also creating new products and markets, extending new services, and creating infrastructure.

In addition, this sector has made substantial progress in setting up and investing in the development of the entire healthcare ecosystem, especially in less-developed and least-developed countries.

Figure 18: Healthcare opportunity: base of the pyramid8

GlaxoSmithKline’s investments in least developed countriesGlaxoSmithKline’s re-investment (20 percent of its profit) in the Least Developed Countries (LDCs) to develop healthcare infrastructure through training of the frontline health workers. Since 2009, the program has invested close to $23 million, trained close to 40,000 medical workers who have reached out to 11 million people across 35 countries.

Value delivered

• Reduced the risks of rejection of products and improve chances of government approvals on new medicines

• Improved brand positioning and trust as a responsible pharmaceutical provider

Key enablers

• Strong collaboration with local NGOs and governments

• Supplementing the current public healthcare spending

Physical infrastructure

Financing and investments

Partnership models

Figure 19: Business case for pharmaceuticals: base of pyramid9

Figure 20: Business case for increased access to health professionals10

$87.7 bn base of the Pyramid Health Care Opportunity

Across 35countries in Africa, Asia, Eastern Europe, Latin America

$56.7 bn Potential Market for Pharmaceuticals Opportunity in BOP

Increase Revenues

Creating and selling sales generic low cost drugs

Increasing sales due to improved access to life-saving drugs

Increased Access to

8.9 mn skilled health professionals across 107 countries

Enhance Intangibles

Establish role as market leader and innovator

Preferred choice for value chain partners

(medical staff)

Role of business and key playersBusinesses in variety of industries from pharmaceuticals, healthcare, telecommunications and consumer goods are driving value creation opportunities to help shape the current and future global health and well-being landscape.

Source: http://www.gsk.com/media/717047/health_worker_training_infographic.pdf (accessed January 7, 2016)

$

42

Healthcare providersHealthcare providers are primarily involved in delivering the services associated with ensuring health and well-being across different markets. These businesses are creating value by reducing the service and material costs of delivering healthcare while improving access for the end user (i.e., patients). They are entering new markets by leveraging digital technologies like telemedicine and mobile applications to help connect the primary healthcare provider with the end-user consumer and lowering the cost to serve the customer, especially in physically hard-to-reach markets and remote locations.

More often than not, critical medical equipment such as X-ray, ECG, and ultrasound machines are extremely expensive, which is reflected in the very high healthcare costs in facilities like hospitals and clinics. Many healthcare manufacturers and providers are bringing in disruptive changes and providing more affordable alternatives that can be in form of:

Figure 21: Telemedicine opportunity and business case11

Figure 22: Portable medical devices opportunity and business case12

$34 bn is the global telemedicine market by the end of 2020

Increased Revenues

Increase revenue streams by repeat usage and

convenience of access

Lower Costs

Reduce operational costs by replacing the need

for expensive equipment and physical infrastructure

$20 bn will be the global portable medical devices market by the end of 2018

Increase Revenues

Increase revenues by enabling customers to buy devices in larger quantities

Lower Costs

Reduce the overall costs of ownership for the end consumers

Mobility

Portable medical devices that enable frontline health workers, doctors and nurses in remote locations to arrive at an early and accurate diagnosis

Lowering cost of production

Localization of equipment R&D and production in the region to minimize costs

Circular alternatives

Companies like GE Healthcare, Siemens Healthcare and Philips Healthcare are refurbishing used equipment including ventilators, defibrillators, CT scanners, MRIs and the X-Rays and re-selling them as efficient and reliable alternatives to locally made brands and low-cost options to expensive imported equipment.

43

TelecommunicationsIn today’s rapidly evolving global landscape, mobile and digital technologies are fundamentally changing how services and products are delivered across the world. Health and well-being is no exception, with the emergence of opportunities like mHealth, which enables patients to receive health information and alerts, connect with service providers, and order prescriptions.

By virtue of their business models, telecom companies are typically providing the digital infrastructure and connectivity for healthcare providers and patients to be better connected. These businesses, with their mHealth suite of services, are addressing key challenges:

Remote monitoring and condition management

Remote monitoring and condition management helps connect bed-ridden or patients with long-term debilitating ailments to provide their medical progress reports on smart devices to health care providers.

Connectivity with healthcare provider databases

Through mobile technologies, information from patients can be directly provided to healthcare providers to improve data and accountability, and can be leveraged for self-reporting in cases of diabetes and asthma.

Asset management of critical medical infrastructure

Mobile and digital technologies are providing real-time information feedback and performance metrics to help healthcare providers and equipment manufacturers manage the lifecycle and uptime of critical medical equipment in hospitals and healthcare facilities.

M2M services meeting the challenges of healthcareVodafone's mHealth suite of services is fundamentally shaping how healthcare is being delivered by moving out healthcare services from primary facilities like hospitals and clinics to mobile devices and tablets. The mHealth suite is currently focused on delivering solution in three core areas:

• Long term condition management

• Moving the hospital to home / device

• Assisted living for terminally ill patients

Value delivered

• Generated new revenue streams through additional connections and services

• Improved brand positioning as a one-stop solution for all basic needs

Key enablers

• Digital highway to connect healthcare providers and patients

• Providing data integrity and real-time information for modern treatment methods

Data and accountability

Digital infrastructure

Partnership models

Figure 23: mHealth opportunity and business case13

$59.5 bn mHealth market opportunity by end of 2020, with a CAGR of 33.4% from 2015 to 2020

Increased Revenues

Sale of new connections to support mHealth (institutional

and retail buyers)

Additional revenue streams from value added service provided

Greater up-selling opportunities by providing mobile based

healthcare bundles and packages

Source: http://www.vodafone.com/business/m2m/health (accessed January 7, 2016)

44

Financing and investments

Increased Revenues

IntangiblesEnhanced brand name due to customer loyalty

and social programs

Additional revenue streams by more sales of existing product and sales from new products

Targeting 1 billion people to help develop good handwashing habits Unilever’s Lifebuoy soap brand has taken a strong ambition to improve the handwashing habit of 1 billion people around the world thereby reducing the incidence of child death up to 44 percent. To implement the same, the company has rolled out several pilots in Asia, Africa and Latin America promoting positive behavioural change, sensitizing the consumers about the advantages of handwashing.

Value delivered

• Generated new revenue streams through additional sales of Lifebuoy

• Improved brand positioning as the preferred choice of soap for health and hygiene

Key enablers

• Partnerships with local bodies to help provide sanitation supplies

• Investments in promoting the need for sanitation and personal hygiene

Partnership models

Figure 24: Business case for consumer goods for health and well-being development

Consumer goodsConsumer goods businesses are tapping into the active side of health and well-being, which is focused on maintaining personal health, hygiene and sanitation—a major development challenge across the developing and emerging world.

These businesses are continually innovating to provide new cost-effective products and solutions to improve the health and hygiene of their customer base. These initiatives promoting good health and wellbeing are helping companies positively impact societies in terms of:

Reduced number of sick days at work

By inducing behavioral change, consumer goods companies are encouraging people to adopt more sophisticated ways of living, impacting their health in a positive way. This, in turn, leads to higher work productivity and fewer sick days.

Preventive Healthcare

Preventive healthcare programs target reducing the incidence of disease and deaths with their innovative products and behavioral change campaigns, thereby avoiding the accompanying medical expense.

Source: https://www.unilever.com/Images/lifebuoy-way-of-life_2010-12-oct12_tcm13-355913_tcm244-409755_en.pdf (accessed January 7, 2016)

$

45

SummaryWith rapidly changing demographics and increased spending on healthcare, businesses need to focus their resources on creating more connected and digitally enabled healthcare systems.

Figure 25: Key value creation opportunities for driving greater health and well-being

New Products and Services

Products as a Service

End to End Ecosystem

• Create real-time digital platforms• Re-model medical equipment to

drive down costs• Enable remote access for elderly

and unconnected

Vodafone is providing mHealth suite of services moving out healthcare from primary facilities to mobile devices

• Integrate maternal and child care• Package healthcare with basic goods• Leverage circular models to reduce

costs of medical services

GE, Siemens and Philips are refurbishing used equipment like ventilators, defibrillators, CT scanners, MRIs

• Create low cost healthcare services and products

• Develop easy to use insurance systems

• Improve access to healthcare information and greater knowledge sharing between information

GSK is investing 20 percent of its profit made in least developed countries to develop healthcare infrastructure

Value creation opportunities

46

Build additional infrastructure to help scale new markets

Leverage mobility solutions to deliver mobility based healthcare solutions

Build Inter-sector and cross – sector funding mechanisms

Leverage cross industry supply chains to deliver products and services to inaccessible locations

Create data systems to support new healthcare products

Develop infrastructure to deliver services across healthcare lifecycle

Create digital platforms to help package healthcare in affordable end to end services

Drive investments required to scale convergence across various healthcare products

Leverage collaboration across to deliver various healthcare products as a service

Create data systems to help scale and received feedback to improve packaged services

Deliver critical medical and diagnosis equipment

Train and develop frontline medical staff

Provide digital platforms to help scale healthcare facilities by reaching out to the remote locations

Enable capital investments required to fund development of integrated healthcare ecosystem

Drive partnerships across public and private sector for technology transfer, funding and implementation

Create integration between fragmented data systems (both public and private information systems)

Enabling ecosystem required for implementation

Figure 26: Illustrative enablers required to drive value creation while promoting good health and well-being

New Products and Services

Products as a Service

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

End to End Ecosystem

Critical and Short TermScale and Long Term

Chapter endnotes1 United Nations Population Fund, “Population of

Over-60-Year-Olds to Reach One Billion within the Decade”, October 1, 2012, http://www.unfpa.org/press/population-over-60-year-olds-reach-one-billion-within-decade, accessed January 7, 2016

2 United Nations Population Fund, “State of the world’s population, 2014”, 2014, https://www.unfpa.org/sites/default/files/pub-pdf/EN-SWOP14-Report_FINAL-web.pdf

3 The Economist Intelligence Unit, “Global Outlook: Healthcare”, March 2014, http://pages.eiu.com/rs/eiu2/images/GlobalOutlook_Healthcare.pdf

4 Ibid

5 United Nations, “The Millennium Development Goals Report 2015”, 2015, http://www.un.org/millenniumgoals/2015_MDG_Report/pdf/MDG%202015%20rev%20(July%201).pdf

6 Ibid

7 Ibid

8 World Resources Institute, “The Next 4 Billion, Market Size and Business Strategy at the Base of the Pyramid, Chapter 2: The Health Market”, March 2007, http://www.wri.org/sites/default/files/pdf/n4b_chapter2.pdf

9 Ibid

10 Global Health Workforce Alliance and World Health Organization, “A Universal Truth: No Health without A Workforce”, 2014, http://www.who.int/workforcealliance/knowledge/resources/GHWA-a_universal_truth_report.pdf

11 Mordor Intelligence, “Global Telemedicine Market - Growth, Trends and Forecasts (2015-2020)”, December 2015, http://www.mordorintelligence.com/industry-reports/global-telemedicine-market-industry, accessed January 7, 2016

12 Markets and Markets, “Portable Medical Devices Market; By Equipment, Semiconductor Components (2013 – 2018)”, June 2013, http://www.marketsandmarkets.com/Market-Reports/semiconductor-opportunities-mobile-healthcare-market-1204.html, accessed January 7, 2016

13 Markets and Markets, “mHealth Solutions Market worth 59.15 Billion USD by 2020”, November, 2015, http://www.marketsandmarkets.com/Market-Reports/mhealth-apps-and-solutions-market-1232.html, accessed January 7, 2016

$

47

• By 2030, reduce the global maternal mortality ratio to less than 70 per 100,000 live births

• By 2030, end preventable deaths of newborns and children under 5 years of age, with all countries aiming to reduce neonatal mortality to at least as low as 12 per 1,000 live births and under-5 mortality to at least as low as 25 per 1,000 live births

• By 2030, end the epidemics of AIDS, tuberculosis, malaria and neglected tropical diseases and combat hepatitis, water-borne diseases and other communicable diseases

• By 2030, reduce by one third premature mortality from non-communicable diseases through prevention and treatment and promote mental health and well-being

• Strengthen the prevention and treatment of substance abuse, including narcotic drug abuse and harmful use of alcohol

• By 2020, halve the number of global deaths and injuries from road traffic accidents 3.7 By 2030, ensure universal access to sexual and reproductive health-care services, including for family planning, information and education, and the integration of reproductive health into national strategies and programmes

• Achieve universal health coverage, including financial risk protection, access to quality essential health-care services and access to safe, effective, quality and affordable essential medicines and vaccines for all

• By 2030, substantially reduce the number of deaths and illnesses from hazardous chemicals and air, water and soil pollution and contamination

• Strengthen the implementation of the World Health Organization Framework Convention on Tobacco Control in all countries, as appropriate

• Support the research and development of vaccines and medicines for the communicable and non-communicable diseases that primarily affect developing countries, provide access to affordable essential medicines and vaccines, in accordance with the Doha Declaration on the TRIPS Agreement and Public Health, which affirms the right of developing countries to use to the full the provisions in the Agreement on Trade Related Aspects of Intellectual Property Rights regarding flexibilities to protect public health, and, in particular, provide access to medicines for all

• Substantially increase health financing and the recruitment, development, training and retention of the health workforce in developing countries, especially in least developed countries and small island developing States

• Strengthen the capacity of all countries, in particular developing countries, for early warning, risk reduction and management of national and global health risks

Good health and well-being

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/health/

Access to education and financing is needed to bridge the skill and education gap

What does this mean for businesses?

Businesses can build human capital through sustained sourcing of an educated workforce and enhance brand image through education initiatives

Econet Wireless Group has leveraged its competency in mobile technology (mEducation platforms) to make commercial investments in education through its Eco-school to improve access to educational content.

children of primary school age do not attend school

57mnfinancing gap for basic and lower education in Asia, Africa and Latin America

$38bn

SKILL GAP

63% CEOs are concerned about availability of key skills

$70 bn 30% $7 bn

ACCESS TO EDUCATION FINANCING GAP

Quality education

The market size of mobile education by 2020

CEOs who feel that talent constrains them from pursuing

market opportunities

Global financing gap that can be addressed to meet

financial literacy needs

49Data and figures collected as part of secondary research conducted by Accenture Strategy All references and additional details can be found at the end of this chapter on page 56

50

Quality education

Lack of access to educationDespite significant efforts undertaken by governments, a large fraction of children do not currently have access to quality education. The trend is especially prevalent in some developing economies. For instance:

• More than 57 million children of primary school age still do not attend school. Fifty percent of these reside in conflict-affected areas¹

• Only 87 percent of children in developing countries finish primary education. In Sub-Saharan Africa alone, more than 10 million children drop out each year2

• 42 out of 100 children not enrolled in primary education live in conflict affected countries3

Financial gap to address access to quality educationDespite the growing need for quality education, many countries struggle to generate adequate funding for education initiatives. For instance, according to UN estimates:

• There is a $38 billion annual external financing gap for basic and secondary education in Asia, Africa and Latin America4

• Corporate contribution to global education is only 1/16th of what it gives to global health

Mismatch between skills and job requirements There is evidence that most organizations face difficulties in sourcing skilled talent. In a survey conducted by Accenture and UNGC in 2013, education was cited as a “top sustainability challenge affecting the core business” by 40 percent of more than 1,000 CEOs.5 Subsequently, in a 2014 survey of 1,344 CEOs in 68 countries, 63 percent are concerned about “the availability of key skills,” up from 58 percent in 2013.6

Education has long been acknowledged as an effective lever to improve lives of the poor. Studies have shown how an educated economy performs better on a variety of important metrics, including standard of living, health, and economic growth. The international community has made significant progress in elevating education levels across the world. However, many poor and marginalised still have limited access to quality education, many countries lack funding for education initiatives, and the skills needed most by businesses are in short supply.

Invest in educational infrastructure

Build relevant skills through training and development

Eliminate gender disparities

in education

Increase supply of quality

teaching sta�

Improve quality education access

at all levels

Secure skilled workforce through investments in training programs

• Improve productivity through skill development (critical thinking, problem solving etc.)

• Ensure continuity of operations through sustained sourcing of educated workforce

Build human capital required for long term sustainable growth

Promote organization’s brand through education initiatives

• Leverage education initiatives as a channel to connect with potential customers

• Build brand image; improve perception amongst consumers

SDG target areas

Illustrative value creation opportunities

Turning challenges and trends into opportunities

Figure 27: Key SDG target areas and value creation opportunities

Detailed targets for the quality education goal is provided at the end of this chapter on page 57

51

52

TelecommunicationsToday’s world is characterized by an increasing connectivity and digital infusion. Going forward, the scale of digital connectivity is only expected to soar, with more than 100 billion connected devices expected in 2030.7 The growing penetration of mobile technology has had a positive impact on a variety of industry sectors – including education.

Mobile technology has also enabled disruptive business models and services. With minimal investments in physical infrastructure, businesses today can provide innovative services customized to consumer needs. One such example is mobile education (mEducation). From a demand perspective as well, mobile platforms offer greater flexibility to consumers (such as the ability to choose from a variety of online courses at competitive rates).

Leveraging technology for educationEconet Wireless Zimbabwe, a part of the Econet Wireless Group, has leveraged its competency in mobile technology to make commercial investments in education. The newly launched Eco-school aims to improve access to educational content with the goal of impacting the lives and opportunities of its customers to:

• Enable development of new learner centric models of learning.

• Facilitate equitable access to educational content and interactive learning environments delivered through mobile devices.

Value delivered

• New revenue streams through mEducation services

• Brand differentiation by providing access to quality education

Key enablers

• Digital infrastructure to enable mEducation

• Partnerships with schools and other educating bodies

Digital infrastructure

Partnership models

Figure 28: mEducation opportunity in Africa8

Role of business and key playersSome leading organizations, especially those in the telecommunications, diversified, and financial services industries, are successfully working to improve access to quality education while creating competitive differentiation.

By 2020, the mobile education (mEducation) market size is estimated to reach

$70 bn

IntangiblesEnhance brand through

differentiated services that enable better living standards

RevenueGenerate new revenue streams through services addressing the

education access issue

Source: http://gbc-education.org/wp-content/uploads/2015/05/Investing_Econet.pdf (accessed January 7, 2016)

53

Learning and development through technical and vocational training in NigeriaDangote Group has invested close to $6.5 million in Dangote Academy in Nigeria to address its difficulty finding employees with the right technical skills. The Academy has two training channels.

• Institute of Management training which supplies talent to Dangote Group operations

• Institute of Technical training which provides technical and vocational training to Nigerian youth, some of whom will become Dangote staff

Value delivered

• Reduced talent search costs due to sourcing of the same from in-house training academy

Key enablers

• Partnerships with domestic and international trade organizations

• Investment to finance and operationalize the initiative

Financing and investments

Partnership models

Figure 29: Business case for investing in education9

In a global survey of more than 1,000 CEOs, almost

30% said that talent constraints kept them from pursuing market opportunities

Reduced Cost

Reduce hiring and talent search costs due to in-house

sourcing of quality talent

Reduce losses (due to unproductive time, losses etc.) by hiring employees

with right skill set

$

Diversified conglomeratesDiversified companies require a particularly varied pool of talent to run their operations efficiently. However, given a current shortage of talent with the right skill sets, many tasks at hand have become daunting. Conglomerates spend huge sums of money to find the best talent. Amidst this “war for talent,” some leading organizations are taking proactive measures to expand their pool from which they can source quality talent.

The number jumped to

50% among business leaders in countries that belong to the Association of South Asian Nations.

Source: http://cluteinstitute.com/conference-proceedings/2014MUPapers/Article%20336.pdf (accessed January 7, 2016)

54

Empowering girls using sports and life skills educationStandard Chartered’s ‘Goal’ program is aimed at empowering girls and women through education. Initially started as a pilot in 2006 with 70 girls, the program now has successfully reached 145,000 girls across 24 countries.

• The programme uses life skills education channelled through sports to empower adolescent girls from low-income communities with the knowledge and skills needed to make better informed life decisions

• The programme (typically nine months long) teaches girls about health and hygiene communication, rights and financial literacy to help transform their own lives as well as those of their families and friends

Value delivered

• Intangible benefit in the form of improved brand

Key enablers

• Partnerships with NGOs to be sustainable and scalable

• Data and accountability for monitoring and evaluation

Source: http://gbc-education.org/wp-content/uploads/2015/05/Investing_Standard_Chartered.pdf (accessed January 7, 2016)

Data and accountability

Partnership models

Financial servicesFinancial exclusion is a key challenge confronting some developing economies. An important demand-side initiative to help foster greater inclusion is advocating essential education in personal finance skills. However, few steps have been taken in that direction in the past few decades. Only recently, some leading financial institutions have deployed education programs to support it.

A wide range of financial education initiatives exist in the field to support financial inclusion. These rely on various delivery channels, including training courses, mobile messaging, television and radio programs. The global financing gap facing authorities and providers to roll out such initiatives is approximately $7 billion.10

55

SummaryProviding access to quality education is a critical priority for economies across the globe. This represents an opportunity for businesses to use education-related initiatives to connect with both potential employees and customers. In fact, some leading organizations are already leveraging this opportunity to secure their workforce as well as enhance their brand image.

Figure 30: Illustrative value creation opportunities through quality education initiatives

Secure skilled workforce through

investments in training programs

Promote organization’s brand through

education initiatives

• Improve productivity through skill development (critical thinking, problem solving etc.)

• Ensure continuity of operations through sustained sourcing of educated

Dangote Group in Nigeria has instituted its own Academy developing technical and vocational skills of its people, creating an in-house talent pool

• Leverage education initiatives as a channel to connect with potential customers

• Build brand image; improve perception amongst consumers

Econet Zimbabwe has launched its Eco-school which aims to provide equitable access to educational content and interactive learning environment through mobile devices

Value creation opportunities

Set-up facilities for training (classroom, support equipment etc.)

Create e-learning platforms and modern training equipment (telepresence, VC conferencing etc.)

Allocate funds to develop training modules, train-the-trainer sessions, setting up infrastructure etc.

Tie-up with stakeholders such as NGOs, institutes, vocational training centres to develop training capability

Utilise data to measure and monitor the impact of training and KPIs such as RoI, impact on employee productivity etc.

Leverage social media to assess consumer needs and market identified education initiatives

Create partnerships with banks, SHGs, NGOs, to align and target specific segments

Monitor the impact through changes in customer loyalty over time

Illustrative enabling ecosystem required for implementation

Figure 31: Illustrative enablers required to drive value creation through imparting quality education

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Critical and Short TermLong Term

Secure skilled workforce through

investments in training programs

Promote organization’s brand through

education initiatives

$

56

Chapter endnotes1 United Nations Educational, Scientific and

Cultural Organization, “Education for All Global Monitoring Report, Policy Paper 10, Children still battling to go to school”, July 2013, http://unesdoc.unesco.org/images/0022/002216/221668E.pdf

2 United Nations Educational, Scientific and Cultural Organization, “Children out of School”, http://www.unesco.org/education/efa/global_co/policy_group/children_out_of_school.pdf

3 Shari Krishnaratne, Howard White and Ella Carpenter, International Initiative for Impact Evaluation, “Quality education for all children?: What works in education in developing countries, Working Paper 20”, September 2013, http://www.3ieimpact.org/media/filer_public/2013/09/10/wp_20.pdf

4 Rebecca Winthrop, Gib Bulloch, Pooja Bhatt and Arthur Wood, Center for Universal Education at Brookings, Accenture and Global Business Coalition for Education, “Investment In Global Education: A Strategic Imperative For Business”, September 2013, http://www.brookings.edu/~/media/research/files/reports/2013/09/investment-in-global-education/investment-in-global-education-final--web.pdf

5 United Nations Global Compact and Accenture, “The UN Global Compact-Accenture CEO Study on Sustainability 2013”, September 2013, https://acnprod.accenture.com/~/media/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Strategy_5/Accenture-UN-Global-Compact-Acn-CEO-Study-Sustainability-2013.pdf

6 PwC, A World at School and Global Business Coalition for Education, “Planning for Impact: Measuring Business Investments in Education”, 2014, http://www.pwc.com/us/en/about-us/corporate-responsibility/assets/pwc-cr-planning-for-impact.pdf

7 Global e-Sustainability Initiative and Accenture, “#SMARTer2030: ICT Solutions for 21st Century Challenges”, 2015, http://smarter2030.gesi.org/downloads/Full_report.pdf

8 Econet Wireless, “Mobile And Technology Solutions For Education”, http://gbc-education.org/wp-content/uploads/2015/05/Investing_Econet.pdf

9 The Guardian, ”Why investment in universal education makes business sense“, October 4, 2013, http://www.theguardian.com/sustainable-business/investment-universal-education-business-sense

10 The World Bank, “Catalyzing Financial Education to Promote Financial Inclusion in MENA”, May 22, 2015, http://www.worldbank.org/en/news/feature/2015/05/22/catalyzing-financial-education-to-promote-financial-inclusion-in-mena, accessed January 7, 2016

57

• By 2030, ensure that all girls and boys complete free, equitable and quality primary and secondary education leading to relevant and Goal-4 effective learning outcomes

• By 2030, ensure that all girls and boys have access to quality early childhood development, care and preprimary education so that they are ready for primary education

• By 2030, ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education, including university

• By 2030, substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship

• By 2030, eliminate gender disparities in education and ensure equal access to all levels of education and vocational training for the vulnerable, including persons with disabilities, indigenous peoples and children in vulnerable situations

• By 2030, ensure that all youth and a substantial proportion of adults, both men and women, achieve literacy and numeracy

• By 2030, ensure that all learners acquire the knowledge and skills needed to promote sustainable development, including, among others, through education for sustainable development and sustainable lifestyles, human rights, gender equality, promotion of a culture of peace and non-violence, global citizenship and appreciation of cultural diversity and of culture’s contribution to sustainable development

• Build and upgrade education facilities that are child, disability and gender sensitive and provide safe, nonviolent, inclusive and effective learning environments for all

• By 2020, substantially expand globally the number of scholarships available to developing countries, in particular least developed countries, small island developing States and African countries, for enrolment in higher education, including vocational training and information and communications technology, technical, engineering and scientific programmes, in developed countries and other developing countries

• By 2030, substantially increase the supply of qualified teachers, including through international cooperation for teacher training in developing countries, especially least developed countries and small island developing states

Quality education

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/education/

Gender-diverse companies are likely to benefit through:

Increasing need to drive gender participation and contribution in education and workforce

What does this mean for businesses?

Businesses may need to develop an enabling ecosystem for women and provide them with technology access and skill development

YES Bank’s LEAP program—which is aimed at providing financial services like credit, saving and micro insurance to women—has been in contact with about 40,000 Self Help Groups (SHGs) as of March 2014.

Participation rates for women in universities in India and China

42-48%Women are likely to spend 4.5 more years in retirement than men

ONLY

4.8% CEOs of Global Fortune 500 companies are women

Gender equality

Develop financial products that suit women’s needs 

MARKET SHARE

45% more likely to witness market share growth

MARKET SIZE

70% more likely to successfully capture new markets

EQUITY

Likely to achieve 53% higher returns on equity

4.5 years

Promote skill development and technology access for empowerment 

Create an employee value proposition to achieve diversity goals

59Data and figures collected as part of secondary research conducted by Accenture Strategy All references and additional details can be found at the end of this chapter on page 66

60

Gender equality

Rapidly improving education level for womenOver the years, intensive efforts by civil societies, governments and development communities have significantly improved women’s education level. In fact, shortly after the turn of 21st century, university enrollment parity was achieved for the first time:

• In 1970, the global university enrollment ratio stood at around 160 men to 100 women1

• As of 2012, the global university enrollment ratio is 93 men to 100 women2

This positive trend emanates largely from the improvements in women’s education in the developed world. For example, in the US (in 2012), women accounted for almost 60 percent of annual university graduates, more than 70 percent of high school valedictorians, around 60 percent of master’s degrees, and close to 52 percent of doctorates.3 The figures may not be as positive in developing economies; however, significant advancements have been made in the past few years. The two largest emerging economies, India and China, are quickly moving toward parity, with university participation rates of 42 percent and 48 percent, respectively, (as of 2012).4

Underrepresentation of women in the corporate sectorDespite women’s strong showing in education, however, a significant gap remains with respect to women’s participation in the corporate environment:

• There is a strikingly low representation of women at the corporate leadership level. For example, women make up only 4.8 percent of CEOs in the Fortune 5005

• There is evidence that working women are likely to take early retirement. According to OECD data, women are likely to spend 4.5 years longer in retirement than men6

The trends related to rising women’s education level and continued low participation in the corporate workforce represent a huge opportunity for businesses actively looking to address the gender equality issue. According to recent research, gender-diverse companies are 45 percent more likely to grow market share, achieve 53 percent higher returns on equity, and are 70 percent more likely to successfully capture new markets.7

In the past decade, gender equality has become a critical issue for governments and businesses alike for two important reasons.. First, there has been recent, significant progress with respect to women’s education, particularly in terms of university enrolment and advanced degrees. That’s the good news. Conversely, despite these improvements, men continue to dominate in the global workforces (especially at leadership levels). Myriad opportunities exist for companies to expand and strengthen the participation of women at all levels of the organization, in all industries.

Empower women through skills development

Increase access to economic and

well-being resources

Strengthen participation in top

corporate roles

Develop new policies for women

Reduce female discrimination

and exploitation

Create products to drive financial inclusion

• Develop new financial products customized for women needs• Develop support infrastructure for entrepreneurship

Tap into the unmet demands of the non-served female target base:

O�er services to empower women

• Provide access to Internet• Enable women to take up jobs

Build skills and empower women through digital technology:

Improve productivity through gender inclusion

• Meet the diversity agenda through specific female representation targets• Groom women leaders for senior positions• Build stronger employer brand name; enhance employee value

proposition

Create opportunities for greater female representation across all levels and sectors:

SDG target areas

Illustrative value creation opportunities

Turning challenges and trends into opportunities

Figure 32: Key SDG target areas and value creation opportunities

Detailed targets for the gender equality goal is provided at the end of this chapter on page 67

61

62

Financial servicesDespite formidable growth in the financial sector, multiple opportunities still exist for shared value. Many leading financial companies have taken active steps to promote gender diversity. However, this hasn’t become the norm throughout. Financial institutions have plenty of untapped value creation opportunities to reap through greater female inclusion. For example, Yes Bank has successfully grown its revenue by targeting women self help groups (SHGs) as shown in Figure 2.

Providing financial services to women centric self help groups to develop local entrepreneursYES Bank's LEAP is a comprehensive program aimed at providing financial services like credit, saving and micro insurance to Self Help Groups (SHGs) through local partnerships involved in capacity building of the financially disadvantaged:

• Local partners act as the nodal point and assist in the identification, facilitation and servicing of the SHGs

• YES LEAP has reached to about 40,000 SHGs as of March 2014 and all of them women SHGs, thereby strengthening social empowerment and financial security of women

Value delivered

• Increased sales through new customers

• Improved brand through social inclusion

Key enablers

Financing and investments

Partnership models

Figure 33: Financial inclusion opportunity: Indian retail bank8

Role of business and key playersBusinesses are critical to answering the current and future global gender diversity question. Many businesses are pursuing gender-related opportunities in key industries, including financial services, consumer goods, telecommunications, and information technology.

YES LEAP has reached

1.3 mnwomen customers distributing a total of

$500 mn in loans

Enhance Intangibles

Enhance brand name through social inclusion programs

Increase Revenues

Generate demand by targeting new customer base

Source: https://www.yesbank.in/human-capital/employee-engagement/leap-learning-enhancement-action-program.html (accessed January 7, 2016)

$

63

Building the flexible working mindsetTelstra introduced the concept of flexibility as a mind-set which gave employees the opportunity to define and agree to the terms of flexibility. The policy was rolled out in March 2014 was included as a key parameter in the recruiting process. After a 3 month pilot period, the following results were obtained:

• Women applicants raised from 28 to 32 percent

• Offers accepted by women went up from 37 to 50 percent

Value delivered

• Improved employee value proposition

• Improved cost competitiveness through greater employee productivity through more balanced workforce

Key enablers

• Digital infrastructure to promote trainings

• Investments to set-up the requisite infrastructure required for the desired flexibility

Financing and investments

Digital infrastructure

$

TelecommunicationsBased on a study conducted by GSMA, only six of the most powerful people in the telecommunications industry are women and less than 40 percent of the workforce comprises women. Among end customers, 90 percent of women feel empowered with access to mobile technology, but 200 million fewer women than men own mobile phones.

These trends clearly represent an opportunity for telecom players to further the gender equality agenda by improving employee productivity as well as better targeting the global consumer base. Telstra’s unique flexible working model is an example of how organizations can successfully create favorable conditions to attract women employees.

Figure 34: Business case for gender diversity in telecommunications sector9

10%-52%Female participation in the telecom industry with a significant difference in the diversity spread in work-force across geographies with North America having the highest representation and Middle East the least.

Increase Revenue

Improved workplace and sales productivity due

to balanced workforce

Enhance Intangibles

Enhancing brand name through social inclusion programs

Source: http://www.theaustralian.com.au/business/media/telstra-trumpets-work-flexibility/story-e6frg996-1226774571462 (accessed January 7, 2016)

64

Disrupting the idea of flexible workingCare.com, through its unique model, aims to ensure that women can get the care they need to stay in the labor force and sustain their professional careers. The company leverages technology and its online platform destination for care, thereby providing access to millions of caregivers. This in turn enables women to go to work. The platform also creates millions of jobs for caregivers, who in turn contribute to economic growth.

Value delivered

• Increased revenue through commission from caretakers as well as care givers

Key enablers

• Digital infrastructure to connect caregivers and care takers

Digital infrastructure

Information technologyWhile care is not a women’s issue, caregiving responsibilities are overwhelmingly managed by women around the world. For instance:

• In the US, women spend twice the time on caregiving as men

• In OECD countries, it’s four times as much

Without access to care, women cannot participate in the workforce. This represents an opportunity for businesses to enable women to participate in the global workforce. The initiative undertaken by Care.com is an example of how businesses can empower women to participate more actively as a part of the workforce.

Source: http://www.care.com/company-overview (accessed January 7, 2016)

65

SummaryOur research indicates that women are at par with men when it comes to education. However, there is a significant gap with respect to women participation in the workforce. At the same time, there are growing opportunities to better serve women consumer segments to drive gender equality. At prima facie, these objectives may appear socialist in outlook. However, there are significant opportunities for businesses to grow revenue and improve brand image through a sharper focus on gender equality.

Figure 35: Illustrative value-creation opportunities to drive gender equality agenda

Value-creation opportunities

Create products to drive financial

inclusion

Offer services to empower women

Improve employee productivity through inclusive workforce

• Introduce financial products customized to the needs of the under privileged women

• Build support and infrastructure for entrepreneurship

YESBANK in India micro-finance targeted especially for rural women to help drive livelihood enhancement

• Offer trainings to rural women, thereby gaining better access to vast untapped workforce

• Offer services to empower women to participate in jobs

Care.com, through its unique model, aims to ensure that women can get the care they need to stay in the labor force and sustain their professional careers

• Meet the diversity agenda through higher female representation

• Groom women leaders for senior positions

• Build stronger employer brand name

Telstra has increased female applicant rate by introducing the concept of flexibility as a mind-set to allow employees to define and agree to the terms of flexibility

66

Build capacity and scale to reach last mile women customers (especially in rural areas)

Invest in R&D funds to help create women centric financial products

Setup partnerships with civil societies, local banks, SHGs to serve women customers

Utilize data and analytics to develop women centric financial products focused on driving equality and inclusion

Create physical channels for women to be connected – innovation labs, smart devices, technology networks etc.

Build online platforms to connect women with potential care givers

Use a multi-sector partnership approach to scale the access of technology to women

Build infrastructure to enable women flexibility to work from home etc. (telepresence, video-conferencing etc.)

Investments in setting up leadership programs, training programs etc.

Work with universities and educational platforms to create formal programs and structures to seed and grow women leaders

Enable data systems and analytics to help identify top-tier and merit based female talent who are to be groomed for leadership positions

Enabling ecosystem required for implementation

Figure 36: Illustrative enablers required to drive value creation while addressing the gender equality challenge

Create products to drive financial

inclusion

Offer services to empower women

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Improve employee productivity through inclusive workforce

Scale and Long Term

$

Chapter endnotes1 Yale Global Online, “Women More Educated

Than Men But Still Paid Less”, March 6, 2014, http://yaleglobal.yale.edu/content/women-more-educated-men-still-paid-less-men, accessed January 7, 2016

2 Ibid

3 Ibid

4 bid

5 Fortune, “Number of Fortune 500 women CEOs reaches historic high”, June 3, 2014, http://fortune.com/2014/06/03/number-of-fortune-500-women-ceos-reaches-historic-high/, accessed January 7, 2016

6 Organisation for Economic Co-operation and Development, “Expected years in retirement”, March 18, 2014, http://www.oecd-ilibrary.org/social-issues-migration-health/society-at-a-glance-2014/expected-years-in-retirement_soc_glance-2014-15-en;jsessionid=355t8s1e9btrp.x-oecd-live-03, accessed January 7, 2016

7 Sylvia Ann Hewlett, Melinda Marshall and Laura Sherbin, Harvard Business Review, “How Diversity Can Drive Innovation”, December 2013, https://hbr.org/2013/12/how-diversity-can-drive-innovation, accessed January 7, 2016

8 YES Bank, “LEAP – Learning Enhancement Action Program”, https://www.yesbank.in/human-capital/employee-engagement/leap-learning-enhancement-action-program.html, accessed January 7, 2016

9 GSM Association and ATKearney, “Connected Women, 2015, Accelerating the digital economy: Gender diversity in the telecommunications sector”, 2015, http://www.gsma.com/connectedwomen/wp-content/uploads/2015/04/GSM0001_03232015_WDReport_NEWGRAYS-web.pdf

Critical and Short Term

67

• Eliminate all forms of violence against all women and girls in the public and private spheres, including trafficking and sexual and other types of exploitation

• Eliminate all harmful practices, such as child, early and forced marriage and female genital mutilation

• Recognize and value unpaid care and domestic work through the provision of public services, infrastructure and social protection policies and the promotion of shared responsibility within the household and the family as nationally appropriate

• Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision making in political, economic and public life

• Ensure universal access to sexual and reproductive health and reproductive rights as agreed in accordance with the Programme of Action of the International Conference on Population and Development and the Beijing Platform for Action and the outcome documents of their review conferences

• Undertake reforms to give women equal rights to economic resources, as well as access to ownership and control over land and other forms of property, financial services, inheritance and natural resources, in accordance with national laws

• Enhance the use of enabling technology, in particular information and communications technology, to promote the empowerment of women

• Adopt and strengthen sound policies and enforceable legislation for the promotion of gender equality and the empowerment of all women and girls at all levels

Gender equality

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/gender-equality/

Water protection measures can future-proof operations and generate attractive returns

Lack of clean water and sanitation facilities have a significant impact on global health

What does this mean for businesses?

Businesses must focus on and invest in developing clean and e�cient water and sanitation infrastructure leveraging digital technologies and the knowledge of NGOs and governments

Coca-Cola's RAIN initiative aims to enhance water access to 2 million people in Africa. The company has committed $30 million over 6 years and provides clean drinking water access to more than 1 million people. 2 billion litres is replenished annually, thus reducing risk and building trust.

lack access to clean drinking water

780mnpeople do not have access to adequate sanitation

2.5bn

IMPACT ON HEALTH

6-8 mn people die annually from disasters and spread of water-related diseases

ACCESS TO DRINKING WATER IMPACT ON CLEANLINESS

Increase productivity through reduced disease incidence and higher morale

Clean water and sanitation

Minimize seepage and replenish water through innovation in operations 

Develop new products and services for better access 

ECONOMIC VALUE ADDED SECURITY OF SUPPLYCompanies must address a potential 50% increase in water withdrawal in developing countries by 2025

$1 spent on water and sanitation generates $4 in increased economic activity

69Data and figures collected as part of secondary research conducted by Accenture Strategy All references and additional details can be found at the end of this chapter on page 76

70

Clean water and sanitation

Improved access to clean drinking waterThe inadequate availability of clean drinking water has become an immense threat to the physical and economic health of developing countries. Governments of these countries have allocated significant resources to address this challenge; however, sustainable delivery remains elusive due to the high cost of coverage and high failure rates, particularly in rural and hilly areas. The private sector has also stepped in to collaborate and roll out tangible solutions that can bridge the gap in providing water access.

• 780 million people do not have access to clean water2

• 6 million to 8 million people die annually from water-related diseases3

Emergence of water balance and neutralityAs consumer society continues to grow, pressure has mounted on the limited supply of water available, thereby worsening water scarcity. Companies have started to rethink and transform the ways in which they use and manage water. They have already begun efforts to reduce their water footprint and slowly become water neutral—i.e., replenishing the water they have consumed by rejuvenating watersheds, sponsoring clean-water projects, and adapting their operations to reduce water loss.

• 85 percent of the world population live in areas affected by water scarcity4

• Globally, roughly 15 percent to 35 percent of irrigation withdrawals are estimated to be unsustainable5

• Industrial use of water increases with the income levels of countries, ranging from 10 percent for low and middle-income countries to 59 percent for high-income countries6

Focus on adequate sanitationSanitation has always been considered a precursor to good health and well-being. Even though its importance has been established and reinforced multiple times, sanitation still remains a challenge in developing countries. A number of initiatives have attempted to address the sanitation issue, but its impact has not been seen at the desired scale.

• Almost 2.5 billion do not have access to adequate sanitation7

• Every 20 seconds, a child dies as a result of poor sanitation8

• 1.1 billion people, or around 15 percent of the world population, still practice open defecation9

Access to clean drinking water and sanitation is an essential human need. But it’s also a significant challenge in most developing countries. Globally, one in every ten people lack access to safe water and one in every three people lack access to a toilet.1 Widespread attention to the issue in the past few decades, across both public and private sectors, has resulted in various initiatives that have experienced success at the local level. It’s now time for the international community to build on that success by addressing water and sanitation issues at the global level.

Protect water related ecosystems

Promote water resource management

Access to adequate sanitation

and hygiene

Endorse international cooperation

Access to safe and a�ordable drinking water

Improve clean water access through new products and services

• Build portable water solutions to reach customers beyond pipe access• Roll out products to improve quality of drinking water

Need for products for bridging the safe and a�ordable drinking water gap

Leverage innovation to reduce water consumption across operations

• Minimize seepage through process e�ciency• Mitigate future risks through water replenishment

Invest in sustainable methods of water usage

Improve productivity by minimizing water borne diseases

• Set up toilets/products to improve sanitation• Increase productivity by reducing disease incidence• Augment morale by creating better living conditions

Enhance health and hygiene through improved sanitation to boost growth

SDG target areas

Illustrative value creation opportunities

Figure 37: Key SDG target areas and value creation opportunities

Detailed targets for the clean water and sanitation goal is provided at the end of this chapter on page 77

71

Turning challenges and trends into opportunitiesThere is potential and enough opportunity in the trends and below mentioned SDG goals for businesses to marry value creation with societal benefits.

72

Financing and investments

Partnership models

$

Consumer goodsGrowing scarcity of water is posing a huge growth challenge to consumer goods companies, since water is needed for various functions across their value chain. Withdrawals are increasing at a rampant rate, especially in developing countries, setting off alarm bells for these companies given their dependency.

However, companies have started looking at water scarcity through a value opportunity lens. Driving investments and

initiatives to address water scarcity can not only build a trustworthy brand but also protect companies from future water scarcity risks. From a revenue standpoint, potable products such as clean water cans and bottles have made an impact, while from supply standpoint, initiatives such as the replenishment of local watersheds and conservation programs have reduced the impact of future price volatility. Companies have also started valuing water to understand the true cost of water and consider it as a key raw material rather than as an enabler.

Improving water access for over 2 million people in AfricaRAIN, a Coca Cola company initiative launched in 2009, aims to improve the lives of 2 million people in Africa by enhancing water access. Its objective is to promote improved hygiene behaviours, watershed protection and productive use of water.

• Support initiative by committing $30 million over 6 years (ending 2015)

• Provide clean drinking water access to more than 1 million people

• Replenish more than 2 billion litres of water annually

• Build partnership between 140 bodies to provide development expertise

Value delivered

• Reduce risk by replenishing local watershed

• Build trust by providing access to clean water and rolling out water conservation programs

Figure 38: Returns on investment in clean water and sanitation10

Role of business and key playersBusinesses are critical in shaping the clean water and sanitation landscape. Businesses from a variety of sectors are coming together to target opportunities in this area:

Every $1 spent on water and sanitation generates a return of

$4 in increased economic activity

RevenuesRoll out new products focussed on potable clean drinking water

IntangiblesBuild trust in community through

water conservation programs

Key enablers

• Fostering partnerships for development expertise

• Investment in setting up water replenishment projects

Source: http://www.coca-colacompany.com/stories/rain-the-replenish-africa-initiative/ (accessed January 7, 2016)

Figure 39: Securing license to operate through water protection measures11

United Nations predicts water withdrawals will increase by

50% by 2025 in developing countries

Risk

Protect sources of supply by adopting

sustainable practices

Replenish local watershed to secure future supply

73

Driving high levels of water efficiency at data centers Facebook has retrofitted the building management system and incorporated smart metering systems at its Prineville data center. Due to these interventions, Facebook was able to achieve strong levels of water efficiency.

• Use 100 percent outside air for evaporative cooling and humidification

• Recycle return air in winter in a ductless air distribution system

• Achieve WUE (water use effectiveness) of 0.31litres/kWH which is much lower than the national average of 1.0 litres/kWH

Value delivered

• Reduce long term OPEX cost

• Enhance brand value by being market leader in water effectiveness

Key enablers

• Physical infrastructure in the form of retrofits

• Investment in R&D and meter installations

Financing and investments

Physical infrastructure

$

TechnologyMore and more business are leveraging data to meet their demands, which has led to a steady increase in the number of data center facilities that house a rising amount of IT equipment. These data centers use a significant quantity of water in their cooling systems to maintain the proper temperature. With the growing need to reduce water consumption and improve water usage effectiveness, companies in the technology sector have begun efforts to reduce consumption either through design innovation or by retrofitting their management systems.

A consortium of technology companies have come together to form the Green Grid, which focuses on identifying ways to improve the resource efficiency of data centers. The Green Grid recently introduced the water usage effectiveness (WUE) metric to address water usage in data centers. Technology companies such as Facebook and Google are now using this metric to measure their water consumption.

Figure 40: Water consumption across data centres12

US National Average for water consumption across data centres

1.0 litre/KWH Cost

Leverage innovation to develop sector wide solutions

for water effectiveness

Reduce long term operational costs

Source: https://www.facebook.com/notes/facebook-engineering/designing-a-very-efficient-data-center/10150148003778920/ (accessed January 7, 2016)

74

Establishing water conservation and sanitation impacts as key consideration for project decision making processVedanta has incorporated water conservation and sanitation as one of the key areas to consider during their decision-making process for new and existing projects. The global resources giant has recycled nearly 34 billion litres which is 22 percent of water used during 2014. Some of its key initiatives at the subsidiary level include;

• Set up a zero discharge system which has helped reduce usage of external water by over 60 percent at its Aluminium plant

• Reduce fresh water consumption by 13 percent in its business operations (Bharat Aluminium Company)

• Construct 9,000 toilets out of its planned 30,000 in Rajasthan (Hindustan Zinc Limited)

Value delivered

• Reduce long term costs through process improvements

• Mitigate risks in the form of fines

Key enablers

• Physical infrastructure in the form of equipment

• Investment in R&D to identify cutting edge solutions

Minerals and metalsThe minerals and metals sector primarily depends on water during their initial extraction process. The key water management issues faced by this sector is related to mine dewatering, acid rock drainage, metal leaching, salt accumulation, and wastewater treatment. Though mining impacts on water quality and aquatic ecosystems tend to be localized, they can extend over long periods. The release of contaminants from some orphaned and abandoned mine sites has been a significant problem globally and has been a rising concern for the companies operating in this sector.

Similarly, sanitation has also been a real concern, as it impacts employee productivity. Most of the mines are located in remote areas, where sanitation issues have led to increased sick days and, consequently, higher costs and reduced productivity. Companies are gradually recognizing the impact of both water usage and sanitation, and have launched both company-wide and local initiatives to address them. For example, they have developed technologies to prevent or mitigate acid drainage and reduce or eliminate wastewater discharge into local waters.

Financing and investments

Physical infrastructure

$

Source: http://sd.vedantaresources.com/SustainableDevelopment2014-15/responsible-stewardship/environment/water.html (accessed January 7, 2016)

75

SummaryThrough a series of collaborative initiatives, communities, governments and private players have come together to address the water and sanitation challenge. These initiatives are designed to make a significant impact on society and, at the same time, create value for the businesses involved.

Figure 41: Key value creation opportunities for enhancing the state of clean water and sanitation

Value creation opportunities

Improve clean water access through new

products and services

Leverage innovation to reduce water

consumption across operations

Improve productivity by minimizing water

borne diseases

• Roll out portable clean drinking water products

• Offer services such as refilling of water cans, mobile sanitation etc.

General Electric’s on-demand mobile water treatment solutions provides water to businesses anytime and anywhere

• Deliver cross-industry solutions to address water scarcity

• Reduce long term operational costs through efficient water management

• Prevent water seepage from operations

Facebook has become the market leaders in water use effectiveness (WUE) across data centers by leveraging design innovation and smart metering

• Improve health of employees through both clean drinking water and sanitation

Vedanta has pledged to provide access to safe water, sanitation and hygiene through dedicated initiatives across its businesses

76

Chapter endnotes1 Water.org, “Millions lack safe water”, http://

water.org/water-crisis/, accessed January 7, 2016

2 United Nations, “United Nations International Year of Water Cooperation: Facts and Figures”, http://www.un.org/en/events/worldwateryear/factsfigures.shtml, accessed January 7, 2016

3 United Nations Educational, Scientific and Cultural Organization, “UN Water, World Water Day 2013, International Year of Water Cooperation”, http://www.unwater.org/water-cooperation-2013/water-cooperation/facts-and-figures/en/, accessed January 7, 2016

4 United Nations, “United Nations International Year of Water Cooperation: Facts and Figures”, http://www.un.org/en/events/worldwateryear/factsfigures.shtml, accessed January 7, 2016

5 World Business Council for Sustainable Development, “Facts and Trends: Water”, August 2005, http://www.unwater.org/downloads/Water_facts_and_trends.pdf

6 Ibid

7 United Nations Educational, Scientific and Cultural Organization, “UN Water, World Water Day 2013, International Year of Water Cooperation”, http://www.unwater.org/water-cooperation-2013/water-cooperation/facts-and-figures/en/, accessed January 7, 2016

8 United Nations Water, “Every 20 seconds, a child dies as a result of poor sanitation”, October 7, 2014, http://www.unwater.org/statistics/statistics-detail/en/c/211767/, accessed January 7, 2016

9 United Nations Children’s Fund, “Water, Sanitation and Hygiene (WASH)”, http://www.unicef.org/media/media_45481.html, accessed January 7, 2016

10 One.org, “Water & Sanitation”, http://www.one.org/international/issues/water-and-sanitation/, accessed January 7, 2016

11 United Nations Educational, Scientific and Cultural Organization, World Water Assessment Programme, UN Water, “Chapter 1: Facts and Figures, Managing Water under Uncertainty and Risk, World Water Development Report 4”, 2012, http://unesdoc.unesco.org/images/0021/002154/215492e.pdf

12 The Green Grid, “Water Usage Effectiveness (WUE): A Green Grid Data Center Sustainability Metric”, http://www.thegreengrid.org/~/media/WhitePapers/WUE

Set up clean water and sanitation infrastructure such as desalination, RO plants, portable toilets etc.

Invest in R&D to design newer and economical technologies for water treatment and to build innovative toilets

Partner with local NGOs, development agencies to promote use of clean water

Leverage data analytics to understand market demand for clean water products

Set up process to reduce water losses across operations by performing audits, retrofits, metering etc.

Utilize analytical tools to gauge and implement real time actions on water management

Invest in state of the art machinery and paraphernalia for efficient water usage

Partner with NGOs, self-help groups etc. to promote behavioural changes in water consumption

Use data to measure and monitor water usage KPIs

Build or restore sanitation facilities wherever needed

Finance sanitation programs and other affiliated educational programs

Create partnerships with governments to increase scale of operation

Enabling ecosystem required for implementation

Figure 42: Illustrative enablers required to drive value-creation by providing clean water and sanitation

Improve clean water access through new

products and services

Leverage innovation to reduce water

consumption across operations

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Improve productivity by minimizing water

borne diseases

Scale and Long Term

$

Critical and Short Term

77

• By 2030, achieve universal and equitable access to safe and affordable drinking water for all

• By 2030, achieve access to adequate and equitable sanitation and hygiene for all and end open defecation, paying special attention to the needs of women and girls and those in vulnerable situations

• By 2030, improve water quality by reducing pollution, eliminating dumping and minimizing release of hazardous chemicals and materials, halving the proportion of untreated wastewater and substantially increasing recycling and safe reuse globally

• By 2030, substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity and substantially reduce the number of people suffering from water scarcity

• By 2030, implement integrated water resources management at all levels, including through transboundary cooperation as appropriate

• By 2020, protect and restore water-related ecosystems, including mountains, forests, wetlands, rivers, aquifers and lakes

• By 2030, expand international cooperation and capacity-building support to developing countries in water- and sanitation-related activities and programmes, including water harvesting, desalination, water efficiency, wastewater treatment, recycling and reuse technologies

• Support and strengthen the participation of local communities in improving water and sanitation management

Clean water and sanitation

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/water-and-sanitation/

$

Increased demand for clean energy provides new revenue and cost-saving opportunities

Growing pressure to curtail emissions is driving e�orts in renewable energy development, energy e�ciency and distributed power

What does this mean for businesses?

Businesses need to develop partnerships and invest in setting up clean, decentralized energy solutions with the help of digital solutions to help scale these solutions

China’s Longyuan Power has helped setup the country’s first micro grid with a total installed capacity of 13.4 megawatts (Solar PV). It will provide clean energy power to more than 7,000 households and 20,000 local residents.

increase in installed capacity in the past decade

7.7times

DISTRIBUTED POWER

$150 bn in capital investments in decentralized power installations in 2012

RENEWABLE ENERGY

Streamline processes and operations to improve e�ciencies 

A�ordable and clean energy

Develop clean energy solutions such as renewables and mini grids

Over $131 bn in investments in developing countries in 2014

RENEWABLE ENERGY

DISTRIBUTED GENERATION

$206 bn in investments in decentralized power installations by 2020

Invest in and partner to drive green growth

79Data and figures collected as part of secondary research conducted by Accenture Strategy All references and additional details can be found at the end of this chapter on Pages 86-87

80

Affordable and clean energy

The rise of renewable energyThe shift from fossil to renewable energy started to gain momentum in late 1990s. Recently, a confluence of three forces in the global renewable energy market has led to an unprecedented rise in renewable energy technologies across the world:

Reduction in capital and operational costs

The global average cost of electricity generated from renewable sources such as solar, off-shore and on-shore wind has fallen drastically in recent years due to rapid improvements in technology and economies of scale in production:

• Solar PV LCOEs have fallen from 22.5 – 30 ¢/ kWh at the start of 2010 to 13 – 15 ¢/ kWh by the first half of 2015. They are expected to drop further to 5 – 15 ¢/ kWh by 20251

• Off-shore and On-shore wind LCOEs are expected to fall from 10 – 15 ¢/ kWh at the start of 2010 to 4 – 10 ¢/ kWh by 20252

Growth in renewable energy investments

Renewable energy investments in developing markets are now comparable in size to those in developed markets. More than $131.3 billion (up 36 percent from 2013) was invested in developing markets in 2014, compared with $138.9 billion (up 3 percent from 2013) invested in developed markets in the same time period.3

Expansion of installation base and capacity

In the past decade, the total installed renewable energy (excluding hydroelectric power) capacity has increased more than sevenfold from 85 GW to 657 GW.4 By the end of 2014, renewables comprised an estimated 27.7 percent of the world’s power-generating capacity, enough to supply an estimated 22.8 percent of global electricity.5

Growth of de-centralized (or distributed) powerRenewable, de-centralized and micro-generation energy solutions are slowly emerging as potential solutions to the growing demand for energy, especially in remote locations globally. Distributed power technologies are focused on meeting the needs of geographically dispersed end users where the availability of centralized or grid-based power is limited due to financial, technical, locational and infrastructural constraints. In the year 2000, decentralized power installations of 47 GW, representing capital investments worth $30 billion, contributed only 21 percent of the total additions to installed capacity.6 But in the past decade, this same number has tripled to 142 GW (2012), with more than $150 billion in capital investments, contributed to 39 percent of capacity additions.7

In the past 50 years, the world has witnessed an unprecedented wave of economic growth. This growth certainly was beneficial—it enhanced the lives of millions of people around the world and boosted the standard of living in many countries. Unfortunately, however, the majority of this growth was dependent on fossil fuels either directly or indirectly, resulting in a rapid escalation in harmful emissions. With the need to curtail emissions increasingly urgent, the international community must redouble its efforts to adopt clean energy as the alternative to fossil fuel.

Accelerate improvements in energy e�ciency

Expand and upgrade energy systems

Increase the share of renewable energy

in energy mix

Collaborate and cooperation on clean energy

Improve universal access to energy

Provide clean energy solutions in remote areas

• Set up mini and micro grids in remote locations• Use renewables for home based energy solutions• Leverage cross-sectoral partnerships to share power generation and consumption

Streamline operations to facilitate energy e�ciency

• Leverage digital and mobile technologies for real time monitoring of distribution assets• Improve process e�ciency to reduce carbon and water impacts• Overhaul existing infrastructure with cleaner and low cost technologies

Drive innovation to build low-carbon infrastructure and equipment

• Invest in R&D to propagate the innovation agenda • Collaborate with players in similar sector to share best practices• Raise capital and invest to scale renewable energy• Enable multi-stakeholder partnerships to drive green growth

SDG target areas

Illustrative value creation opportunities

81

Detailed targets for the affordable and clean energy goal is provided at the end of this chapter on pages 88

Turning challenges and trends into opportunities

Figure 43: Key SDG target areas and value creation opportunities

82

Utilities and energy service providersUtilities and energy service providers are taking up the clean and sustainable energy challenge, seeking to provide energy access for all. These businesses are making changes to their entire value chains to produce low-cost and affordable renewable energy:

• Greening the energy mix in the supply side: Amidst rapidly falling solar PV and wind power prices, utilities are working extensively to replace and supplement current generation capacity with renewable alternatives. This strategic move helps companies mitigate risks from potential further carbon pricing- and tax-regimes that may emerge as climate action intensifies all over the world. This concerted move by utilities and power generators might also help improve their image as responsible corporate citizens and help create greater awareness among end user customers.

• Optimizing distribution networks to minimize losses: In developing countries, many rural consumers and those at the base of pyramid are still living in power-deficient environments. Transmission and distribution losses are a major contributor to the growing gap between demand and supply. Non-technical reasons for these losses include theft, fraud, un-metered supply and billing mismanagement, which many businesses are seeking to address through better collaboration with their customers.

• Driving low-carbon and renewable-based distributed generation at the supply side: Traditional utilities (with greater focus on thermal production using carbon-intensive fuels) are facing the heat from renewable energy players, especially in rural and remote locations. They will have to slowly shift to renewable sources to generate energy to ensure license to operate.

Figure 45: Optimizing energy losses opportunity in Latin America and Caribbean9

Delivering China’s first commercial renewable energy based micro grid China’s first micro grid with a total installed capacity of 13.4 megawatts (Solar PV) will provide clean energy power to over 7,000 households and 20,000 local residents in Turpan New District. Longyuan Power Company along with other project sponsors worked extensively with local power grid company to work around a Chinese law which only allows one company to operate in a particular service area. This breakthrough model will help establish the blueprint for the way forward to deliver 30 micro-grid projects as a part of China’s 12th five year plan.

Value delivered

• Generate new revenue streams through increased access to remote customers

• Strengthen brand image as a potential partner to deliver off-grid micro grids at scale

Key enablers

• Physical infrastructure to develop renewable energy infrastructure

• Partnerships with public funding organizations and other electric utilities to scale off-grid distributed solutions

Physical infrastructure

Partnership models

Source: http://www.efchina.org/Case- Study-en/case-2014122305-en (accessed January 7, 2016)

Figure 44: The renewable energy opportunity in developing countries8

$11-17 bn Energy Losses in Distribution Networks Opportunity

Across 26 countries in Latin America and Caribbean

$131 bn investments (2014) in developing countries, CAGR of approximately 30% since 2004

Increase Revenues

Create new revenue streams from new customers with opportunity to bundle services in the future

Enhance Intangibles

Enhance brand image amongst end customers without the need for extensive marketing campaigns

Role of business and key playersBusinesses are critical to shaping the clean and sustainable energy challenge. Multiple companies from various sectors are coming together to pursue opportunities in this area.

83

Increased Energy Access to

1.2 bn people currently living without any access to electricity

Increase Revenues

Create new revenue streams to address rural customers

Enhance Intangibles

Establish role as market leader and innovator

Reduce Risks

Reduce operational load on existing centralized grid and ensure greater uptimeBy 2020,

$206 bn worth of investments will be driving close to 200GW of decentralized power installations

Oil and gasOil and Gas companies are in a unique position to drive the clean and sustainable energy agenda. These businesses face a tremendous challenge in shifting their entire business model and value chain away from carbon-intensive fuels. Renewable energy and other clean energy technologies have been the focus of these businesses in the past two decades. This sector is making key interventions to further strengthen the clean energy business case:

Diversifying the product portfolio with renewable energy

Oil and gas companies are looking to diversify into renewables given the push by various national governments and the emergence of new carbon pricing and taxation schemes that may significantly affect the profitability and future viability of any carbon-intensive business.

Driving R&D in clean energy

Oil and gas majors across the world are undertaking major investments in R&D for clean and sustainable energy. These investments are not only limited to renewable energy but also funnelled toward safer and environmentally conscious shale gas and non-conventional operations.

Figure 47: Renewable energy opportunity in the United States12

Creating a portfolio of renewable energy capabilities and expertiseTotal, a leading global oil and gas major has undertaken a concerted effort over the last decade to diversify and grow its renewable energy portfolio. With the $1.4 billion acquisition of SunPower in 2011 (largest manufacturer of solar panels in the US), Total has established itself as a key player in the solar power sector. In addition, Total is investing about $223 million to transform its unprofitable LeMede oil refinery into a bio-fuel plant. The company plans to invest $500 million annually in developing its renewable energy capabilities. This effort will help move renewable energy as a viable alternative to carbon intensive fuel sources.

Value delivered

• Generate new revenue streams through a diversified product portfolio

• Reduce future risks related to emerging carbon pricing schemes

• Secure license to operate by investing in renewable energy

Key enablers

• Physical infrastructure to develop renewable energy infrastructure

• Financing and investments into R&D investments to help advance and scale renewable energy technologies

Source: http://www.total.com/sites/ default/files/atoms/file/total-solar-power-investing-technology-bright-future (accessed January 7, 2016)

Physical infrastructure

Figure 46: Business case for distributed generation10,11

$9 bn investments in renewable energy projects by US based Oil and Gas majors from 2001 to 2010 (20% of the country’s total renewable energy investments in that period)

Increase Revenues

Develop a new capability and enhanced portfolio of products

Enhance Intangibles

Reduce Risks

Reduce exposure and risks associated with impending carbon pricing and / or taxation schemes

Establish the brand as a responsible company diversifying into low carbon energy sources

Financing and investments

$

84

TelecommunicationsMobile and digital technologies are fundamentally changing how energy will be delivered to the world especially in developing markets. By virtue of their business models, telecom companies are essentially providing the digital infrastructure and connectivity to enable customers and electric power providers to get connected:

Telecom tower-based micro grids

This involves setting up mini grids by leveraging new and existing telecom tower networks in remote locations to provide two key services – energy and connectivity to local population and small-scale businesses.

Distribution channel to provide rural customers access to home-based energy solutions

Through far-reaching mobile distribution networks, many energy service providers can provide critical energy end user solutions (e.g., solar lanterns and solar-powered refrigeration solutions)

Energy monitoring through M2M solutions

Telecom companies can leverage M2M (Machine to Machine) solutions to provide greater visibility into energy consumption in far-flung and rural areas, as well as help enable remote tracking and monitoring solutions for Pay-As-You-Go energy consumption models.

Figure 48: Solar powered telecom towers opportunity13

Developing off-grid solutions through solar powered telecom towersIn an innovative public private partnership (PPP) model, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Airtel and Kirchner Solar Group (KSG) in Uganda are developing telecom towers powered by solar PV technology. The project is expected to cover 30 villages, 100 mobile towers and positively impact over 50,000 people:

• Solar energy produced from the panels provide electricity to the telecom towers

• The additional solar panels on these towers will provide electricity to the nearby communities

Value delivered

• Generate new revenue streams through additional connections and services

• Reduce operational costs by limiting resilience of carbon based fossil fuels

Key enablers

• Physical infrastructure to enable solar powered telecom towers

• Digital infrastructure to enable payment for pay per use service

• Partnerships to deliver low cost and carbon solutions for telecom towers

Source: https://www.kirchner-solar-group.de/images/stories/pdf/presse/pm_ksg_uganda-project-with-developpp-and-giz_en.pdf (accessed January 7, 2016)

Physical infrastructure

Partnership models

Digital infrastructure

3,306telecom towers in Kenya, Tanzania and Uganda can potentially switch to renewable energy to ensure up-time despite being off-grid systems

Increase Revenues

Increase usage of data services to pay electricity bills through

mobile money platforms

Lower Cost

Reduce operational costs by limiting diesel usage and associated price volatility

85

Financing green infrastructure and advisingDeutsche Bank is emerging as one of the largest financial institutions providing and securing investments for renewable energy projects:

• Direct Investments: Invested over $1.1 billion in financing renewable energy projects worth over $4.73 billion

• Raise Investments: Helped clean energy companies and providers raise more than $5.1 billion of capital across global debt and equity markets

Value delivered

• Generate new revenue streams through additional financing products and services

• Strengthen brand and reputation as a socially responsible investor

Key enablers

• Financing and investments to enable clean energy providers to scale their businesses

• Partnerships to help clean energy solution providers raise capital from debt and equity markets

Source: https://www.db.com/cr/en/concrete-sustainable-large-scale-projects.htm (accessed January 7, 2016)

Financing and investments

Partnership models

Figure 49: Renewable energy YieldCos opportunity and business case15

$30 bn to

$1 trnGrowth in market capitalization of Yieldcos focused on driving renewable energy

Increase Revenues

Grow and diversify investment portfolio

Enhance Intangibles

Reduce Risks

Establish the brand as a responsible investor which is focused on driving both business and social value

Reduce overall exposure and overall capital risk as renewables

are not affected by fuel price volatility, carbon pricing

Financial servicesSignificant investments are needed to help the world establish, operate and manage clean energy solutions. To meet the 2 degree scenario (2DS), an estimated $550 billion annual investment will be required to drive renewables to 36 percent of the energy mix by 2030.14 Financial services companies are playing a critical role in unlocking financing options and capital for the development of clean energy through:

Energy Service Companies (ESCOs)

ESCOs bring two key interventions in financing key renewable and energy efficiency projects:

• Reducing the initial capital costs by replacing them with a staggered based or fee-based model

• Securing loans and acting as financial intermediaries

New Financing Vehicles (YieldCos)

New financing vehicle “YieldCo” is used to drive growth in renewable energy installations by primarily reducing the cost of capital which, in turn, lowers the overall financing costs for projects.

Fossil fuel divestment movement

Increasingly asset managers are choosing to set targets for under weighing their investments into carbon-intensive or fossil-fuel-based industries.

$

86

Chapter endnotes

Figure 50: Key value creation opportunities for driving affordable and clean energy

Provide clean energy solutions in remote areas

Streamline operations to facilitate

energy efficiency

Drive innovation to build low

carbon infrastructure and equipment

• Use home based renewable energy solutions

• Set up mini and micro grids in remote locations

• Leverage cross-sectoral partnerships for power generation and consumption

Longyuan Power Company is leveraging renewable energy to drive China’s first operational micro grid

• Leverage digital and mobile technologies for real time monitoring

• Improve process efficiency to reduce carbon and water impacts

• Overhaul existing infrastructure with cleaner and low cost technologies

Turkcell, Vodafone and Telefonica are working with utilities to provide M2M solutions for smart metering and energy data management

• Invest in R&D to invent efficient clean energy products

• Raise capital and invest to scale clean energy

• Enable multi-stakeholder partnerships to deliver green growth

Deutsche Bank is scaling up clean and sustainable energy by investing over $1.1 billion in financing projects

SummaryClean and sustainable energy will be the cornerstone of the development agenda for the coming future. Businesses must focus on providing access to clean and affordable energy and enhancing existing infrastructure through energy efficiency gains and technology improvements.

Value creation opportunities

1 International Renewable Energy Agency, “Renewable Power Generation Costs In 2014”, January 2015, http://www.irena.org/documentdownloads/publications/irena_re_power_costs_2014_report.pdf

2 Ibid

3 Bloomberg New Energy Finance and Frankfurt School- United Nations Environment Programme Collaborating Centre for Climate & Sustainable Energy Finance, “Global Trends In Renewable Energy Investment 2015”, 2015, http://fs-unep-centre.org/sites/default/files/attachments/key_findings.pdf

4 REN21, “Renewables 2015: Global Status Report”, 2015, http://www.ren21.net/wp-content/uploads/2015/07/GSR2015_KeyFindings_lowres.pdf

5 Bloomberg New Energy Finance and Frankfurt School- United Nations Environment Programme Collaborating Centre for Climate & Sustainable Energy Finance, “Global Trends In Renewable Energy Investment 2015”, 2015, http://fs-unep-centre.org/sites/default/files/attachments/key_findings.pdf

6 Brandon Owens, GE, “The Rise of Distributed Power”, 2014, https://www.ge.com/sites/default/files/2014%2002%20Rise%20of%20Distributed%20Power.pdf

7 Ibid

8 Bloomberg New Energy Finance and Frankfurt School- United Nations Environment Programme Collaborating Centre for Climate & Sustainable Energy Finance, “Global Trends In Renewable Energy Investment 2015”, 2015, http://fs-unep-centre.org/sites/default/files/attachments/key_findings.pdf

9 Raúl Jiménez, Tomás Serebrisky, Jorge Mercado, Inter-American Development Bank, “Sizing Electricity Losses in Transmission and Distribution Systems in Latin America and the Caribbean”, 2014, http://www10.iadb.org/intal/intalcdi/PE/2014/14933.pdf

87

Set up micro grids through off- grid solutions like Solar PV and biomass

Leverage mobility and digital technologies to monitor use and provide easy payment options

Leverage innovative and cross industry financing mechanisms to deliver off-grid solutions

Enable public private and cross industry partnerships to provide delivery of off-grid projects

Scale pay-as-you and other service based models using data and information systems

Enhance transmission and distribution infrastructure through retrofits

Utilize digital technologies to monitor asset and distribution network performance

Scale up operational and energy efficiency programs through energy service company (ESCO) financing

Partner across public and private sectors to improve energy infrastructure

Scale energy efficiency programs using feedback from energy data management systems

Enable innovative investment mechanisms to raise capital for research and development

Partner to drive collaborative effort across sectors for knowledge sharing in driving innovation

Leverage financial and sustainability performance data from projects to scale investments in green growth

Enabling ecosystem required for implementation

Figure 51: Illustrative enablers required to drive value-creation by providing affordable and clean energy

Provide clean energy solutions in remote areas

Streamline operations to facilitate energy

efficiency

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Drive innovation to build state of

the art equipment

Critical and Short TermScale and Long Term

10 International Energy Agency, “Executive Summary: World Outlook Energy 2015”, 2015, https://www.iea.org/Textbase/npsum/WEO2015SUM.pdf

11 International Energy Agency, United Nations Development Programme and United Nations Industrial Development Organization, “Energy Poverty: How to Make Modern Energy Access Universal”, September 2010, http://www.se4all.org/sites/default/files/l/2013/09/Special_Excerpt_of_WEO_2010.pdf

12 Jason Switzer, Dave Lovekin and Kelly Finigan, PEMBINA Institute, “Executive Summary: Renewable energy opportunities in the oil and gas sector”, January 2013, http://www.ai-ees.ca/media/12346/renewable_energy_opportunities_in_the_oil_and_gas_sector.pdf

13 Michael Nique and Kennedy Opala, GSM Association, “The Synergies between Mobile, Energy and Water Access: Africa”, March 2014, http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2014/04/MECS_Synergies-between-Mobile-Energy-and-Water-Access_Africa.pdf

14 International Renewable Energy Agency, “$550 Billion Annually Will Avert Most Serious Impacts of Climate Change, Says IRENA”, June 27, 2014, http://www.irena.org/News/Description.aspx?NType=A&mnu=cat&PriMenuID=16& CatID=84&News_ID=369

15 Energypost.eu, “$1 trillion solar, wind finance vehicle to outstrip oil and gas investment”, August 18, 2015, http://www.energypost.eu/1-trillion-solar-wind-finance-outstrip-oil-gas-industry/, accessed January 7, 2016

$

88

• By 2030, ensure universal access to affordable, reliable and modern energy services

• By 2030, increase substantially the share of renewable energy in the global energy mix

• By 2030, double the global rate of improvement in energy efficiency

• By 2030, enhance international cooperation to facilitate access to clean energy research and technology, including renewable energy, energy efficiency and advanced and cleaner fossil-fuel technology, and promote investment in energy infrastructure and clean energy technology

• By 2030, expand infrastructure and upgrade technology for supplying modern and sustainable energy services for all in developing countries, in particular least developed countries, small island developing States, and land-locked developing countries, in accordance with their respective programmes of support

Affordable and clean energy

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/energy/

MICRO GRIDS

$19.9 bn in revenue by 2020 globally from micro grids

FINANCIAL SERVICES

2.5 bn people are currently financially excluded and can be targeted

Infrastructure and technology can bridge the gap between the need for and availability of employment

Provide basic services, infrastructure and opportunities to the base of the pyramid to create a new customer base

Set up small businesses and a conducive environment near labor hubs to drive employment

Businesses need to develop the physical and financial infrastructure and provide basic services in partnership with local stakeholders to set up business hubs to employ more people

Barclays, CARE International UK and Plan UK have joined forces to tackle the issue of financial inclusion by taking a savings-led, rather than credit-led approach to microfinance through their initiative "Banking on Change."

skilled people may potentially not have job opportunities every year till 2018

new jobs emerged for every job lost due to technology

2.4UNUSED SKILLSET TECHNOLOGY

Decent work and economic growth

2.6mn

What does this mean for businesses?Some business opportunities can add revenue streams while driving socio-economic development

90Data and figures collected as part of secondary research conducted by Accenture Strategy

All references and additional details can be found at the end of this chapter on page 96

91

Decent work and economic growth

Unused aptitude: job and skillset mismatchThe global job crisis is creating a deficit of decent work. More and more educated youth are entering the job market every year; however, the demand-supply forces are restricting their access to a job that fits their skillset. As a result, potential talent that could have contributed to economic GDP gets compromised and wasted. Around 40 million net new jobs are expected to be created every year until 2018, which is less than the 42.6 million people that are expected to enter the labor market every year.1

Surge in employment due to onset of technologyOne of the effects of technology is the manner in which it impacts the labor market. There has always been a speculation whether technology actually increases employment rates or if it dampens employment opportunities. Although it reduces the demand for low-skilled workers, technology provides an opportunity for these workers to develop new technology skills and increase their hiring potential. Past trends have indicated that technology has relatively increased the overall employment rate for nations. It has been estimated that for every job that was lost due to the rise of technology, 2.4 new jobs have further emerged.2

Poverty and unemployment are detrimental to economic growth. Yet finding secure and fairly paid work continues to be a challenge in many areas of the world and is a key priority for most developing countries. The problem is exacerbated by a mismatch between existing and desired skills, jobs being displaced by technology, and infrastructure shortcomings that make it difficult for businesses to succeed. Both the public and private sectors have important roles to play in creating an environment that’s conducive to stronger economic growth that provides more opportunities to move more people from the ranks of the unemployed.

Lack of right investment in infrastructureInfrastructure plays a key role in fostering entrepreneurship, which is vital for job creation. Countries that have successfully set up the required infrastructure have seen a significant fall in unemployment. On the other hand, countries that have struggled to provide basic infrastructure have witnessed a detrimental impact on employment. Significant investment must be made in infrastructure to help re-ignite business growth and thereby boost employment.

Protect labour rights and forced labour

Endorse productive employment esp.

for youth

Encourage development

oriented policies

Strengthen capacity of financial institutions

Promote per capita economic growth and productivity

Serve the unmet needs of the marginalized to build a new customer base

• O�er basic services such as access to credit, savings account, skills training etc.• Provide growth opportunities and technology training to youth • Set up basic infrastructure such as electricity, transportation etc.

to generate revenue

Set up an economic ecosystem to drive employment

• Set up businesses near labour hubs reducing overheads• Help start up other small business or services to support the

core business• Enable conducive environment for building loyalty and support

Leverage the vast unemployed pool for creating shared value

SDG target areas

Illustrative value creation opportunities

Figure 52: Key SDG target areas and value creation opportunities

Detailed targets for the decent work and economic growth goal is provided at the end of this chapter on page 97

Turning challenges and trends into opportunities

92

93

UtilitiesAn adequate and regular power supply may be one of the most crucial factors for supporting economic growth in developing countries. Currently, about 1.2 billion people lack access to electricity globally.3 This infrastructure deficit has a significant impact on economic growth. Electricity serves as an input factor to a large set of activities that can improve welfare, create jobs, increase productivity and generate income. Utility companies are slowly adopting smaller decentralized micro-grid models to provide electricity access to remote regions, thereby simulating the economic growth in the region, which directly results in job growth.

Accelerating mission of bringing power to remote areas in India Sun Edison is partnering with Rockefeller to set-up over 100 off-grid solar energy plants in rural India. The initiative is creating shared value by bringing economic opportunity to villagers through use of clean electricity and creating new customer base for the company at the same time.

• Install 30 kw plants across selected villages to support local residences and businesses

• Partner with local banks to provide loans at subsidised rates to foster business growth

Value delivered

• Support revenue generation for the marginalised section of the society by providing basic infrastructure to conduct business

Key enablers

• Physical infrastructures to lay solar plants across villages

• Partnerships with local NGOs, banks and other intermediaries

Physical infrastructure

Partnership models

Source: http://www.smartpowerindia.org/ (accessed January 7, 2016)

Figure 53: Micro-grids opportunity and business case4

It is estimated that by 2020, revenue from micro-grids will grow to

$19.9 bnglobally

Increase Revenues

Tap into the unserved segment of the society creating

new customers

Enhance Intangibles

Build a strong brand name through initiatives of

inclusive growth

Role of business and key playersBusinesses can provide answers for the global education question and simultaneously create commercial value for their shareholders in the long term by reaping the benefits of potentially better-trained and more productive employees.

94

Financial servicesFacilitating inclusive financial growth is vital for the growth of an economy. The exclusion of large population shares from access to comprehensive banking services has been detrimental to development. Financial innovation can significantly lower transaction costs and increase reach, which enables new private-sector business models that help address other development priorities. Banks can create new financial instruments tailored to the needs of society and unlock a new customer base for themselves. Small businesses benefit from access to credit while households benefit from saving accounts that help them manage cash flow spikes, smooth consumption, and build working capital.

Figure 54: Potential value creation opportunity in addressing the financially excluded5

Promoting financial inclusion through a savings led approachBarclays, CARE International UK and Plan UK have come together to tackle the issue of financial inclusion by taking a savings-led, rather than credit led approach to microfinance through their initiative ‘Banking on Change’:

• Aim to improve the quality of life of the world’s poorest people living on less than $2/day

• Provide people with opportunity and skills to save and manage their money more effectively and access to the basic financial service they need

• Equip the members with an average annual savings of $58; Over 700,000 people have been covered so far

Value delivered

• Create new consumer base through new, customized financial instruments

• Build a strong brand in developing countries through financial inclusion

Key enablers

• Partnership with local stakeholders to roll out financial products

• Data and accountability to measure and monitor the reach of products

Source: https://www.home.barclays/content/dam/barclayspublic/docs/Citizenship/banking-on-change.pdf (accessed January 7, 2016)

Today, over

2.5 bn people globally are considered financially excluded – with no access to financial services, such as insurance, bank accounts or credit

Increase Revenues

Build a new customer base through low cost financial instruments

Enhance Intangibles

Enhance brand image by enabling financial inclusion

Data and accountability

Partnership models

95

Figure 55: Key value creation opportunities for ensuring inclusive growth

Serve the unmet needs of the

marginalized to build a new customer base

Set up an economic ecosystem to drive

employment

• Create access to basic infrastructure through innovative services at affordable rates

• Support skill development programs to reduce unemployment

• Offer financial products to improve welfare

Barclays, with their Banking on Change initiative, address the financial needs of the lowest section of the society enabling savings

• Establish businesses at labour hubs to economise overheads

• Serve as input factor for establishing other small businesses and services

Sun Edison is setting up off-grid solar plants in rural India and thereby bringing economic opportunity to villagers through use of clean electricity

SummaryCreating a conducive environment for businesses to thrive is a prerequisite for economic development. Such an environment, in turn, requires investment in creating access to key elements such as infrastructure, training, and financial inclusion. Collective action from both the public and private sector is required to advance the agenda.

Value creation opportunities

96

Set up basic infrastructure such as electricity, transportation etc. to improve quality of life and secure revenue

Finance initiatives focussed on building infrastructure, rolling out trainings and offering low cost financial products

Set up partnerships with local bodies to create mass reach and impact

Build the infrastructure need to set up and support a business hub

Integrate technology across the business hub to improve effectiveness of operations

Channel requisite funds to finance creating an economic ecosystem

Partner with local stakeholders to promote business growth

Leverage data to monitor long term success of setting up economic hubs

Enabling ecosystem required for implementation

Figure 56: Illustrative enablers required to drive value-creation by enabling job creation and economic development

Serve the unmet needs of the

marginalized to build a new customer base

Set up an economic ecosystem to drive

employment

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Critical and Short TermScale and Long Term

$

Chapter endnotes1 CNBC, “Global employment prospects

bleak until 2018: ILO”, January 20, 2014, http://www.cnbc.com/2014/01/20/global-employment-prospects-bleak-until-2018-ilo.html, accessed January 7, 2016

2 Internet Business Solutions Group (IBSG), Cisco Systems, “Australia’s future prosperity depends on our infrastructure systems”, January 2012, http://www.infrastructure.nsw.gov.au/media/18123/cisco_systems__ibsg_technology_and_infrastructure_031012.pdf

3 International Energy Agency, “Executive Summary: World Outlook Energy 2015”, 2015, https://www.iea.org/Textbase/npsum/WEO2015SUM.pdf

4 Navigant Research, “Microgrid Market Will Reach Nearly $20 Billion in Annual Revenue by 2020”, January 9, 2014, https://www.navigantresearch.com/newsroom/microgrid-market-will-reach-nearly-20-billion-in-annual-revenue-by-2020, accessed January 7, 2016

5 Barclays, “Our programmes: Banking on Change”, https://www.home.barclays/citizenship/citizenship-in-action/banking-on-change.html, accessed January 7, 2016

97

• Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries

• Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors

• Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services

• Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation, in accordance with the 10-year framework of programmes on sustainable consumption and production, with developed countries taking the lead

• By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value

• By 2020, substantially reduce the proportion of youth not in employment, education or training

• Take immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by 2025 end child labour in all its forms

• Protect labour rights and promote safe and secure working environments for all workers, including migrant workers, in particular women migrants, and those in precarious employment

• By 2030, devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products

• Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all

• Increase Aid for Trade support for developing countries, in particular least developed countries, including through the Enhanced Integrated Framework for Trade-Related Technical Assistance to Least Developed Countries

• By 2020, develop and operationalize a global strategy for youth employment and implement the Global Jobs Pact of the International Labour Organization

Decent work and economic growth

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/economic-growth/

Resilient infrastructure and inclusive industrialization are needed to support rapid growth in urbanization

Businesses need to develop resilient and sustainable products, integrate layers across products and services and collaborate with industry and cross-industry players to drive infrastructure improvements

Gujarat International Finance Tec-City (GIFT) the first of its kind financial and IT services hub in India was developed in partnership with IL&FS, a leading infrastructure provider. This city will provide close to 500,000 direct and indirect jobs in India.

people will be living in urban areas in Asia by 2050 Small and medium enterprises account for 50% to 60% of total global employment

50-60%

TECHNOLOGY AS A CATALYST

80% of CEOs feel that innovation drives e�ciency

NEED FOR RESILIENCE INCLUSIVE INDUSTRIALIZATION

Industry, innovation and infrastructure

3.3bn

What does this mean for businesses?Technology can help companies capitalize on the market opportunity presented by the infrastructure sector

Develop smart products for resilience and inclusive growth

Use technology to drive innovation to connect infrastructure products

Invest in products and services for inclusive and resilient growth

INFRASTRUCTURE TECHNOLOGY

15% performance improvement in buildings can be achieved through intelligent commissioning

$4 trn in infrastructure investment is needed globally as of 2014

99Data and figures collected as part of secondary research conducted by Accenture Strategy All references and additional details can be found at the end of this chapter on page 105

100

Industry, innovation and infrastructure

Emergence of resilient infrastructureResilient infrastructure, capable of withstanding any disturbance while providing the basic essentials, is vital for the growth of an economy. The growing complexity in building and connecting such interdependent infrastructure systems requires a multidisciplinary approach to design, monitor and manage them. With more and more people moving from rural to urban areas, the need to build such infrastructure becomes an obligation. Investment is this area has seen significant growth in the past decade.

• Since 2005, more than half of the world’s population resides in cities. In Africa the urban population is expected to double in less than a decade1

• In Asia, urban population accounts for 42.5 percent of the total set; 3.3 billion people will live in urban areas by 20502

Move toward sustainable inclusive industrializationRapid growth of industries is one of the key indicators of economic growth. The recent past has witnessed an increase in the share of medium and small-scale industries integrating into the value chains and markets once dominated by large scale players, thereby prompting sustainable and inclusive growth. These industries do present a compelling business case for future growth; however, investing in and promoting them is key.

• Small and medium-sized enterprises make up over 90 percent of business worldwide and account for between 50 percent and 60 percent of employment3

• Every one job in manufacturing creates 2.2 jobs in other sectors

Infrastructure, innovation and industries form the backbone of economic development. With urbanization rising rapidly around the world, sustained investment in building efficient and resilient infrastructure is a necessity. In parallel, innovation-intensive industries need to grow more quickly to sustainably support the growing population of urban dwellers. In most industries, technology will play a critical role in addressing both of these macro challenges.

Technology acts as a catalyst for innovationToday’s world is characterized by an ever-increasing connectivity and digital infusion. Going forward, the scale of digital connectivity is only expected to soar; hence, technology plays an important role in future growth. Both infrastructure and industries need continuous innovation to support growing consumer demand, and technology can play the role of a catalyst for such innovation.

• 80 percent of CEOs believed innovation drives efficiencies and leads to competitive advantage4

• 73 percent of highly innovative companies agree or strongly agree that their IT investments are made primarily to support growth initiatives

Facilitate scientific research and technological development

Increase access of small scale industries

Promote inclusive and sustainable industrialization

Increase access to information

Develop/upgrade quality and reliable

infrastructure

Develop products and services to facilitate resilience

• Manufacture smart interconnected products facilitating resource e�ciency • Create value chain to promoted inclusive, sustainable growth

Build products to support infrastructure and industrialization needs

Leverage technology to drive innovation

• Embed technology to interconnect infrastructure products• Use technology to foster entrepreneurship and business growth

Implant technology to enhance innovation across sectors

Unlock investments to support growth

• Invest in products/services to foster resilient infrastructure• Create products to drive financial inclusion

Create innovative financial instruments to boost growth

SDG target areas

Illustrative value creation opportunities

Figure 57: Key SDG target areas and value creation opportunities

Detailed targets for the industry, innovation and infrastructure goal is provided at the end of this chapter on page 106

Turning challenges and trends into opportunities

101

102

TechnologyTechnology is moving at a pace where innovation has become the need of the day and products become obsolete within a short time span. Given this constraint, the sector has coped well by continuously innovating and producing interconnected products such as smart phones, tablets, smart meters, and personal wear. These products play an important role in shaping the infrastructure of the future. Real-time data monitoring through these interconnected devices paves the way for resilience and effective management. Technology also plays an important role in fostering sustainable, inclusive industrial growth through the availability of the internet and through interconnected devices.

Investing in technology and innovation to help address urban challengesGoogle has recently launched an initiative (called Sidewalk Labs) which will leverage technology and innovation to improve urban life. The initiative seeks to improve city life by incubating urban technologies to address issues like cost of living, energy usage, transportation etc.

• Replace more than 10,000 phone booths in New York City with free Wi-Fi hubs

• Offer free domestic calls in the hubs

• Plan to improve efficiency of public transport through innovation

Value delivered

• Generate new revenue streams through innovative products

• Strengthen brand through need of the hour innovations

Figure 58: Opportunity for technology in infrastructure5

Role of business and key playersBusinesses are instrumental in addressing the need to build sustainable infrastructure and drive innovation in different industrial sectors to help meet the broader development agenda. A number of these companies are coming forward to create shared value for themselves as well as the society.

Technology has the potential to improve existing infrastructure by

15%

IntangiblesBuild better brand name through investment in latest technology

and innovation

RevenueGenerate revenue streams

through newer resilient products and platforms

Key enablers

• Digital infrastructure to build and support innovative products

• Investments to foster resilient innovation

Finance and investments

Digital infrastructure

$

Source: http://www.smithsonianmag.com/innovation/whats-deal-googles-sidewalk- labs-180955847/#G6Eis7u854gfABbV.99 (accessed January 7, 2016)

103

Gujarat International Finance Tec-City (GIFT) GIFT, an initiative set up by the Gujarat government (India) in partnership with IL&FS, a leading infrastructure provider aspires to serve as a paradigm for Next Class city in terms of quality of life, infrastructure and ambience. GIFT is conceptualized as a global financial and IT services hub, a first of its kind in India, designed to be at or above par with globally benchmarked financial centers.

• Create around 500,000 direct and indirect jobs

• Make the city scalable in each and every aspect

• Achieve an image of global city that keeps pace with modern technologies

Value delivered

• Generate revenue through new businesses and services

• Build brand by building the economy of a region and increasing employment

Key enablers

• Physical infrastructure to build the city from ground

• Partnerships with various players to provide essential services

• Significant investment in building and managing a new city

Construction and real estateConstruction and real estate form the backbone of infrastructure. To accommodate the growing needs of an economy, construction companies need to innovate on a continuous basis to build infrastructure that meets demand. The amalgamation of technology with this innovation has led to the development of resilient and sustainable infrastructure.

Construction companies have started to build infrastructure such as smart buildings, smart transportation, and smart communication, which are all interconnected and ensure easier and efficient management. These infrastructures not only address the environmental and societal challenges, but also enable ways to live more efficiently.

Source: http://giftgujarat.in/masterplan/ vision.aspx (accessed January 7, 2016)

Figure 59: Infrastructure demand-supply gap6

Global infrastructure demand is estimated at about

$4 trn in annual expenditure with a gap or missed opportunity of at least

$1 trn every year (as of 2014)

IntangiblesStrength brand image through job creation, financial inclusion etc.

RevenueBuild products and services to support resilient infrastructure

Physical infrastructure

Financing and investments

Partnership models

$

104

SummaryThere has been a drastic shift in outlook when it comes to developing infrastructure. Developers are now focusing on building resilient infrastructures that can accommodate rising demand. In parallel, scarcity has pushed companies and researchers around the world to find efficient ways to facilitate sustainable industrialization. Technology and innovation, coupled with significant investment, have immense potential to address the aforementioned challenges while unlocking a plethora of opportunities.

Figure 60: Key value creation opportunities for strengthening technology, innovation and infrastructure

Value creation opportunities

Develop products and services to

facilitate resilience

Leverage technology to drive innovation

Unlock investments to support growth

• Offer smart interconnected products and services

• Invest in promotion of sustainable industries and assets

Google’s Sidewalk is an innovation and technology led venture which targets to deliver superior product and services in the field of tech and innovation

• Leverage best practices across industries to drive the innovation agenda

• Embed technology to interconnect infrastructure products

GIFT initiative by the IL&FS aims to bring the best across sectors to provide innovation driven infrastructure for industries to bloom

• Invest in R&D to build solutions for resilient infrastructure and sustainable industries

• Create products to drive financial inclusion

Companies such as Google and Microsoft are investing in various incubation centers to unlock the value in technology and innovation driven ideas

105

Chapter endnotes1 Reliefweb.int, “Building resilient cities in

developing and emerging regions via big data”, January 5, 2015, http://reliefweb.int/report/world/building-resilient-cities-developing- and-emerging-regions-big-data, accessed January 7, 2016

2 Ibid

3 United Nations, “Goal 9: Build resilient infrastructure, promote sustainable industrialization and foster innovation”, http://www.un.org/sustainabledevelopment/infrastructure-industrialization/, accessed January 7, 2016

4 PwC, “How to drive innovation and business growth: Leveraging emerging technology for sustainable growth”, 2012, https://www.pwc.com/us/en/supply-chain-management/assets/pwc-oracle-innovation-white-paper.pdf

5 Global e-Sustainability Initiative and BCG, “SMART 2020: Enabling the low carbon economy in the information age”, December 2012, http://gesi.org/assets/js/lib/tinymce/jscripts/tiny_mce/plugins/ajaxfilemanager/uploaded/SMARTer%202020%20-%20The%20Role%20of%20ICT%20in%20Driving%20a%20Sustainable%20Future%20-%20December%202012.pdf

6 World Economic Forum, “Strategic Infrastructure Steps to Operate and Maintain Infrastructure Efficiently and Effectively”, 2014, http://www3.weforum.org/docs/WEF_IU_StrategicInfrastructureSteps_Report_2014.pdf

Build facilities to manufacture resilient and sustainable products such as smart meters, smart phones etc.

Integrate digital platforms as a layer across all products and services to interconnect and manage them

Invest in R&D to design new resilient products

Setup partnerships with cross-sector players to identify the best product offerings

Leverage data to monitor long term success of resilient products and services

Embed technology to build sector specific solutions

Finance initiatives targeted towards integrating technology across infrastructure

Partner with each cross-industry players to integrate technology in their services

Monitor long term impact of embedding technology

Collaborate to offer easy financing and investment options for new innovative ideas

Foster partnerships with financial institutions and players for lucrative projects

Utilise data to monitor the success and return of the investments made

Enabling ecosystem required for implementation

Figure 61: Illustrative enablers required to drive value creation to support innovation and help improve industries and infrastructure

Develop products and services to

facilitate resilience

Leverage technology to drive innovation

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Unlock investments to support growth

Critical and Short TermScale and Long Term

$

106

• Develop quality, reliable, sustainable and resilient infrastructure, including regional and trans-border infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all

• Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries

• Increase the access of small-scale industrial and other enterprises, in particular in developing countries, to financial services, including affordable credit, and their integration into value chains and markets

• By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities

• Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries, in particular developing countries, including, by 2030, encouraging innovation and substantially increasing the number of research and development workers per 1 million people and public and private research and development spending

• Facilitate sustainable and resilient infrastructure development in developing countries through enhanced financial, technological and technical support to African countries, least developed countries, landlocked developing countries and small island developing states

• Support domestic technology development, research and innovation in developing countries, including by ensuring a conducive policy environment for, inter alia, industrial diversification and value addition to commodities

• Significantly increase access to information and communications technology and strive to provide universal and affordable access to the Internet in least developed countries by 2020

Industry, innovation and infrastructure

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/infrastructure-industrialization/

GROWTHThe microfinance market will grow

10-15% by 2016

OPPORTUNITY SIZE

Asia’s 2.86 bn BOP consumer base has an aggregate income of $3.47 trn

Income inequality and gender discrimination erodes the quality of life and impedes economic growth

What does this mean for businesses?

Develop programs and o�er services to empower the poor

through Self Help Groups (SHGs) 

Develop skills and promote technology access to improve

BOP livelihood

Enact a diversity agenda to build a productive and

balanced workforce

Businesses need to create an enabling environment for the underprivileged and leverage improved processes and higher productivity to develop products that suit their needs

Annapurna Microfinance, which was designed to form and promote self-help groups, seeks to empower 250,000 poor women and households by 2015 to enhance their economic security.

of the wealthiest people own the equivalent of the bottom 50% of the global population

Globally women typically earn 24% less than men, with majority of jobs being informal or unprotected

24%

WEALTH GAP GENDER DISPARITY IN INCOME

Reduced inequalities

85

Base of the pyramid (BOP) presents a huge market opportunity for existing and new products

108Data and figures collected as part of secondary research conducted by Accenture Strategy

All references and additional details can be found at the end of this chapter on page 114

109

Reduced inequalities

Income disparityRising income inequality has been identified as an important trend in 2015 in a report by the World Economic Forum. Alarming levels of income disparity is a threat to stability both within and between countries. According to OECD, the income gap is at its peak for the past half century. It is not only having an adverse effect on the quality of human life, but is also impeding economic progress.

• A research by Oxfam revealed that the 85 wealthiest people on the planet owned the equivalent of the bottom 50 percent of the world’s population1

• The poorest 5 percent of Americans earn 35 times more than their Zambian counterparts, while in South Africa the income of black African households are on average 13 percent of the income of white households2

Gender discriminationEven after substantial representation of women in different spheres of life, disparities continue to exist. For instance:

• Globally, women earn 24 percent less than men, with varied gaps between countries.3 They are also more likely than men to be in vulnerable employment, with up to 75 percent of women’s job being informal or unprotected in developing countries4

• Worldwide, 83 percent of domestic workers are women and most of them are not legally entitled to a minimum wage5

Despite the significant efforts of the Millennium Development Goals in varied fields, inequalities (both within countries and across countries) continue to exist. Two of the most visible manifestation of these inequalities are income disparities between the affluent and the poor and continuing discrimination of women. Businesses can make a significant impact in both of these areas by sponsoring initiatives targeted at the poor (such as self-help groups to support entrepreneurship), building skills to empower underdeveloped communities, and promoting gender equality and productive workforces.

Enhance representation of

developing countries

Ensure equal opportunities and reduce inequalities

Promote social, economic and

political inclusion

Formulate fiscal, wage and social

protection policies

Achieve income growth of the

bottom 40 percent

Introduce initiatives targeted at poor (future potential customers)

• Promote initiatives to support self-help groups in entrepreneurship • Oer services customized to the needs of the underprivileged

Build skills to empower underdeveloped communities

• Provide access to the technology and Internet• Build skills to utilise technology for better livelihood

Build mechanisms to promote gender equality and build productive workforces

• Introduce the diversity agenda through higher female representation• Groom women leaders for senior positions

SDG target areas

Illustrative value creation opportunities

Figure 62: Key SDG target areas and value creation opportunities

Detailed targets for the reduced inequalities goal is provided at the end of this chapter on page 115

Turning challenges and trends into opportunities

110

111

Financial servicesUnequal access to financial assistance is one of the key reasons for income disparity. There is evidence (especially from developing countries) that lack of adequate financing avenues and the means to support the initiatives through nascent phases have led to business failures and added to poverty.

Microfinance is an effective mechanism to reduce poverty by providing access to financial services such as credit and insurance. Many financial organizations around the world are leveraging this opportunity to support self-help groups, thereby creating opportunities to grow revenue from previously untapped markets.

Annapurna Microfinance financing livelihoods Annapurna Microfinance Private Limited is a non-banking financial company established with an objective of forming and promoting self-help groups to attain improvement in their socio-economic condition through economic activities.

• Offering both financial and non-financial services to unbanked and marginalised people

• Provides technical assistance to make the poor become self-sufficient in creating and accumulating their own capital

• Offering financial assistance for economic empowerment

Value delivered

• Revenue generation through tapping previously unserved customer segments

Figure 63: Financial inclusion opportunity6

Role of business and key playersBusinesses can play an important role in addressing the inequality challenge, although the manner in which organizations approach the issue may differ by industry context. Several companies, representing the financial and consumer goods sectors, illustrate some of the progress being made.

Global micro finance market is expected to grow between

10-15% in 2016

RevenueAssisting in income generation

for the base of the pyramid

Key enablers

• Investment to extend financial support to the marginalized

• Data and accountability to monitor and track the loans

Financing and investments

Data and accountability

$

Source: http://ampl.net.in/micro%20credit.html (accessed January 7, 2016)

112

ITC’s E-Chaupal is changing the face of rural business E-Chaupal is an India based business initiative by ITC Limited that provides internet access to rural farmers with a purpose of informing and empowering them to improve the quality of agricultural goods and their quality of life.

• Farmers can use internet to directly negotiate the sale of their produce fetching a better price

• Online access helps them get education on good farming practices and place order for seeds and other inputs

• The computer is managed and operated by the head farmer who in turn charges a nominal service charge to bear the operating expenses

Value delivered

• Increased sales volumes through targeting rural consumers

• Reduced cost of quality inputs through direct procurement

Key enablers

• Physical infrastructure for setting up computers

• Digital infrastructure

• Financing and investment to set up

Consumer goodsPeople in rural areas are subject to various forms of inequality. Limited access to basic necessities like good health, clean drinking water, decent living conditions, and an infrastructure that promotes entrepreneurship must be addressed. Such a restrictive environment inhibits individuals’ potential to generate alternate forms of revenue and further adds to the diverging income gap. According to research estimates:

• Rural and semi-urban consumers (India alone) present a $20 billion opportunity in terms of the fast moving consumer goods sector by 2018 and this market is expected to cross over $100 billion 20257

• Asia has the largest BOP consumer segment with 2.86 billion people with an aggregate income of $3.45 trillion8

This represents a huge pool of customers that consumer goods companies can tap to drive the next wave of growth.

Source: http://articles.economictimes.indiatimes.com/2012-07-25/news/32848625_ 1_fmcg-business-e-choupal-network-fiama-di-wills (accessed January 7, 2016)

Physical infrastructure

Financing and investments

Digital infrastructure

$

113

SummaryBusinesses are well positioned to address the inequality challenge, while creating value by tapping new customer segments and gaining access to newer markets.

Figure 64: Illustrative value creation opportunities by reducing inequalities

Value creation opportunities

Introduce initiatives targeted at poor (future potential

customers)

Build skills to empower underdeveloped

communities

Build mechanisms to promote gender equality and build

productive workforces

• Promote initiatives and programs to aid self-help groups in establishing sources of income

• Offer services customized to the needs of the underprivileged

ITC’s e-Choupal initiative provides technological access to rural farmers and trains the farmers in skills such using technology enabling them to make better business decisions and earn higher returns.

• Provide access to technology and Internet

• Build skills to utilise technology for better livelihood

• Introduce the diversity agenda through higher female representation

• Groom women leaders for senior positions

Annapurna Microfinance has been established with an objective of forming and promoting self-help groups with a mission to empower 250,000 poor women and households for their economic security by 2015.

114

Chapter endnotes1 Oxfam, “Wealth: Having it all and

wanting more”, January 2015, http://oxfamilibrary.openrepository.com/oxfam/bitstream/10546/338125/8/ib-wealth- having-all-wanting-more-190115-en.pdf

2 Overseas Development Institute, “Putting inequality in the post-2015 picture”, March 2012, http://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/7599.pdf

3 UN Women, “Progress of the World’s Women, 2015-2016”, 2015, http://progress.unwomen.org/en/2015/pdf/UNW_progressreport.pdf

4 Ibid

5 International Labor Office, “Global and regional estimates on domestic workers: Domestic Work: Policy Brief”, http://www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/---travail/documents/publication/wcms_155951.pdf

6 responsAbility, “Microfinance Market Outlook, Developments, forecasts, trends, 2016”, http://www.responsability.com/investing/data/docs/en/17813/Microfinance-Outlook-2016-EN.pdf

7 India Brand Equity Foundation, “Indian Rural Market”, http://www.ibef.org/industry/indian-rural-market.aspx, accessed January 7, 2016

8 International Finance Corporation and World Resources Institute, “The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid”, 2007, http://www.ifc.org/wps/wcm/connect/3c2787004cc75e6094d7b59ec86113d5/Pub_009_The%2BNext%2B4%2BBillion.pdf?MOD=AJPERES

Invest in building enabling environment for the rural audience to generate more income

Setup partnerships to provide skill development and assistance in setting up new sources of income

Provide infrastructure to conduct operations at economical rates for e.g., subsidized rentals for office space

Set up digital platforms and other related systems to assist the underprivileged with greater access to technology

Invest in setting up physical and digital platforms to reduce digital divide

Partner with companies with complimentary technology solutions and with local bodies to impart the skills to use the same

Leverage data and analytics to gauge the effectiveness of the deployed systems and identify corrective action

Creating online platforms to impart new skills to women employees

Invest in setting up facilities for training and development of women employees

Work with universities and educational platforms to create formal programs and structures to groom and grow women leaders

Enable data systems and analytics to help identify best performing female candidates

Enabling ecosystem required for implementation

Figure 65: Illustrative enablers required to drive value creation to address inequalities

Introduce initiatives targeted at poor (future potential

customers)

Build skills to empower underdeveloped

communities

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Build mechanisms to promote gender equality and build

productive workforces

Critical and Short TermScale and Long Term

$

115

• By 2030, progressively achieve and sustain income growth of the bottom 40 percent of the population at a rate higher than the national average

• By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status

• Ensure equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies and practices and promoting appropriate legislation, policies and action in this regard

• Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality

• Improve the regulation and monitoring of global financial markets and institutions and strengthen the implementation of such regulations

• Ensure enhanced representation and voice for developing countries in decision-making in global international economic and financial institutions in order to deliver more effective, credible, accountable and legitimate institutions

• Facilitate orderly, safe, regular and responsible migration and mobility of people, including through the implementation of planned and well-managed migration policies

• Implement the principle of special and differential treatment for developing countries, in particular least developed countries, in accordance with World Trade Organization agreements

• Encourage official development assistance and financial flows, including foreign direct investment, to States where the need is greatest, in particular least developed countries, African countries, small island developing States and landlocked developing countries, in accordance with their national plans and programmes

• By 2030, reduce to less than 3 percent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 percent

Reduced inequalities

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/inequality/

The need to sustainably support rapid urbanization is creating new market opportunities

Strong and rapid urbanization requires sustainable technology transfer through innovative financial instruments and mechanisms

What does this mean for businesses?

Businesses need to develop capabilities for clean energy and smart devices, as well as products that leverage the knowledge of cross-sector players

Telefonica has assisted the city of Valencia in fulfilling its target of becoming a smart and sustainable city through a single connectivity platform with 350 sensors to provide real time data on tra�c management and help in making prompt real time decision making.

of the world’s population will be city dwellers by 2030

60%of the planet's resources are consumed by only 3% of Earth's area

FINANCING GAP

$174.4 bn global investment in technologies is required to support sustainable cities

URBANIZATION WAVE NEED FOR RESOURCE EFFICIENCY

Leverage technology to trace resource use and enhance connectivity

Sustainable cities and communities

Develop sustainable products and services

CONNECTED DEVICES

2.7 bn connected devices will be in use in smart cities by 2017

ENERGY MANAGEMENT SYSTEMS

Market to grow from $7.7 bn in 2013 to $24.2 bn in 2020

ELECTRIC VEHICLES

Market will grow from $83.5 bn in 2012 to $271.7 bn in 2019

60% to 80%

117Data and figures collected as part of secondary research conducted by Accenture Strategy All references and additional details can be found at the end of this chapter on page 124

118

Sustainable cities and communities

Rapid urbanization waveAs more and more people keep moving to urban areas, they increasingly strain cities’ infrastructure as well as financial, social and environmental resources. Without altering the way cities are built and managed, this urbanization wave cannot be sustainably supported.

• 70 percent of the world population will be city dwellers by the end of 20501

• 95 percent of the urban growth in the next few decades is expected to take place in the developing nations2

Technology enabling sustainable establishmentsA key challenge in developing sustainable cities is the complexity of how cities are planned, operated, and financed. As population in cities surge, it places greater stress on infrastructure such as transportation, healthcare, education and public safety. The solution to this challenge is to develop or retrofit cities leveraging the efficiencies and effectiveness of technology. Technology solutions not only help better manage infrastructure-operations and resource-efficiency, but also enable better communications among citizens.

• The world’s cities occupy just 3 percent of Earth’s land, but account for 60 percent to 80 percent of energy consumption and 75 percent of carbon emissions3

In the past few decades, the world has witnessed an unprecedented wave of urbanization. Going forward, this march to the cities will gain further momentum: By 2050, over two-thirds of the global population is expected to live in urban areas. To meet the demands of their growing population, cities must be sustainable and smart. This will require collaborative work by governments and businesses across sectors to optimize infrastructure, enhance service delivery, improve health and safety, and generate employment.

Smart cities require long term investmentsMeasures to shift toward sustainable cities should go hand in hand with measures to attract the necessary finance. The cost of funding sustainable cities is beyond the means of both government funding capacities and official development assistance; hence, it will need the support of the private sector in the long term. Governments can attract private investment by creating an enabling environment in the form of public-private partnerships that are mutually beneficial and can provide business value.

• Global investment in technologies to support sustainable cities is expected to be $174.4 billion from 2014 to 20234

• China is expecting to see more than $322 billion in cumulative investments by 2025 in more than planned 600 smart cities.5

Reduce per capita environmental

impact on cities

Inclusive and sustainable urbanisation

Safe and a�ordable transportation

Support to least developed countries

Access to safe and a�ordable housing and public spaces

Roll out sustainable products/services to facilitate sustainable living

• Sell products that can facilitate resource e ciency • Set up clean energy infrastructure• Oer shared economy services

Embed technology across all sectors to improve quality of services

• Leverage digital infrastructure for monitoring and evaluation of resource usage

• Oer services to enable better communications amongst citizens

Bring in technology and digital best practises to make cities sustainable

Unlocking new revenue streams through sustainable products and services

SDG target areas

Illustrative value creation opportunities

Figure 66: Key SDG target areas and value creation opportunities

Detailed targets for the sustainable cities and communities goal is provided at the end of this chapter on page 125

Turning challenges and trends into opportunitiesThe key trends and SDG targets provide ample opportunity for private players to leverage their capabilities and thereby create business as well as societal value.

119

120

Telecommunications Telecommunication is an essential element of a smart and sustainable city. A plethora of interconnected devices interact with each other to provide safe, convenient and environmentally conscious services to the citizens. Adoption of appropriate communication technologies such as cloud services and high-speed broadband communication enables a seamless provision of services. These services help improve business efficiency and convenience while also being a source of business value creation.

Telecom players have leveraged their network infrastructure and technology platforms to offer end-to-end digital urban services such as traffic updates, remote energy management, weather updates, and educational programs. From a societal standpoint, telecom company intervention can support real-time data gathering and analysis, thereby enabling more effective tracking and management of resource consumption.

Creating sustainable city of ValenciaTelefonica, a leading telecom player has assisted the city of Valencia in fulfilling its target of becoming a smart and sustainable city through its integrated management solutions covering a wide range of services.

• Setup a single connectivity platform with 350 sensors across the city to provide real time data on traffic management

• Prompt real time decision making through actionable data from sensors on traffic management, automated street light management etc

Value delivered

• Create new revenue streams for resource management services

• Mitigate risk from depletion of resources through real time data management

Role of business and key playersAchieving sustainable urban development will require multidimensional approaches across sectors to optimize infrastructure, enhance service delivery, improve health and safety and generate employment. Telecommunications, utility, and automotive companies provide some examples of recent successes.

Key enablers

• Physical infrastructure for setting up network and platforms

• Digital infrastructure for real time data monitoring

Physical infrastructure

Digital infrastructure

Source: https://m2m.telefonica.com/blog/valencia-on-the-smart-city-fast-track (accessed January 7, 2016)

Figure 67: Future of connected devices in smart cities6

Smart cities are projected to use

2.7 bnconnected things in 2017

Increased Revenues

Generate new revenue streams through services that use real- time data for city management

Risk Mitigation

Mitigate risk of natural resource depletion through real time communication and control

121

Creating the smart city of Malmo E.ON, a leading utility provider in Europe partnered with the City of Malmo, Sweden to supply the “City of Tomorrow” with integrated solar and geothermal facilities. E.ON has set up an integrated energy infrastructure to help the city manage its resources. All building service systems, energy producers, and energy consumers are connected and controlled through communication network.

• On track to supply 100 percent renewable or recycled energy

• Focus on de-centralized self-generation and supply

• Deployed the E.ON Smart Home System commercially for the first time in a large residential region

Value delivered

• Generate new revenue streams through products such as E.ON smart home systems

• Reduce costs through self- generation and supply

Key enablers

• Physical infrastructure in the form of hydro and geothermal plants, smart grids etc

• Digital infrastructure in from of smart meters, residential energy management systems etc

UtilitiesUtilities play an important role in the functioning of a smart and sustainable city. Some of their key contributions include electricity generation from renewable sources, distribution management through smart grids and smart meters, and customer management through smart billing.

Utilities have shifted from a standalone approach to an integrated one in partnership with technology and telecom providers to gather and manage real-time data. Through this collaboration, utilities can make real-time decisions, reduce operational costs, and manage energy consumption in cities.

Source: http://www.eon.com/en/sustainability/environment/technology-development/infrastructure.html (accessed January 7, 2016)

Physical infrastructure

Digital infrastructure

Figure 68: Energy management system opportunity and business case7

The worldwide EMS market is forecasted to grow from

$7.7 to $24.2 bnfrom 2013 to 2021 respectively with CAGR of

15%

RevenuesSell new products and services such as smart meters, energy

management kits etc.

Brand

Strengthen brand image by adopting low carbon solutions

such as renewable energy, self -generation etc.

122

Source London paving the way for a new era of transportationSource London, owned by Bolloré is the world’s largest wide electric vehicle charge point network. It was created with a vision of increasing the uptake and usage of electric vehicles in London.

• Provides 24*7 service through round the clock charge points

• Extensive coverage with 850+ charge points installed so far

• Charges an annual usage fee of £5

• Contributes to zero emissions

Value delivered

• Generate revenue models through new business models

• Improve brand image by setting up zero emission solutions

Key enablers

• Physical infrastructure in the form of a network of charging points

• Investment in financing the installations and management

Source: https://www.sourcelondon.net/ (accessed January 7, 2016)

Physical infrastructure

Automobiles Mobility is another key element of a sustainable city. Well-planned roads, fuel-efficient vehicles and smart traffic monitoring systems are all basic elements of a smooth transport network in a sustainable city.

Recently, we’ve seen an explosion in technology-driven innovative products and solutions from the automobile sector that can help tackle urban transportation challenges such as congestion and fuel consumption. Some of the emerging disruptive business models include integrated electric vehicles, peer-to-peer car sharing platforms, smart traffic management systems, and self-driven vehicles.

Figure 69: Electric vehicle opportunity and business case8

The global electric vehicles is expected to grow from $82.5 bn in 2013 to

$271.7 bnin 2019 with a CAGR of 19.2% with over 64.4 mn electric vehicles being sold in 2019

RevenuesRoll out new business models such as car sharing, electric

charging etc.

IntangibleBuild brand image by adopting

low carbon solutions

Finance and investments

$

123

SummaryBuilding sustainable and smart cities is a critical agenda for countries across the globe. This represents an opportunity for businesses of various sectors to innovate and offer disruptive solutions that cater to the needs of a sustainable city.

Figure 70: Key value creation opportunities for achieving sustainable living

Value creation opportunities

Roll out sustainable products/services

to facilitate sustainable living

Embed technology across all sectors to improve quality

of services

• Build new business models based on shared economy (car sharing, peer-peer leasing etc.)

• Offer products that facilitate resource efficiency (clean energy installations, smart

SourceLondon has launched the world’s largest charge point network creating infrastructure for electric vehicle charging

• Integrate technology and digital as a layer across all services

• Leverage real time data to monitor and manage services across sectors such as transportation, energy, healthcare etc.

Telefonica is leveraging its technological superiority in embedding it into systems across the city of Valencia bring operational cost savings

124

Chapter endnotes1 Forbes, “Where Will 70% Of The Population

Live In 2050?”, August 11, 2015, http://www.forbes.com/sites/jpmorganchase/2015/08/11/where-will-70-of-the-population-live-in-2050/, accessed January 7, 2016

2 UN-Water Decade Programme on Advocacy and Communication, “Water and Cities: Facts and Figures”, http://www.un.org/waterforlifedecade/swm_cities_zaragoza_2010/pdf/facts_and_figures_long_final_eng.pdf

3 United Nations, “Goal 11: Make cities inclusive, safe, resilient and sustainable”, http://www.un.org/sustainabledevelopment/cities/, accessed January 7, 2016

4 Navigant Research, “Investment in Smart City Technologies is Expected to Exceed $174 Billion from 2014 to 2023”, October 15, 2014, https://www.navigantresearch.com/newsroom/investment-in-smart-city-technologies-is-expected-to-exceed-174-billion-from-2014-to-2023, accessed January 7, 2016

5 China Daily, “Smart city investment set to top 2 trillion yuan by 2025”, March 27, 2013, http://www.chinadaily.com.cn/business/2014-03/27/content_17382102.htm, accessed January 7, 2016

6 Andrew Rugege, International Telecommunication Union, “IoT and Smart Sustainable Cities”, 2015, http://indoafrica-ictexpo.telecomepc.in/presentation/TELECOM%20PRESENTATION/ITU_IoT-SSC_DG_ITU_Andrew.pdf

7 etsinsights.com, “The Role of Energy in Smart Cities”, 2014, http://etsinsights.com/reports/role-energy-smart-cities/, accessed January 7, 2016

8 Transparency Market Research, “Electric Vehicles Market to Rise at 19.2% CAGR from 2013 to 2019”, September 15, 2015, http://globenewswire.com/news-release/2015/09/15/768272/10149360/en/Electric-Vehicles-Market-to-Rise-at-19-2-CAGR-from-2013-to-2019-Transparency-Market-Research.html, accessed January 7, 2016

Set up facilities to manufacture products such wind turbines, solar panels, electric cars etc.

Create digital platform to support new services (smart grids, peer-peer sharing system, energy management systems etc.)

Allocate funds for both setting up the physical and digital infrastructure and for supporting R&D to identify new solutions

Leverage cross sector players to sell services (car sharing, remote monitoring etc.)

Need for data systems to monitor the effectiveness of the products/services in the long term

Build infrastructure to integrate technology across all sectors to improve effectiveness of services

Channel funds to build systems and platforms for embedding technology

Partner with cross-sector players to integrate technology and to new solutions

Need for real time data systems to improve effectiveness of day to day services

Enabling ecosystem required for implementation

Figure 71: Illustrative enablers required to drive value creation and build sustainable cities and communities

Roll out sustainable products/services

to facilitate sustainable living

Embed technology across all sectors to improve quality

of services

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Critical and Short TermScale and Long Term

$

125

• By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums

• By 2030, provide access to safe, affordable, accessible and sustainable transport systems for all, improving road safety, notably by expanding public transport, with special attention to the needs of those in vulnerable situations, women, children, persons with disabilities and older persons

• By 2030, enhance inclusive and sustainable urbanization and capacity for participatory, integrated and sustainable human settlement planning and management in all countries

• Strengthen efforts to protect and safeguard the world’s cultural and natural heritage

• By 2030, significantly reduce the number of deaths and the number of people affected and substantially decrease the direct economic losses relative to global gross domestic product caused by disasters, including water-related disasters, with a focus on protecting the poor and people in vulnerable situations

• By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management

• By 2030, provide universal access to safe, inclusive and accessible, green and public spaces, in particular for women and children, older persons and persons with disabilities

• Support positive economic, social and environmental links between urban, peri-urban and rural areas by strengthening national and regional development planning

• By 2020, substantially increase the number of cities and human settlements adopting and implementing integrated policies and plans towards inclusion, resource efficiency, mitigation and adaptation to climate change, resilience to disasters, and develop and implement, in line with the Sendai Framework for Disaster Risk Reduction 2015-2030, holistic disaster risk management at all levels

• Support least developed countries, including through financial and technical assistance, in building sustainable and resilient buildings utilizing local materials

Sustainable cities and communities

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/cities/

Increasing relevance of resource e�ciency is reducing costs and creating new revenue opportunities

Increasing demand for resources is making extraction prices more volatile and putting unsustainable stress on natural ecosystems

What does this mean for businesses?

Businesses need to develop processes and capabilities for reuse and recovery and establish supply chain traceability to identify waste-recovery opportunities

H&M partnered with I:Collect to setup a recovery and collection system for used clothes in 48 countries. Clothes are resold, transformed or recycled depending on quality.

Earth’s worth of resources are being consumed by the global population

1.6 timesincrease in commodity price index for 1% increase in GDP

STRESSED ECOSYSTEMS

More than 60% of Earth’s ecosystems are seriously degraded

UNSUSTAINABLE DEMAND HIGH EXTRACTION PRICE

Develop modular products and circular business models to reduce ownership costs 

Create partnerships and linkages to enable collection mechanisms and recovery

Responsible consumption and production

Leverage technology and investments to minimize waste and use of virgin material 

BIODEGRADABLE PLASTICS

$2 bn to $3.4 bn growth in market value between 2015 and 2020

AUTOMOTIVE REMANUFACTURING

$139.8 bn market size by 2020

CIRCULAR OPPORTUNITY IN TEXTILES

$59.5 bn to $70.5 bn cost savings per year in apparel industry from shift to a circular economy

1.5%

127Data and figures collected as part of secondary research conducted by Accenture Strategy All references and additional details can be found at the end of this chapter on page 134

128

Responsible consumption

Increasing demand for resourcesTo support rising consumer demand, especially in developing countries, more and more resources are being depleted at an alarming rate, eventually leading to resource scarcity.

• Surge in the rate of resource extraction: Currently the world uses over 50 percent more natural resources than 30 years ago, which equals about 60 billion tonnes of raw materials annually.1 During 1960–2000, for every 1 percent growth in GDP there was a 0.2 percent drop in commodity price index. The trend has reversed in the 21st century.2,3,4 During 2000–2014, for every 1 percent increase in GDP there has been a 1.5 percent increase in commodity price index5

• Changes in regional consumption patterns: Currently an average person in North America consumes up to 90 kilograms of raw material per day compared to just 9 to 10 kilograms per day in Africa6

• Increase in consumption among the middle and lower class: The number of middle class consumers (those with an annual income of $6,000 to $30,000 based in purchasing power parity terms) will triple by 2030.7 The total spending of base-of-the-pyramid customers (4 billion people with annual income of less than $3,000 per year) will be close to $5 trillion8

Over stressed natural ecosystems It is estimated that the global population is currently consuming 1.6 Earths’ worth of resources to support itself.9 For the year 2015, the World “Overshoot day of 2015” arrived on August 13th, marking consumption of resources as an ecological debt for that particular year.10 More than 60 percent of Earth’s ecosystems is seriously degraded or used unsustainably, and close to one-third of the world’s flora and fauna has been lost since 1970.11

The global economy has also struggled to decouple economic growth from emissions growth. Based on historical trends, for every 1 percent increase in global GDP, CO2e emissions have risen by approximately 0.5 percent and resource intensity by 0.4 percent.12 Under a business-as-usual scenario, the global temperature is expected to increase between 2.6 and 4.8°C by the end of the century.13

Increasing demand for resources by a burgeoning global population has led to a surge in the extraction and use of natural resources. Unfortunately, this prevailing consumption model has had serious negative impacts on the planet’s ecosystems—a situation that only will get worse as the global population continues to grow. To avoid catastrophic ecological scenarios, the global economy must work toward decoupling economic growth from the use of virgin resources—especially those with harmful emissions.

Figure 72: Key SDG target areas and value creation opportunities

Turning challenges into opportunitiesThe private sector has significant opportunities to convert the challenges of today’s resource constrained world into potential commercial opportunities.

Build awareness to popularize responsible

consumption patterns

Accelerate sustainable sourcing

and procurement practices

Reduce food and chemical

wastes from global supply chains

Drive technologies and research to

enable responsible consumption

Implement global natural resource

management

Maximize resource e�ciency (thereby reducing costs)

• Minimize waste streams through process e�ciency• Innovate processes to produce ‘More with Less’• Propagate the use of non-virgin and recycled materials in production

Leverage technologies and investments to close the loop on resource usage

Extend products as a service to generate alternate revenue streams

• Build circular models to reduce the overall costs of ownerships / service

• Create products which can be disintegrated into circular components post useful life

Employ technologies and partnerships to focus on delivering performance

Transform products through cross-industry linkages

• Set up collection mechanisms across multiple supply chains to improve recovery of waste and used products

• Partner with intermediaries to convert recovered waste and products• Establish delivery mechanisms to utilize recovered or processed products across di erent

supply chains

Create partnerships and linkages across di�erent supply chains to create continuous circular chains for products and services

SDG target areas

Illustrative value creation opportunities

Detailed targets for the responsible consumption and production goal is provided at the end of this chapter on page 135

129

130

Physical infrastructure

Financing and investments

Partnership models

$

Chemicals and materials Given the nature of their operations, chemical companies use a significant quantity of resources in their manufacturing facilities. In other words, they have a significant opportunity to identify innovative ways to optimize resource consumption. Some of them have already deployed relevant initiatives across the value chain, from product conceptualization (R&D) to disposal. Some of the key actions include:

Reduce key inputs and resources by improving process efficiency

Chemical companies may optimize their production processes to minimize resource use and reduce overall operational costs. (e.g., lower use of fresh water and energy efficiency initiatives across manufacturing facilities)

Leverage new product development to develop more bio-degradable products

By fundamentally changing how new products are conceptualized, chemical companies can manufacture products that are either bio-degradable or can be decomposed into non-hazardous re-usable components.

Create new products from waste through new recycling methodologies and product transformation

By developing new production processes and engaging new process technologies, chemical companies can convert waste and discarded materials into re-useable raw materials for other industries (e.g. converting non–recyclable plastic waste to fuel and reusing waste plastic to develop clothing materials and products).

BASF has created a multi-application bio-polymerBASF has developed a break-through compostable polymer –ecovio, which can be used across multiple applications in food packaging (shrink film, foam and thermoformed packaging), storage and agriculture. The company is engaging with value chain players and other industrial partners through a unique set of models:

• Drive closed loop products especially in the areas of horticulture and agriculture, where ecovio based films can be reused post their useful lifetime

• Engage in joint creation and development by working with food and beverage companies to develop safe and compostable packaging for mini food sachets and capsules

• Enable re-use of materials by engaging with hospitality partners and communities to utilize tableware and kitchenware made from ecovio

Value delivered

• Generate revenue streams through new resource efficient products

• Strengthen brand image as a responsible business driving circular economy

• Reduce operational costs by eliminating disposal costs

Role of business and key playersLeading organizations from industries such as chemicals and automotive are already undertaking initiatives to realize value by substantially improving resource efficiency.

Key enablers

• Physical infrastructure in form of process and manufacturing capabilities

• Partnerships with cross-sector partners to co-develop circular solutions

• Financing of R&D activities to identify circular products and applications

Source: http://www.plasticsportal.net/wa/plasticsEU~en_GB/portal/show/content/products/biodegradable_plastics/ecovio (accessed January 7, 2016)

Figure 73: Biodegradable plastics opportunity and business case14

$2 bn to $3.4 bn growth in market value of biodegradable plastics from 2015 to 2020 with a CAGR of 10.8 percent

Increased Revenues

Create new revenue streams from resource efficient products

Reduced Costs

Lower costs by reducing the proportion of virgin material in the manufacturing process

Stronger Intangibles

Strengthen brand through circular economy initiatives

131

Michelin’s tire leasing program Michelin, one of the leading tire manufacturers has created an innovative business model to recycle and up-cycle end of life (ELT) tires which are at the end of their useful life. The company offers tires not as typical products but as a continued service to its customers.

• Promote road safety: Customers are more likely to return ELT tires at the end of the useful life rather than continue to run their vehicles on these unsafe tires

• Divert waste to landfill: By taking back the ELT tires, the company is avoiding tires from being illegally dumped or legally landfilled

• Re-use and product transformation: The ELT tires can either be recycled to make road and playground surfaces or re-used for alternative energy

Value delivered

• Generate new revenue streams by extending products as a service and product transformation

• Reduce operational costs by re-using ELT tires as alternative energy and supplementing virgin input material

Key enablers

• Physical infrastructure in form of facilities to reuse and transform ELT tires

• Partnerships with customers and reverse logistics partners to receive ELT tires

• Digital infrastructure to help track the lifecycle of the tires under the leasing program

Source: http://www.michelintruck.com/services-and-programs/michelin-fleet-solutions/ (accessed January 7, 2016)

Physical infrastructure

Partnership models

Digital infrastructure

AutomotiveThe automotive industry is a resource intensive sector that combines a number of natural and man-made raw materials to form a finished product. Businesses in this sector have taken up the responsible consumption and production agenda by incorporating the following:

Extending products as a service

Many automotive parts and components manufacturers are taking control of their entire product value chain by instituting component leasing programs. These businesses control the life cycle of their products by taking back the products at the end of their useful life and replacing it with new ones. The end-of-life products are then disintegrated and re-used as raw material.

Reducing the overall weight of the vehicle and the amount of virgin input materials used

Businesses are working extensively to reduce the weight of vehicles and use a greater proportion of non-virgin and recycled materials in their components. This also helps companies lower carbon and other air emissions.

Re-organizing the supply chains to enable second-life sales of parts and vehicles

The automotive industry has been embracing the opportunity of next-life sales— re-manufactured or re-furbished parts that are available at significantly lower prices and meet all the technical and performance specifications of any original automotive part.

Figure 74: Remanufactured automotive parts opportunity and business case15

$139.8 bn size of the global automotive remanufacturing market by 2020

Increased Revenues

Develop new business models such as leasing etc.

Reduced Costs

Drive reductions in operational costs by re-using end of life

products as raw material

132

H&M: Defining circular model for the fashion industryH&M partnered with I:Collect (I:CO) to setup an enhanced recovery and collection system for used clothes across its stores in 48 countries.

• Re-sell: Clothing which is of relatively good quality is sold as second hand clothes

• Transform products: Worn out clothes and textiles are transformed into new products (e.g. cleaning cloth)

• Recycle into input material: Used clothes are disintegrated into textile fibres

Value delivered

• Generate new revenue streams through sale of used products

• Strengthen brand as a responsible and circular innovator

Key enablers

• Physical infrastructure for collection of the used clothing

• Partnerships with suppliers and collection agencies to recover products

Source: http://about.hm.com/en/About/sustainability/commitments/reduce- waste/garment-collecting.html (accessed January 7, 2016)

Physical infrastructure

Textiles and apparel The textile and apparel has been one of the most active industries in terms of driving responsible consumption and production across the entire value chain. The rising trend of socially conscious and responsible customers has led to innovative circular economy models.

Enable leasing models and product as a service

Businesses have started leasing their products to customers for a fixed time period. Once the lease term is completed, these products are returned to the supplier and are then either refurbished or re-sold to lower-end customers at a significantly reduced price.

Drive shared economy models to reduce cost of ownership

Businesses are developing peer-to-peer sharing models to address changing fashion trends and to optimize consumption patterns.

Reduce waste generation and incorporate non-virgin materials in the production and distribution supply chain

Textile and apparel businesses are working closely with upstream suppliers and retail partners to reduce waste generation in operations, particularly in the area of garment manufacturing and product packaging.

Figure 75: Circular economy opportunity for apparel and textile industry16

$59.5 bn to $70.5 bn Cost savings from across the global apparel industry resulting from shift to circular economy

Increased Revenues

New revenue streams to address rapidly changing fashion trends

Stronger Intangibles

Build brand image by selling /distributing used clothes

to lower income groups

Partnership models

133

SummaryAs the global middle class emerges in developing countries and continues to increase their pace of spending, there will be a growing need to manage consumption and production patterns. In this context, businesses have an opportunity to realize value by undertaking actions such as promoting shared utilization models, offering products as a service, and reducing or even completely eliminating waste in their product lifecycles.

Figure 76: Key value creation opportunities for driving responsible consumption and production

Value creation opportunities

Maximize resource efficiency

Offer product as a service

Transform products

• Minimize waste streams through process efficiency

• Promote resource efficiency through shared utilization models

BASF has developed a compostable polymer –ecovio, which can be re-used across industries as raw material post end of life

• Build circular models to reduce overall costs of ownerships / service

• Create products which can be disintegrated into circular components post useful life

• Set up collection and recovery mechanisms

• Convert recovered waste and products

• Enable redistribution of transformed or recycled products

Michelin’s leasing program for tires to enable customers to give back used tires for the company to recycle, transform or re-use in manufacturing processes

Closing the Loop’s recovery of precious metals from discarded and used mobile phones from developing countries

134

Chapter endnotes1 Friends of the Earth Europe, Friends of the

Earth Austria and Sustainable Europe Research Institute, “Overconsumption?: Our use of the world´s natural resources”, September 2009, http://www.foe.co.uk/sites/default/files/downloads/overconsumption.pdf

2 The Conference Board, “Total Economy Database – Key Findings”, January 2014, http://www.conference-board.org/data/economydatabase/

3 The World Bank, “World Bank Commodity Price Data (The Pink Sheet)”, December 2014, http://databullet.in/15433/world-bank-commodity-price-data-pink-sheet-december-2014, accessed January 7, 2016

4 IndexMundi, “Price Commodities”, http://www.indexmundi.com/commodities, accessed January 7, 2016

5 Ibid

6 Friends of the Earth Europe, Friends of the Earth Austria and Sustainable Europe Research Institute, “Overconsumption?: Our use of the world´s natural resources”, September 2009, http://www.foe.co.uk/sites/default/files/downloads/overconsumption.pdf

7 World Business Council for Sustainable Development, “Sustainable Consumption Facts and Trends: From a business perspective”, http://www.wbcsd.org/pages/edocument/edocumentdetails.aspx?id=142, accessed January 7, 2016

8 Ibid

9 Earth Overshoot Day 2015, “What is Earth Overshoot?”, http://www.overshootday.org/, accessed January 7, 2016

10 Ibid

11 Friends of the Earth Europe, Friends of the Earth Austria and Sustainable Europe Research Institute, “Overconsumption?: Our use of the world´s natural resources”, September 2009, http://www.foe.co.uk/sites/default/files/downloads/overconsumption.pdf

12 Global e-Sustainability Initiative and Accenture, “#SMARTer2030: ICT Solutions for 21st Century Challenges”, 2015, http://smarter2030.gesi.org/downloads/Full_report.pdf

13 Working Group I to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, IPCC, “Summary for Policymakers. In: Climate Change 2013: The Physical Science Basis”, 2013, http://www.climatechange2013.org/images/report/WG1AR5_SPM_FINAL.pdf

14 MarketsandMarkets, “Biodegradable Plastics Market by Type, by Application - Global Trends and Forecasts to 2020”, August 2015, http://www.marketsandmarkets.com/Market-Reports/biodegradable-plastics-93.html, accessed January 7, 2016

15 Global Industry Analysis, Inc., “The Global Automotive Parts Remanufacturing Market: Trends, Drivers and Projections”, January 2015, http://www.strategyr.com/MarketResearch/Automotive_Parts_Remanufacturing_Market_Trends.asp, accessed January 7, 2016

16 Dr. Maximilian Martin, Impact Economy, “Creating Sustainable Apparel Value Chains A Primer on Industry Transformation”, December 2013, http://www.impacteconomy.com/papers/IE_PRIMER_DECEMBER2013_EN.pdf

Re-organize manufacturing supply chains to receive greater proportion of non-virgin and recycled material inputs

Utilize digital technologies to develop shared utilization models

Drive investments to set up processes for adopting circular models

Create cross sector partnerships and tie-ups with technical institutions to identify shared utilization models

Enable data systems to trace recycled and recovered waste streams of input materials

Enable businesses to effectively track the end of life of product used by customers

Scale up the service or leased model by investing for long term success

Leverage partnerships across the value chain to enable reverse logistics to receive end of life products from customers

Leverage data systems to run predictive analytics, identify opportunities to extend product as a service

Develop processes and capabilities to transform end of life products into re-useable products

Drive investments in R&D (to identify potential avenues for transforming existing used products)

Create partnerships across multiple sector supply chains to receive and transform waste and used products

Enabling ecosystem required for implementation

Figure 77: Illustrative enablers required to drive value creation through responsible consumption and production business models

Maximize resource efficiency

Offer product as a service

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Transform products

Critical and Short TermScale and Long Term

$

135

• Implement the 10-year framework of programmes on sustainable consumption and production, all countries taking action, with developed countries taking the lead, taking into account the development and capabilities of developing countries

• By 2030, achieve the sustainable management and efficient use of natural resources

• By 2030, halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses

• By 2020, achieve the environmentally sound management of chemicals and all wastes throughout their life cycle, in accordance with agreed international frameworks, and significantly reduce their release to air, water and soil in order to minimize their adverse impacts on human health and the environment

• By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse

• Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle

• Promote public procurement practices that are sustainable, in accordance with national policies and priorities

• By 2030, ensure that people everywhere have the relevant information and awareness for sustainable development and lifestyles in harmony with nature

• Support developing countries to strengthen their scientific and technological capacity to move towards more sustainable patterns of consumption and production

• Develop and implement tools to monitor sustainable development impacts for sustainable tourism that creates jobs and promotes local culture and products

• Rationalize inefficient fossil-fuel subsidies that encourage wasteful consumption by removing market distortions, in accordance with national circumstances, including by restructuring taxation and phasing out those harmful subsidies, where they exist, to reflect their environmental impacts, taking fully into account the specific needs and conditions of developing countries and minimizing the possible adverse impacts on their development in a manner that protects the poor and the affected communities

Responsible consumption and production

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/sustainable-consumption-production/

Accelerated climate action presents an opportunity for clean energy solutions

Global climate action must be scaled to mitigate the increasing frequency and impacts of climate-related events

What does this mean for businesses?

Businesses must focus on and invest in developing clean and e�cient energy solutions in partnership with cross-industry players

SaskPower has developed the world’s first and largest commercial-scale CCS project with capabilities to lower SO2 emissions by almost 100% and CO2 by 90%.

Agreement by 195 nations at COP21 to keep global temperature rise below 2 degrees Celsius

2 degrees

IMPACT OF COLLABORATION

35% reduction in carbon emissions from 1990 levels through collective e�orts

GLOBAL TEMPERATURE

Launch new products and diversify revenue streams

Climate action

Reduce resource dependence and minimize emissions

ELECTRIC VEHICLES

20 mn are estimated to be on the road by 2020

RENEWABLE ENERGY

17% surge in investments by 2014 to $270 bn

137Data and figures collected as part of secondary research conducted by Accenture Strategy All references and additional details can be found at the end of this chapter on page 144

138

Climate action

Increase in natural calamitiesIncreased occurrences of floods, changing weather patterns, rising sea levels and other natural disasters are some of the noticeable impacts of climate change—particularly global warming, which is driven by the radical increase in greenhouse gas emissions from human activities. These emissions are now at their highest levels in history and are expected to rise further if no mitigating action is taken.

• Global temperatures: With the historic agreement at the end of 2015 at COP21 in Paris, over 195 nations have charted out the path to keep the global temperature rise to below 2 degrees Celsius1

• Rise in mean sea level: The mean sea level rose by 6 cm during the 19th century and 19 cm in the 20th century2

Shift to a low-carbon economyBy decoupling economic growth from the use of fossil fuels, the international community could mitigate catastrophic climatic changes to a significant degree. Countries have already started positioning themselves to transform into a low-carbon economy as a part of their national climate change mitigation strategy, but much support is needed from the private sector to make this happen. For their part, governments in certain countries need to withdraw the subsidies on the consumption of fossil fuels extended to businesses. Shifting from conventional to renewable power sources will be the most significant, transformative initiative that can be implemented.

• Collaboration: Through collective efforts across sectors, a shift to a low-carbon economy could reduce GHG emissions by 35 percent compared with 1990 levels3

• Leverage ICT technology to reduce emissions: ICT has the potential to cut global CO2 emissions by 20 percent by 2030.4 This can make a significant contribution to achieving the commonly agreed objective of containing the rise of global temperatures to a maximum of 2 degrees Celsius5

Unbalanced action against climate changeIn 1997 the Kyoto Protocol, an effort to put in place a mechanism to reduce carbon emissions, was agreed. Although 192 countries have ratified the commitment, major emitting countries such as US, China and India have not, spreading the burden of reduction commitments unevenly. Therefore, even if some countries deploy concerted efforts to reduce their emissions levels, it is still not sufficient to offset the negative impact on climate caused by the alarming levels of GHG emission by non-contributing nations. However, post the COP21 which was recently held in Paris, there is optimism that the major emitting nations in the world will together to address the global climate change agenda.

Climate change is a global threat. It affects developed and underdeveloped countries alike, and threatens not only the economy but also the daily lives of people everywhere. Yet despite the evidence of its impact—most notably in the increased occurrence of natural disasters—the world still lacks a united approach to battling climate change. Businesses can play an important role in mitigating future risk, particularly by deploying measures to enhance resource efficiency but also by tapping new revenue streams through clean energy solutions and recycling or reusing waste and emissions.

Mechanism for raising capacity for e�ective planning

Implementation and enforcement of commitments

Integrated policy and planning

Awareness for early adoption and mitigation

Resilience and adaptive capacity

Mitigate future risk through resource e�ciency measures

• Minimize waste generation through process e�ciency• Enable state-of-the-art technology to reduce emissions• Secure license to grow by reducing dependence on fossil based raw material

Uncover new revenue streams through clean energy solutions

• Tap new business opportunities such as carbon trading • Launch new products such as electric vehicles • Capture and recycle emissions or as raw material• Develop new infrastructure such as charging stations

SDG target areas

Illustrative value creation opportunities

139

Detailed targets for the climate action goal is provided at the end of this chapter on page 145

Turning challenges and trends into opportunitiesThe private sector has been cognizant of these key trends and many of the SDG targets and is looking to convert them into commercial opportunities that help deliver both favorable societal and business outcomes.

Figure 78: Key SDG target areas and value creation opportunities

140

Creating new products/services with

minimal emissions

TransportationTransportation, a key indicator of economic growth and human welfare, is rapidly increasing around the world as economies and the global middle class grow. This growth has also had significant impacts on climate change due to the emissions released from vehicles. Transportation accounts for about 19 percent of global energy use and about 23 percent of energy-related CO2 emissions.6 These are expected to increase, respectively, by nearly 50 percent by 2030 and 80 percent by 2050 without any intervention.7 Changing transport trends will require wide-spread development, building new infrastructure, and strong policies to encourage the adoption of new technologies.

Implementing low-carbon transport options can create multiple economic and social development benefits, in addition to reducing emissions. These local benefits include improved air quality, safer streets, and reduced poverty. Even though proven technological solutions to curb transport sector emissions exist, they require a fundamental shift in policy and financial support to make sustainable, low-carbon transport projects more attractive.

Combining luxury and sustainability performance to develop the next generation of cars Tesla Motors redefined the face of luxury cars through its electric cars which not only have zero emissions but also the comfort and robustness of a luxury sports car.

• The Tesla Roadster goes more than 200 miles (380 km) on a single charge

• An average person drives about 40 miles (60km) in a day

• Charging the car requires only 40amps which is equivalent of using an oven

• Charging can also be set to be done during off-peak hours

Value drivers

• New revenue streams through new product range

• Strengthening brand image as a responsible company

Key enablers

• Physical infrastructure in form of manufacturing capabilities

• Partnerships with technology players to build solutions

• Financing of R&D activities to promote innovation

Physical infrastructure

Financing and investments

Partnership models

Source: https://www.teslamotors.com/about (accessed January 7, 2016)

Figure 79: Electric vehicle market demand8

20 mn electric vehicles estimated to be on road by 2020

Increased Revenues

Promoting sales through govt. policies, subsidies

and awareness programs

Role of business and key playersBusinesses play an important role in curbing and combating climate change. Transportation, energy and heavy industry companies highlight some of the actions that have had a significant impact to date.

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Combating climate change through carbon capture and storageSaskPower has developed the world’s first and largest commercial-scale CCS project that demonstrates a viable technical, environmental and economic case for the continued use of coal. The Boundary Dam CCS Project rebuilt a coal-fired generation unit with carbon capture technology, resulting in low-emission power generation.

• Capable of capturing up to 1 million tonnes of carbon dioxide (CO2) annually

• Capable of reducing the SO2 emissions from the coal process by 100 percent and the CO2 by 90 percent

• Captured CO2 is sold as raw material to other industries

Value drivers

• New revenue streams through sale of by-products

• Reducing risk due to reduced chances of being fined

Key enablers

• Physical infrastructure for capturing and storing carbon

• Heavy investment needed to finance and support this initiative

Source: http://saskpowerccs.com/ccs-projects/boundary-dam-carbon-capture-project/ (accessed January 7, 2016)

Physical infrastructure

Financing and investments

EnergyAmong all sectors that generate greenhouse gases, the electricity and heat generation sector has the highest contribution, accounting for almost 42 percent of global emissions. The need for energy has grown at an unprecedented rate and will continue to grow, straining the consumption of fossil fuels. As a result, a global push is under way toward replacing conventional sources of energy with renewable ones. Some countries have already taken action by enacting policies advocating different forms of clean energy. For their part, utility companies have diversified their portfolio to include more renewable energy.

In addition to incorporating renewable energy, both oil and gas companies have begun exploring innovations in energy efficiency and operational improvements to reduce emissions. One such innovation is the carbon capture and storage system that can capture most of the GHG emissions generated from burning coal. Although this is an expensive process, it’s an important tool oil and gas companies can use to minimize carbon emission risk.

Sale of new infrastructure and equipment such as solar

panels, batteries etc.

Figure 80: Renewable energy investments9

Renewable energy investments surge by 17% to

$270 bn in 2014

Increased Revenues

Additional revenue streams from value added services to

support renewable power

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Figure 81: Demand for industrial goods12

By-products can be sold as raw material

for other industries

Demand for industrial goods will DOUBLE by 2050 and emissions will increase by

90% if unchecked

Increased Revenues

New services offerings in the form of equipment rental, maintenance etc.

Heavy industryBoth developed and developing countries are highly dependent on industrial products to grow their economies. But industrial processes are energy intensive and, in fact, account for 40 percent of global emissions.10 It has been estimated that demand for manufactured goods will at least double by 2050 (relative to 2006 levels) and, if industrial emissions remain unchecked, total CO2 emissions are projected to increase by up to 90 percent by 2050 compared with 2007.11

Although industries have begun efforts to reduce energy consumption, their impact has been offset by the increased total production of goods to meet demand. A step-by-step approach to reducing emissions, accompanied by a sustained and focused effort, is essential. M2M, digital technologies, process redesigns, and state-of-the-art technology are some of the key tools that can help private-sector players derive business value from emission-reduction initiatives.

Addressing climate change through innovation The production of every tonne of primary steel results in approximately two tonnes of CO2. Around 90 percent of these emissions come from the primary blast furnace which accounts for 60-65 percent of steelmaking. ArcelorMittal has leveraged innovation and recycling to reduce emissions. Its Top Gas Recycling (TGR) project at Eisenhuettenstadt, Germany is one of the first in the world.

• Separation of carbon dioxide from other gases as they come out of furnace

• Recycling of the CO2 free emissions for steel production

• Reduction of CO2 emissions by 16 percent

Value delivered

• Improving brand positioning due to adoption of new technologies to reduce emissions

• Reduced cost due to recycling of gases back into furnace

Key enablers

• Physical infrastructure to set up recycling and CO2 separation facilities to help provide sanitation supplies

• High investments to set up recycling facilities and to support R&D

Source: https://www.lkab.com/Global/Documents/EBF%20publications/2012/Top%20Gas%20recycle%20blast%20furnace%20development%20fro%20low %20CO2%20ironmaking.pdf (accessed January 7, 2016)

Physical infrastructure

Financing and investments

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Figure 82: Key value creation opportunities for combating climate change

Mitigate future risk through

resource efficiency

Unravel new revenue streams through

clean energy

• Leverage innovation to redesign equipment

• Promote recycling and carbon capture

• Train of employees to advocate minimal use of resources

Arcelor Mittal has redesigned the top blast furnace at one of its plants as pilot to reduce CO2 emissions by 16 percent

• Promote new business models such as carbon trading

• Launch new products such as electric cars and electric batteries for industrial use

Telstra is rolling out new products in the automotive segment such as luxury electric sports cars

SummaryClimate change is a global challenge that is not limited to a country or a continent. Emissions in one corner of the world can affect people everywhere. A sustained and dedicated effort is needed at the international level among countries and companies to develop and implement solutions that will move the world toward a low-carbon economy. A focus on renewable energy, leveraging innovation to drive better emission solutions, and increasing accountability are some of the key areas on which businesses can focus on to help the world achieve its climate goals while deriving business value.

Value creation opportunities

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144

Develop infrastructure to deliver services such as electric cars, carbon trading etc.

Leverage digital platform to scale up the reach and adoption of better products

Invest in R&D to discover superior solutions for carbon abatement

Form multi-sectoral partnership to collaborate technical expertise and assets

Use data to track and monitor the growth and success of the new initiatives

Set up infrastructure for recycling, carbon capture etc.

Replace outdated equipment with newer machinery

Roll out online training for employees on minimizing resource consumption

Capital investments required to fund infrastructure upgrades and R&D

Drive cross-industry partnerships to identify and adopt cutting edge solutions for resource efficiency

Enable data systems to help identify and track recycled emissions, CO2 capture etc. and take corrective action

Enabling ecosystem required for implementation

Figure 83: Illustrative enablers required to drive value creation while strengthening the climate action response

Unravel new revenue streams through clean

energy solutions

Mitigate future risk through

resource efficiency

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Critical and Short TermScale and Long Term

Chapter endnotes1 United Nations Framework on Climate Change,

“Historic Paris Agreement on Climate Change: 195 Nations Set Path to Keep Temperature Rise Well Below 2 Degrees Celsius”, December 12, 2015, http://newsroom.unfccc.int/unfccc-newsroom/finale-cop21/, accessed January 7, 2016

2 S. Jevrejeva, J. C. Moore, A. Grinsted and P. L. Woodworth, Geophysical Research Letters, “Recent global sea level acceleration started over 200 years ago?”, 2008, http://citeseerx. ist.psu.edu/viewdoc/download?doi=10.1.1.178. 7972&rep=rep1&type=pdf

3 McKinsey&Company, “Pathways to a Low-Carbon Economy”, 2009, http://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/sustainability/cost%20curve%20pdfs/pathways_lowcarbon_economy_version2.ashx, accessed January 7, 2016

4 Global e-Sustainability Initiative and Accenture, “#SMARTer2030: ICT Solutions for 21st Century Challenges”, 2015, http://smarter2030.gesi.org/downloads/Full_report.pdf

5 Ibid

6 International Energy Agency, “Moving Towards Sustainability: Transport, Energy and CO2”, 2009, https://www.iea.org/publications/freepublications/publication/transport2009.pdf

7 Ibid

8 Clean Energy Ministerial, Electric Vehicles Initiative and International Energy Agency, “Global EV Outlook: Understanding the Electric Vehicle Landscape to 2020”, April 2013, https://www.iea.org/publications/globalevoutlook_2013.pdf

9 Bloomberg New Energy Finance and Frankfurt School- United Nations Environment Programme Collaborating Centre for Climate & Sustainable Energy Finance, “Global Trends In Renewable Energy Investment 2015”, 2015, http://fs-unep-centre.org/sites/default/files/attachments/key_findings.pdf

10 Dr Tamaryn Brown, Ajay Gambhir, Dr Nicholas Florin and Dr Paul Fennell, Grantham Institute for Climate Change, Imperial College, London, “Reducing CO2 emissions from heavy industry: a review of technologies and considerations for policy makers”, February 2012, https://www.imperial.ac.uk/media/imperial-college/grantham-institute/public/publications/briefing-papers/Reducing-CO2-emissions-from-heavy-industry---Grantham-BP-7.pdf

11 Ibid

12 International Energy Agency, “Energy Technology Perspectives 2010: Scenarios & Strategies to 2050”, 2010, https://www.iea.org/publications/freepublications/publication/etp2010.pdf

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• Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries

• Integrate climate change measures into national policies, strategies and planning

• Improve education, awareness-raising and human and institutional capacity on climate change mitigation, adaptation, impact reduction and early warning

• Implement the commitment undertaken by developed-country parties to the United Nations Framework Convention on Climate Change to a goal of mobilizing jointly $100 billion annually by 2020 from all sources to address the needs of developing countries in the context of meaningful mitigation actions and transparency on implementation and fully operationalize the Green Climate Fund through its capitalization as soon as possible

• Promote mechanisms for raising capacity for effective climate change-related planning and management in least developed countries and small island developing States, including focusing on women, youth and local and marginalized communities

Climate action

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/climate-change-2/

Depletion of ecosystems has created attractive business opportunities for sustainable fishing

Increasing risk to marine ecosystems has made the need for sustainable fishing more urgent

What does this mean for businesses?

Businesses may need to develop transparent and traceable supply chain as well as a sustainable sourcing infrastructure

Yooji has launched the first ever baby food to bear the Marine Stewardship Council (MSC) ecolabel. The new frozen protein are portions made of 100% MSC-certified flaked cod.

people depend on fish as a source of protein

3bnPotential for stock of all fished species to collapse by 2048

SUSTAINABLE FISHING

Eco-labeled fishery product increased

147% between 2010 and 2014

MAJOR SOURCE OF FOOD RISK OF DEPLETION

Leverage technology to make sourcing sustainable 

Life below water

Unlock potential revenue through labeling and charging premium prices 

MARKET SIZE

Eco-labeled seafood currently is a $4.8 bn retail market

100%

PROFITABILITY

Potential for fishing sector to boost profits by $51 bn with sustainable fishery policies within 10 years

147Data and figures collected as part of secondary research conducted by Accenture Strategy All references and additional details can be found at the end of this chapter on page 154

148

Life below water

Depletion of marine ecosystemsTechnological innovations and the emergence of new economic opportunities such as deep sea mining, more intensive fishing, and deeper oil and gas drilling have increased the risk to areas that historically were not under threat.

• Around 60 percent of the world’s major marine ecosystems that underpin livelihoods have been degraded or are being used unsustainably¹

• Between 30 percent and 35 percent of global critical marine habitats such as seagrasses, mangroves and coral reefs are estimated to have been destroyed1

• More than 3 billion people rely on fishes as a major source of protein2

• Stocks of all species currently commercially fished are predicted to collapse by 20483

Emergence of sustainable fishingDemand for seafood and advances in technology have led to fishing practices that are depleting fish and shellfish populations around the world. Recent trends have indicated that about one-third of the resources on which fishers depend are overfished globally. The recent decade has seen organizations across the world adopting sustainable fishing as the solution to combat this challenge.

• Growing importance of the two key sustainable fishing certifications – i.e., Marine Stewardship Council (MSC) for wild-caught fish and the Aquaculture Stewardship Council (ASC) for responsibly farmed seafood

• Currently, more than 28,000 products are certified and carry the MSC label, and MSC-certified fisheries deliver close to 10 percent of the global harvest (8.8 million metric tonnes) of wild-capture fisheries4

• MSC-certified and eco-labelled fishery products increased by 147 percent between 2010 and 20145

The myth that oceans are limitless source of natural resources has been dispelled, and international organizations are partnering with businesses to preserve the oceans and their resources.

Oceans are under huge environmental stress due to growing world population, rampant consumerism, overfishing, and pollution caused by industrialization. By 2100, unless significant changes are made in how we treat our oceans, more than half of the world’s marine species may be on the brink of extinction due to the collapse of the underwater ecosystem.1 Yet there’s clearly a desire among consumers for sustainably sourced seafood—demand companies can capitalize on by minimizing their sourcing from endangered ecosystems to secure future supply and promoting the sale of traceable, certified products.

Figure 84: Key SDG target areas and value creation opportunities

Turning challenges and trends into opportunitiesThe private sector has been cognizant of these key trends and are looking to convert them into commercial opportunities that will help deliver both favorable societal and business outcomes.

Detailed targets for the life below water goal is provided at the end of this chapter on page 155

Enhance economic benefit from marine

resources

Conserve and implement of marine laws

Regulate and protect fisheries

Promote research and development

Ensure protection of marine eco-system

Unlock new revenue streams through traceable and certified products

• Label products with source and origin information to meet customer expectations

• Charge premium pricing for certified products

Minimize sourcing from endangered ecosystems to secure future supply

• Leverage technology and innovation to redesign sourcing processes to make it sustainable

• Reduce or eliminate sourcing from endangered ecosystems to ensure availability of fishes in the future

Leverage innovation to identify sustainable ways to secure marine products

Sale of marine products that have been sourced sustainably

SDG target areas

Illustrative value creation opportunities

149

150

FisheriesFisheries is the key industry sector that taps into the resource-rich aquatic environments across the world. The industry is extremely fragmented, with more than 18.9 million fish farmers in the world accounting for 90 percent of small-scale producers in developing countries. This creates a grave challenge in terms of creating a concerted effort toward ensuring the sustainable and responsible production of sea food. However, sustainable fishing is gaining popularity among large commercial fisheries, especially

after societal push for certification from programs such as Marine Stewardship Council (MSC) and the Aquatic Stewardship Council (ASC). It is helping fisheries expand their current product range and increase their margins for in-demand sustainably sourced and fished seafood products.

By adopting sustainable fishing practices, the fisheries industry can restructure its age-old biologically unsustainable production and help ensure the continuity of commercial fishing.

Creating a globally accepted certification for sustainably sourced seafoodThe MSC is a market based initiative driving two key standards for sustainable and traceable sea food products by working with fisheries, retailers and customers fishing practices:

• MSC Fisheries Standard - represents the sustainability of wild-capture fisheries

• MSC Chain of Custody Standard – represents the traceability of a certified product

Value delivered

• Create demand and platform for new seafood products

• Help fisheries secure their long term supply of marine products

Key enablers

• Partnerships to adopt sustainable fishing practices

• Data to develop traceability solutions to ensure authenticity of the MSC label

Data and accountability

Partnership models

Source: https://www.msc.org/about-us (accessed January 7, 2016)

Role of business and key playersBusinesses are critical in shaping the current and future life-below-water landscape. In particular, fisheries, consumer goods companies, and retailers are teaming up to target opportunities in this area.

Figure 85: Retail value of certified sustainable seafood6

$4.8 bn Current Retail Value of Marine Stewardship Council certified sustainable seafood

Figure 86: License to operate through sustainable fishing practices7

More than

33% of commercial fisheries globally have collapsed

Reduce Risks

Protect supplies by adopting sustainable fishing practices

Secure long-term license to operate by protecting

endangered species and eco-system

Increase Revenues

Increase in sales from sustainably produced and certified seafood products

Seek higher margin for certified seafood products

151

Consumer goodsTo be sustainable and competitive, consumer goods companies need to satisfy the demand of the growing number of socially conscious consumers. With education and awareness levels increasing, consumers are more sensitive to and informed of sustainability issues and are keen to trace products back to their origins. This trend has a strong implication for companies’ supply chains.

As a consequence, companies are investing in traceability and certification programs to give consumers the information they want and establish greater credibility. This enables organizations with certified and traceable sustainable products to better manage and mitigate their downstream risks.

Developing the world’s first MSC certified baby food productYooji, a French Company, launched the first ever baby food to bear the MSC ecolabel enabling the youngest consumers to play their part in safeguarding oceans.

• New frozen protein portions made of 100 percent MSC certified flaked cod

Currently there is a rapid rise in the profile of MSC in France. Since 2010, the value of MSC labelled products in the country has quadrupled. Surely, the times are exciting and opening up new sectors for forward looking food manufacturers.

Value delivered

• Generate new demand for eco labelled baby food produced from seafood

• Mitigate downstream supply risk of cod depletion

Key enablers

• Partnerships to source seafood through sustainable practices

Source: https://www.msc.org/newsroom/news/the-world-s-first-msc-certified-babyfood-product (accessed January 7, 2016)

Partnership models

Figure 87: Sustainable fishing growth opportunity and business case8,9

Global sustainable fishery policies could raise profits in the fishing sector by

$51 bn a year

Increase Revenues

Offer a range of marine products that are

sustainably produced

Command a premium for sustainably produced

seafood products

147% increase in MSC eco-labelled products between 2010 and 2014

Enhance Intangibles

Build consumer loyalty and preference through innovative

and healthy products

Reduce Risks

Mitigate downstream risk through MSC certifications

152

RetailWith seafood, environmental sustainability and business success can go hand in hand. Retailing seafood products that are caught or raised in an environmentally sensitive manner not only benefits the health of the oceans but also provides many opportunities to improve the growth and sustainability of seafood businesses. Consumer appetite for responsibly bred seafood is on the rise and so is the desire to trace it back to its origin. With such key trends affecting the industry, it becomes critical for various food retailing chains to focus their attention on sustainable ways of sourcing their products and, at the same time, invest in initiatives to do their part for marine conservation. Such investments will not only provide tangible benefits in terms of sales increases, but also intangible benefits in the form of a more loyal and supportive customer base.

Retail has also adopted the ability to trace the origin of seafood from cradle to grave to enhance the success of sustainable fishing. Organisations such as MSC, along with proper labelling protocol, have also helped by providing statistics and data to ensure that sources are not depleted, thus reducing risk to the seafood stock.

Figure 88: Growing preference for certified seafood amongst consumers10

Driving traceability in the seafood supply chainTesco is playing its part in sustaining the livelihoods of millions of marine organisms through its initiatives. Tesco is actively ensuring adoption of various mandates by several bodies ensuring its full participation and support in marine conservation:

• Adopted a sustainable seafood policy with recommendations from Marine Stewardship Council and Marine Conservation Society

• Developing a system in collaboration with Sustainable Fisheries Partnership to evaluate the sustainability quotient of all their fisheries

• Embraced detailed labelling protocol with key information winning consumer confidence

Value delivered

• Build demand for non-endangered seafood

• Minimize supply risk by ensuring sustainability of fisheries

Key enablers

• Data and traceability information solutions to ensure the authenticity of the MSC label

• Partnerships to facilitate transparency and traceability

Source: http://realfood.tesco.com/our-food/sustainable-fish-sourcing.html (accessed January 7, 2016)

Data and accountability

Partnership models

71%of UK’s respondent believe it is important that supermarkets sell sustainably caught seafood

Increase Revenues

Increase in demand for certified seafood

Lower Risks

Reduce supply chain risk by protecting ecosystems

153

Figure 89: Key value creation opportunities for securing life under water

Unlock new revenue streams through traceable and

certified products

Minimize sourcing from endangered

ecosystems to secure future supply

• Increase in demand for sustainably cultivated marine goods

• Create awareness among customers through labelling

• Command a premium pricing for traceable and certified goods

Yooji has launched the world’s first MSC certified baby food product

• Minimize sourcing of endangered fishes

• Improvise equipment and process for sustainable fishing

• Setup public-private partnerships for innovation and investment in sustainable fisheries

Tesco along with Sustainable Fisheries Partnership is working to evaluate the sustainability quotient of fisheries

SummaryThe marine ecosystem is responsible for generating and regulating most of the atmospheric gases required for sustaining life, mitigating climate change, and providing much of the world with a vital food source and a pharmacopoeia of potential medicines. Businesses and communities around the world are working together to not only support the marine environment in terms of recovery, but also to create sustenance for a large section of the global population.

Value creation opportunities

154

Chapter endnotes1 United Nations Educational, Scientific and

Cultural Organization and International Oceanographic Commission, “Facts and figures on marine biodiversity”, http://www.unesco.org/new/en/natural-sciences/ioc-oceans/priority-areas/rio-20-ocean/blueprint-for-the-future-we-want/marine-biodiversity/facts-and-figures-on-marine-biodiversity/, accessed January 7, 2016

2 The World Wide Fund for Nature, “Working for sustainable fishing”, http://wwf.panda.org/what_we_do/how_we_work/conservation/marine/solutions/sustainable_fisheries/, accessed January 7, 2016

3 The World Wide Fund for Nature, “Unsustainable fishing”, http://wwf.panda.org/about_our_earth/blue_planet/problems/problems_fishing/, accessed January 7, 2016

4 Marine Stewardship Council, “15 years of certified sustainable seafood: Annual Report 2014-15”, https://www.msc.org/documents/msc-brochures/annual-report-archive/annual-report-2014-15-english

5 Marine Stewardship Council, “The increasing appetite for sustainable seafood”, https://www.msc.org/multimedia/images/business-support/msc-consumer-survey-2014-global-infographic, accessed January 7, 2016

6 Ibid

7 The World Wide Fund for Nature, “Working for sustainable fishing”, http://wwf.panda.org/what_we_do/how_we_work/conservation/marine/solutions/sustainable_fisheries/, accessed January 7, 2016

8 Marine Stewardship Council, “15 years of certified sustainable seafood: Annual Report 2014-15”, https://www.msc.org/documents/msc-brochures/annual-report-archive/annual-report-2014-15-english

9 Environmental Defense Fund, Bren School Of Environmental Science & Management, University of California Santa Barbara, “The Potential For Global Fish Recovery: How Effective Fisheries Management Can Increase Abundance, Yield And Value”, https://www.edf.org/sites/default/files/content/upside-model-report-summary.pdf

10 Marine Stewardship Council, “Vast majority of British consumers expect retailers and restaurants to provide sustainable seafood options: survey”, November 13, 2014, https://www.msc.org/newsroom/news/vast-majority-of-british-consumers-expect-retailers-and-restaurants-to-provide-sustainable-seafood-options-survey, accessed January 7, 2016

Integrate fisheries and retailers to ensure traceability of products

Use digital platforms to help customers, suppliers and retailers track source of seafood

Partner with various stakeholders across supply chain to facilitate transparency

Set up machinery and equipment to procure fishes sustainably

Leverage remote sensing technology to identify endangered fishes and their locations

Invest in R&D to develop new methods to scale up sustainable fisheries

Set up partnerships across certification bodies like MSC, ASC and fisheries

Develop data systems to monitor performance of fisheries and fish stocks

Enabling ecosystem required for implementation

Figure 90: Illustrative enablers required to drive value creation while protecting life below water

Unlock new revenue streams through traceable and

certified products

Minimize sourcing from endangered

ecosystems to secure future supply

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Critical and Short TermScale and Long Term

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• By 2025, prevent and significantly reduce marine pollution of all kinds, in particular from land-based activities, including marine debris and nutrient pollution

• By 2020, sustainably manage and protect marine and coastal ecosystems to avoid significant adverse impacts, including by strengthening their resilience, and take action for their restoration in order to achieve healthy and productive oceans

• Minimize and address the impacts of ocean acidification, including through enhanced scientific cooperation at all levels

• By 2020, effectively regulate harvesting and end overfishing, illegal, unreported and unregulated fishing and destructive fishing practices and implement science-based management plans, in order to restore fish stocks in the shortest time feasible, at least to levels that can produce maximum sustainable yield as determined by their biological characteristics

• By 2020, conserve at least 10 percent of coastal and marine areas, consistent with national and international law and based on the best available scientific information

• By 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, eliminate subsidies that contribute to illegal, unreported and unregulated fishing and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the World Trade Organization fisheries subsidies negotiation

• By 2030, increase the economic benefits to Small Island developing States and least developed countries from the sustainable use of marine resources, including through sustainable management of fisheries, aquaculture and tourism

• Increase scientific knowledge, develop research capacity and transfer marine technology, taking into account the Intergovernmental Oceanographic Commission Criteria and Guidelines on the Transfer of Marine Technology, in order to improve ocean health and to enhance the contribution of marine biodiversity to the development of developing countries, in particular small island developing States and least developed countries

• Provide access for small-scale artisanal fishers to marine resources and markets

• Enhance the conservation and sustainable use of oceans and their resources by implementing international law as reflected in UNCLOS, which provides the legal framework for the conservation and sustainable use of oceans and their resources, as recalled in paragraph 158 of The Future We Want

Life below water

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/oceans/

Forest management presents new product and market opportunities

Heightened stress on land ecosystems has increased the need for sustainable forest management

What does this mean for businesses?

Businesses need to develop capabilities for maximizing output and recovering value from used products through cross-sector partnerships

FOREST MANAGEMENTPlanted forest areas covers only

7% of the world's total forest area

Set up monitoring and security mechanisms to minimize variability in the ecosystem's social and environmental value

Life on land

Use innovation to minimize waste and maximize resource e�ciency and reuse 

CERTIFIED WOOD

Certified wood products globally carry a 15% to 25% price premium

BIOFUELS

Second-generation biofuels have a $23.9 bn global market value

TetraPak has developed and sold the world’s first fully renewable high-performance food packaging carton that uses FSC-certified paperboard and plastic derived from natural sugarcane.

“At risk” species face extinction at 1,000 times the natural rate

hectares of forest was lost worldwide between 2000 and 2010 to meet global growth demand

13mn

STRESSED ECOSYSTEMS INCREASING DEMAND

1,000 times

157Data and figures collected as part of secondary research conducted by Accenture Strategy All references and additional details can be found at the end of this chapter on page 163

158

Life on land

Rapid urbanization is leading to land degradationConversion of Earth’s land surface to urbanization has been responsible for one of the most irreversible negative effects on the biosphere. Some of the visible consequences include loss of farmlands, effect on local climate (deforestation accounts for 15 percent of the global emissions), fragmented habitats and threat to biodiversity.2 Furthermore, urban land expansion rates have been higher than or equal to urban population growth, suggesting urban growth is becoming more expansive than compact.

Increasing stress on bio-diversityThe stress on flora and fauna systems across the world is increasingly rapidly, leading to a rapid decline in biodiversity; with many species becoming extinct. It is currently estimated that out of the 8,300 animal breeds which have once been identified, over 8 percent are now extinct and 22 percent are at risk of extinction.3 It is further estimated that extinction rate for at risk species is about 10,000 times than the natural rate.4

Forests and land are vital to providing the food, materials, and products our livelihoods depend on. Yet they are under massive stress and, in the case of forests, rampant depletion is now the norm. Between 2000 and 2010, 13 million hectares of forest were lost worldwide to satisfy the growing needs of humans.1 Biodiversity is also on the decline. To reduce these significant threats to land, companies must think creatively about process and business model changes they can make to protect the forest ecosystems for long-term viability, support bio-diversity, and minimize and reuse waste streams.

Improving sustainable forest managementDespite the ever-growing demand for wood and other forestry products, the rate of net forest loss has been reduced by over 50 percent.5 Furthermore, the total area of planted forests has increased by over 110 million hectares from 1990 to 2015 and now covers about 7 percent of the world’s total forest area.6

The amount of forest planted annually increased from 3.6 million hectares per year in the period from 1990 to 2000 to 5.2 million hectares per year from 2000 to 2010.7

Figure 91: Key SDG target areas and value creation opportunities

Turning challenges and trends into opportunities

Detailed targets for the life on land goal is provided at the end of this chapter on page 164

Maintain bio-diversity and protect

endangered flora and fauna species

Restore degraded land and prevent desertification

Promote sustainable forest management

Finance sustainable forestry and bio-diversity

protection activities

Conservation of inland and terrestrial aquatic ecosystems

Promote innovation to enhance forest resource maximisation

• Minimizing waste streams through process e�ciency• Minimizing raw material inputs by focusing on innovation • Greater use of non-virgin and recycled materials in production

Secure and manage end to end land ecosystems

• Set up monitoring mechanisms to assist in managing the health of various support ecosystem and biological process supporting forests

• Maximize the economic and social value from forests through ecosystem management services without a�ecting their long term variability

• Establish and supporting the development of unified certification systems to enable customers to identify sustainably grown and harvested wood and wood products

SDG target areas

Illustrative value creation opportunities

159

160

15% to 25% in price premium for FSC certified wood from across different global markets

Increased Revenues

New revenue streams to address the new market for responsible grown,

harvested and sourced wood

Stronger Intangibles

Brand creation as market innovator with responsible

and traceable products

ForestryForestry businesses are in a unique position, as sensitive ecosystems are at the core of their value chain. Thus, they require a more holistic approach to managing the entire forest ecosystem:

Sustainable forestry certification

A number of these businesses are working toward reducing their impact on forests and securing long-term viability by certifying forestlands and products to reduce illegal and unsustainable wood production. A number of certification initiatives, such as Sustainable Forestry Initiative (SFI), Forest Stewardship Council (FSC) standard and the Programme for the Endorsement of Forest Certification (PEFC), have helped in this regard.

Eco-system maintenance

Many businesses are seeking to treat forests as a thriving and sustainable ecosystem rather than a material input to produce finished goods and products. Organizations are taking active steps through initiatives around ecosystem replenishments to manage the overall balance. Additionally, strategic initiatives such as watershed management, soil nutrition and recovery can serve as critical tools in restoring ecosystems.

Forests as carbon sinks

With the pressure intensifying globally to meet the 2 degree scenario (2DS), forests are a viable and long-term option for carbon mitigation and sequestration. Businesses now understand the tremendous potential that forests offer to reduce carbon dioxide levels compared with more expensive and emerging carbon capture and storage (CCS) technologies.

Protecting forests by addressing ecosystem performanceWeyerhaeuser has been at the forefront of pushing the sustainable forest management agenda in the global forestry industry. Close to 198,127 acres of forest land is managed according to third party sustainable forestry standards.

• Forest Certification: Ensuring that all the forests based products are certified thereby giving them a competitive advantage in the market (PEFC, SFI, ATFS)

• End to End ecosystem services: The company takes a system perspective of the entire forest ecosystem and the supporting biological processes

Value delivered

• Generating new revenue streams and increased premium from sales of certified wood and wood products

• Strengthening brand recognition as a long term market player with an ecosystem perspective

Key enablers

• Physical infrastructure in form of procuring and developing sustainable forests and harvesting methodologies

• Financing to acquire large tracts of forest land and continued investments to protect and nurture them in the long term

Source: http://www.weyerhaeuser.com/sustainability/our-commitment/our-approach/ (accessed January 7, 2016)

Role of business and key playersBusinesses are critical to meeting the Life on Land SDG. The forestry and pulp and paper sectors, in particular, hold the greatest promise due to the scale of their related activities.

Figure 92: Certified wood and wood products opportunity8,9

16.6%of world’s total industrial round-wood production is FSC certified

Physical infrastructure

Financing and investments

$

161

Pulp, paper and packagingPulp, paper and packaging industries rely heavily on wood fiber and associated products. These industries have traditionally followed a linear consumption model, but are now moving toward a more circular consumption model with a greater focus on renewability. Another key change in the industry has been the constant demand from consumers to provide certified and traceable products—i.e., packaging and paper products made from sustainably sourced wood pulp and fiber. Businesses in this sector are taking a close look at their supply chain to quantify the potential impact of their business on the entire forest ecosystem:

Enhancing traceability and establishing chain of custody:

Businesses are looking to improve their differentiation in the eyes of the customer through third party certifications like Forest Stewardship Council and Chain of Custody certification to prove to customers that the products are made from sustainably sourced and certified wood products

Developing bio-based packaging and paper material:

Companies are embracing circular economy principles at the product’s inception and development phase. The key focus is to create products and packaging materials that can be easily reused and recycled

Developing the world's first fully renewable cartonTetra Pak has taken the first step in driving circular economy concept in product conceptualization and development. The paperboard used is FSC certified, whereas the plastic used in the carton is high density polythene derived from sugarcane developed by a Brazilian chemical company, Braskem. The carton delivers the same performance as any typical TetraPak carton.

Value delivered

• Generating new revenue streams for customers who prefer sustainable and traceable packaging

• Reducing risks for the company as such products help decarbonize the entire product value chain

Key enablers

• Physical infrastructure in form of procuring and developing sustainable forests and harvesting methodologies

• Financing to acquire large tracts of forest land and continued investments to protect and nurture them in the long term

Figure 93: Biofuels value opportunity and business case10

$23.9 bn value of global 2nd generation (including cellulosic ethanol, biodiesel, biobutanol) biofuels market in 2020

Increased Revenues

Additional revenue streams from using waste materials and other low cost inputs

Stronger Intangibles

Brand creation as market innovator with responsible

and traceable products

Source: http://www.tetrapak.com/sustainability/environmental-innovation/sustainable-products/tetra-rex-bio-based (accessed January 7, 2016)

Physical infrastructure

Financing and investments

$

162

Figure 94: Key value creation opportunities for protecting and nurturing life on land

Promote innovation to enhance

forest resource

Secure and manage end to end

land ecosystems

• Minimize waste streams through process efficiency

• Minimize material inputs by focusing on More with Less

Tetra Pak with its fully renewable carton has significantly lowered the input of virgin materials in the product

• Enhance and developing unified certification systems

• Ecosystem management services to maximize economic and social value from forests

Weyerhaeuser utilizes an end to end ecosystem services methodology to manage forests that are linked to their supply chain

SummaryWood, wood fiber and associated forestry products are an integral part of many products widely used across the world. The forest ecosystems are dwindling despite massive interventions at a country level. Businesses need to focus on delivering value through interventions that protect the forest ecosystems for long-term viability, promote bio-diversity and minimize and reuse waste streams. Such efforts will have a positive impact not only on the threatened forest belt but also on the businesses themselves.

Value creation opportunities

163

Chapter endnotes1 Food and Agricultural Organisation, United

Nations, “Deforestation and net forest area change”, http://www.fao.org/forestry/30515/en/, accessed January 7, 2016

2 The World Wide Fund for Nature, “Threats: Deforestation – Overview”, http://www.worldwildlife.org/threats/deforestation, accessed January 7, 2016

3 United Nations Development Programme, “Goal 15: Life on land: Sustainably manage forests, combat desertification, halt and reverse land degradation, halt biodiversity loss”, http://www.undp.org/content/undp/en/home/mdgoverview/post-2015-development-agenda/goal-15.html, accessed January 7, 2016

4 The World Wide Fund for Nature, “How many species are we losing?”, http://wwf.panda.org/about_our_earth/biodiversity/biodiversity/, accessed January 7, 2016

5 Food and Agriculture Organization, United Nations, “World deforestation slows down as more forests are better managed”, September 7, 2015, http://www.fao.org/news/story/en/item/326911/icode/, accessed January 7, 2016

6 Ibid

7 Food and Agriculture Organization, United Nations, “World deforestation decreases, but remains alarming in many countries”, http://www.fao.org/news/story/en/item/40893/icode/, accessed January 7, 2016

8 Forest Stewardship Council, “FSC-certified wood and products fetch higher prices”, May 30, 2012, https://ic.fsc.org/en/news/id/66, accessed January 7, 2016

9 Forest Stewardship Council, “Global Volume of FSC Wood Produced Annually”, June 2015, https://ic.fsc.org/preview.global-volume-of-fsc-wood-producedannually.a-4920.pdf

10 Allied Market Research, “World Second Generation Biofuels (Advanced Biofuels) Market - Opportunities and Forecasts, 2013 – 2020”, December 2014, https://www.alliedmarketresearch.com/second-generation-biofuels-market

Re-organize manufacturing processes and supply chains to maximise the output (yield) derived from forest products

Drive investments in technologies and capabilities to leverage the use of recycled inputs in process without sacrificing quality of products

Create cross sector partnerships and tie-ups with technical institutions to identify potential for re-use of waste and recovered materials from other supply chains

Enable data systems to help identify recycled and recovered waste streams of input materials

Develop processes and manufacturing capabilities to transform end of life products to re-useable products

Leverage digital as an enabler to scale and connect these services through a unified platform across multiple forest ecosystems

Drive investments to develop R&D and technologies to help better monitor different aspects and health of the forest ecosystem

Create partnerships across multiple sector supply chains to understand long term impact of ecosystem management

Develop integrated data systems to enhance monitoring across different support process and ecosystem

Enabling ecosystem required for implementation

Figure 95: Illustrative enablers required to drive value creation while protecting life on land

Promote innovation to enhance forest

resource maximisation

Secure and manage end to end land

ecosystems

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Critical and Short TermScale and Long Term

$

164

• By 2020, ensure the conservation, restoration and sustainable use of terrestrial and inland freshwater ecosystems and their services, in particular forests, wetlands, mountains and drylands, in line with obligations under international agreements

• By 2020, promote the implementation of sustainable management of all types of forests, halt deforestation, restore degraded forests and substantially increase afforestation and reforestation globally

• By 2030, combat desertification, restore degraded land and soil, including land affected by desertification, drought and floods, and strive to achieve a land degradation-neutral world

• By 2030, ensure the conservation of mountain ecosystems, including their biodiversity, in order to enhance their capacity to provide benefits that are essential for sustainable development

• Take urgent and significant action to reduce the degradation of natural habitats, halt the loss of biodiversity and, by 2020, protect and prevent the extinction of threatened species

• Promote fair and equitable sharing of the benefits arising from the utilization of genetic resources and promote appropriate access to such resources, as internationally agreed

• Take urgent action to end poaching and trafficking of protected species of flora and fauna and address both demand and supply of illegal wildlife products

• By 2020, introduce measures to prevent the introduction and significantly reduce the impact of invasive alien species on land and water ecosystems and control or eradicate the priority species

• By 2020, integrate ecosystem and biodiversity values into national and local planning, development processes, poverty reduction strategies and accounts

• Mobilize and significantly increase financial resources from all sources to conserve and sustainably use biodiversity and ecosystems

• Mobilize significant resources from all sources and at all levels to finance sustainable forest management and provide adequate incentives to developing countries to advance such management, including for conservation and reforestation

• Enhance global support for efforts to combat poaching and trafficking of protected species, including by increasing the capacity of local communities to pursue sustainable livelihood opportunities

Life on land

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/biodiversity/

Rise in conflicts around the world is causing forced displacement and hampering socio-economic development

What does this mean for businesses?

Businesses need to focus on reinstating infrastructure in conflicted regions, leverage digital technologies to disseminate emergency and awareness information and develop partnerships for setting codes of ethics

DISPLACEMENT

59.5 mn people have been forcibly displaced due to various conflicts in 2014

Peace, justice and strong institutions

Help conflicted regions recuperate through infrastructure services and low-cost products

Employ digital vigilance and resilience to protect vulnerable customers

Create partnerships for responsible and ethical sourcing

Safaricom worked closely with various political parties and content service providers in Kenya in 2013 to set guidelines and a systematic process to ensure that inflammatory messages were not spread through bulk messaging services to help address election-related violence and riots.

The number of fatalities due to conflicts increased by a factor of 3.2 between 2008 and 2014

ARMED CONFLICTS

3.2x

166Data and figures collected as part of secondary research conducted by Accenture Strategy

All references and additional details can be found at the end of this chapter on page 172

167

Peace, justice and strong institutions

Forced displacement due to various conflictsIn 2014, more than 59.5 million individuals (including 19.5 million refugees) were forcibly displaced due to persecution, conflict, human rights violations and other sources of violence.1 This is largest displacement ever in a single year in recordable history. In the past five years, annual displacement figures have risen by 40 percent (42.5 million people in 2011), which has far-reaching implications.2

• Stress on developing regions to support refugees: Over 86 percent of the world’s refugees have been provided shelter by the world’s developing economies3

• Increasing proportion of refugees are children: Close to 51 percent of the refugee population in 2014 (up from 41 percent in 2009) are below the age of 18, the highest proportion in the past decade4

• Future economic viability of refugees: As many as 5.9 million refugees currently under the mandate of the United Nations High Commissioner for Refugees (UNHCR) are living in countries with GDP per capita of less than $5,000 and are potentially at risk in terms of their future economic growth and viability5

Increased scale and impact of armed conflictsDespite the decrease in number of active conflicts from 63 in 2008 to 42 in 2014, the number of fatalities has more than tripled from 56,000 in 2008 to 180,000 in 2014.6 This can be partly attributed to the increasingly violent nature of the armed conflicts which, in turn, has led to loss in economic value of the affected regions. It is estimated that the global costs associated with conflicts in 2014 were about $14.3 trillion (or 13.4 percent of the world’s total GDP), which was equivalent to the sum total of economic outputs of UK, Spain, Germany, France, Canada and Brazil.7

Peace, stability and a strong justice system are key constructs of a sustainable future and society. Yet the continued lack of peace and ongoing instability in numerous regions around the world affect millions of people that live in these environments and businesses that operate there. Companies can promote peace and stability with programs that help conflict regions accelerate their recovery (for instance, through infrastructure and employment), as well as partnerships with civil societies and industry peers to develop guidelines for corruption-free and ethical businesses.

Rising conflict for natural resourcesNatural resources often lie at the heart of wars and civil strife. Their increasing scarcity further sharpens such conflicts involving government and militaries. There is typically a strong link between illegal natural resource exploitation and armed conflicts. Conflict regions are facing broader social and economic issues like widespread bribery and corruption, as well as human trafficking and exploitation of women and children.

Figure 96: Key SDG target areas and value creation opportunities

Detailed targets for the peace, justice and strong institutions goal is provided at the end of this chapter on page 173

Build transparent and accountable

global institutions

Reduce armed organized crime,

conflicts and violence

Address corruption and bribery in

all forms

Enable and uphold stronger justice

and legal systems

End abuse, tra�cking and exploitation of children

Accelerate the recovery of conflict regions through low cost products

• Provide infrastructure development in form of basic services: telecom and connectivity

• Combine social responsibility schemes with basic infrastructure services to help people in conflict regions get access to employment opportunities and financial resources

Develop standards for ethical business to minimize operational risks and create di�erentiation

• Utilize partnerships to drive transparency in social investments, tax payments and human rights performance

• Create partnerships to develop di�erentiation between conflict resources and sustainable sourced resources

Create partnerships with civil societies and industry peers to develop guidelines for corruption free and ethical businesses:

O�er products and services catered to meet the needs of conflict regions:

SDG target areas

Illustrative value creation opportunities

Turning challenges and trends into opportunitiesThe private sector has numerous opportunities to advance human rights and anti-corruption standards in conflict-affected and recovering regions of the world through potential commercial value creation opportunities.

168

169

TelecommunicationsTelecommunications companies are using their core competencies to provide connectivity and access to information, an important component in creating more peaceful and inclusive societies:

Drive access to low-cost telecom and secure financial services:

A number of examples include Millicom in Sierra Leone, Roshan in Afghanistan, Mobitel in Sudan, and MTN in Afghanistan, Rwanda and Cameroon, which offer customers access to low-cost telecom and financial services through pre-paid options and mobile banking and transfer services. These provide a way for consumers to conduct everyday transactions without the need for physical cash exchange.

Leverage bulk messaging facilities to provide emergency and relief information services:

For example, Celtel in Sierra Leone is providing a text messaging service like FrontlineSMS that enables people to monitor election results and related violence and help report human rights violations and coordinate with aid providers. MTN Liberia, along with Refugees United (REFUNITE), Ericsson and Lonestar Cell, have launched a mobile application and a large-scale SMS drive to help re-connect families caught in the humanitarian crisis in Liberia and Ivory Coast. The bulk SMS drive is designed to generate awareness of the application in refugee prone areas. The application and SMS facility will serve as a platform to help more than 60,000 refugees separated from families register themselves and search for their estranged family members.8

Ensuring responsible use of bulk messaging services during Kenyan electionsIn preparation for Kenyan elections held in 2013, Safaricom worked closely with various political parties and content service providers in Kenya to ensure that inflammatory messages and communication were not broadcasted through bulk messaging service as was the case in aftermath of 2007 elections resulting in increased violence and ethnic clashes. The company instituted a series of measures to ensure that their high volume services could continue without causing any disruption to the peace and stability of the country:

• Created guidelines with regulatory authorities: Company had discussions with regulatory authorities to develop technical guidelines on communications during election time

• Socialized guidelines for communication: Company worked directly with content service providers (CSPs) and political parties to clearly articulate the messages that were not allowed

• Instituted a validation process for messages: At least 48 hours prior to broadcasting the message, it had to be reviewed and validated by mobile operator against the set guidelines

Value delivered

• Reduced operating risks in terms of providing broadcasting services which are safe and do not contribute to any kind of instability

• Strengthened brand recognition as a company willing to take up issues of national importance

Key enablers

• Partnerships in form of getting all stakeholders involved with the election on-board with the guidelines and communication process

• Financing and investments to setup monitoring systems and infrastructure

Source: https://www.unglobalcompact.org/docs/ issues_doc/Peace_and_Business/B4P_Resource Package.pdf (accessed January 7, 2016)

Role of business and key playersLeading organizations from telecommunications and extractive industries are working toward restoring the economies of conflict-affected regions through commercially viable business opportunities:

Partnership models

Financing and investments

$

170

Extractive industriesMany extractive companies (oil and gas, metals and mining) are typically operating in regions that have faced prolonged periods of conflict and violence. These companies are responding to stakeholder and consumer pressure by providing more information on how they are contributing to economies and development in conflict regions through such programs as Extractive Industries Transparency Initiatives (EITI) and the Voluntary Principles on Security and Human Rights.

Extractive companies are also collaborating on a global scale to create differentiation between those resources that serve as the primary source of income for cartels and groups that propagate and sponsor armed conflicts and those resources that are mined and extracted in a safe and responsible manner and contribute to the overall development of a country. Such differentiation enables customers to make a more informed choice in terms of selecting responsibly sourced and mined products. In the past decade, a number of chain-of-custody certification initiatives and legal acts have gained prominence, including the Kimberley Process (for diamonds), Responsible Jewelry Council Certification, Certified Trading Chains, Conflict-free smelter assessment program, and the Frank Dodd Act.

Shell in Nigeria: Driving transparency in social investing and community development projectsShell in Nigeria developed a unique methodology to investing in socially responsible projects by ensuring that they become sustainable and viable in the long term and do not need to depend on Shell’s support as a donor. The company created a GMoU (Global Memorandum of Understanding) model which would result in creation of Cluster Development Board (CDB) comprising of local representatives who decide on local priorities for development. Funds are then channelized to help implement self-sustaining projects to address these priorities. The control and delivery of the project is the responsibility of the CDB, thereby ensuring that investments are in-line with expectations of the people of the region.

Value delivered

• Secured license to operate by addressing key development concerns of the region through more strategic and targeted investments

Key enablers

• Partnerships with civil societies and local governments to drive investments in socially responsible projects

• Financing and investments to help kick start strategic development projects

Source: https://www.unglobalcompact. org/docs/issues_doc/Peace_and_Business/B4P_ResourcePackage.pdf (accessed January 7, 2016)

Partnership models

Financing and investments

$

171

Figure 97: Key value creation opportunities for driving the peace and justice agenda

Accelerating the recovery of conflict regions

Developing guidelines for ethical business

• Provide infrastructure development in form of basic services (e.g. telecom)

• Combine social responsibility schemes with basic infrastructure services

Safaricom in Kenya ensured the responsible and secure use of its bulk messaging service during the Kenyan elections held in 2013

• Utilize industry partnerships to drive transparency in extractive industries

• Create partnerships to develop differentiation between conflict resources and sustainable sourced resources

Shell developed a unique and transparent methodology to investing in socially responsible projects in Nigeria

SummaryBusinesses cannot grow and thrive in unstable societies, and instability of any kind is disruptive to the private sector. Conflicts and violence undermine businesses’ ability to produce, grow, and make long-term capital investments. It’s in businesses’ best interest to adopt a more incisive approach to maintaining peace and justice in the societies that they operate in.

Value creation opportunities

172

Chapter endnotes1 United Nations High Commissioner for

Refugees, “World at War: UNHCR Global Trends, Forced Displacement in 2014“, http://unhcr.org/556725e69.html, accessed January 7, 2016

2 Ibid

3 Ibid

4 Ibid

5 Ibid

6 International Institute for Strategic Studies, “The changing character of conflict: Armed Conflict Survey 2015”, https://www.iiss.org/en/publications/acs, accessed January 7, 2016

7 Global Peace Index and Institute for Economics & Peace, “Global Peace Index 2015: Measuring Peace, its Causes and its Economic Value”, http://economicsandpeace.org/wp-content/uploads/2015/06/Global-Peace-Index-Report-2015_0.pdf

8 REFUNITE, “Lonestar Cell MTN Liberia, Ericsson and REFUNITE to Launch Service to Reconnect Families”, June 20, 2014, http://refunite.tumblr.com/post/89341328041/lonestar-cell-mtn-liberia-ericsson-and-refunite, accessed January 7, 2016

Reinstate damaged infrastructure to deliver basic services for a reasonable standard of living

Utilize digital technologies to deliver information and emergency services when formal and public systems are not in place

Drive investments in socially responsible projects relevant to the development agenda of the conflict region

Create cross sector partnerships to improve outreach of goods and services to remote locations in conflict regions

Leverage digital as an enabler to scale these guidelines and standards to the wider set of stakeholders

Drive investments for better research methodologies and frameworks to develop future guidelines ethical business

Develop partnerships with industry peers to help create guidelines for ethical and corruption free business conduct

Provide data and information systems to help improve guidelines based on feedback from industry peers on effectiveness of ethical business

Enabling ecosystem required for implementation

Figure 98: Illustrative enablers required to drive value creation and promoting peace and justice through strong institutions

Accelerating the recovery of conflict regions

Developing guidelines for ethical business

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Critical and Short TermScale and Long Term

$

173

• Significantly reduce all forms of violence and related death rates everywhere

• End abuse, exploitation, trafficking and all forms of violence against and torture of children

• Promote the rule of law at the national and international levels and ensure equal access to justice for all

• By 2030, significantly reduce illicit financial and arms flows, strengthen the recovery and return of stolen assets and combat all forms of organized crime

• Substantially reduce corruption and bribery in all their forms

• Develop effective, accountable and transparent institutions at all levels

• Ensure responsive, inclusive, participatory and representative decision-making at all levels

• Broaden and strengthen the participation of developing countries in the institutions of global governance

• By 2030, provide legal identity for all, including birth registration

• Ensure public access to information and protect fundamental freedoms, in accordance with national legislation and international agreements

• Strengthen relevant national institutions, including through international cooperation, for building capacity at all levels, in particular in developing countries, to prevent violence and combat terrorism and crime

• Promote and enforce non-discriminatory laws and policies for sustainable development

Peace, justice and strong institutions

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/peace-justice/

Innovative business models generate attractive returns while meeting social and environmental goals

Business-centric, multi-stakeholder partnerships are needed to drive investments and technology transfer to meet Sustainable Development Goals

What does this mean for businesses?

Businesses should set up local production facilities aligned to sustainable development, leveraging digital technologies in partnership with industry and civil bodies

BUSINESS-CENTRIC PARTNERSHIPS

GeSI represents 30 companies in ICT collaborating to meet emissions, productivity and social development goals

Create partnerships to leverage public sector funds and drive alternative business models

Partnerships for the goals

Enable low cost production and connectivity to remote areas to spur the growth of developing countries 

International Air Transport Association (IATA) Alternative Fuels Program is working with 260 member airlines to switch to sustainable alternative fuels and has tested 50% blend of sustainable bio-based jet fuel in over 1,700 passenger flights across 21 member airlines.

per year is current gap in investments identified to meet SDG targets

GAP IN INVESTMENT FOR SDGS

$3.1trn

175Data and figures collected as part of secondary research conducted by Accenture Strategy All references and additional details can be found at the end of this chapter on page 181

176

Partnerships for the goals

Rise of business-centric multi-stakeholder partnerships to address key development issuesA number of business-centric multi-stakeholder partnerships have emerged in the past 15 years that are working toward creating blueprints and roadmaps for the private sector to contribute to the achievement of sustainable development targets and goals.

For example, the GeSI (Global e-Sustainability Initiative) represents more than 30 major companies and other industry associations in the information and communication technology (ICT) sector, and has a mandate to improve the sustainability performance of the sector and contributions to economic productivity and growth. The GeSI’s latest SMARTer2030 study (co-authored by Accenture) has identified the key role of the ICT sector to enable a 20 percent reduction in global CO2 emissions by 2030 and provide access to healthcare for 1.6 billion more people.1

An example of a cross-industry business-centric partnership is the Green Growth Action Alliance (G2A2), which has been working with more than 50 companies to identify different measures to leverage public funds and help scale private-sector investment by identifying innovative financing and de-risking structures, developing pilots of new models, and socializing the results with the international community. The G2A2 has identified the need for $570 billion in private investments to drive green growth (which includes mitigation measures such as clean energy infrastructure and low-carbon transport development, energy efficiency and forestry):2

• In India, the G2A2 partnered with Asian Development Bank and the Clinton Climate Initiative, with seed funding from the United Kingdom Government’s Capital Markets Climate Initiative, to structure a pilot renewable energy certificate (REC) floor price mechanism to incentivize solar power production

• In Kenya, the G2A2 helped structure an insurance product to cover the risks of geothermal exploration and drilling projects in a bid to help kick-start the growth of clean energy fuel sources

Investment gap for infrastructure and sustainable development in developing countriesThe global investments to implement the SDGs are estimated at close to $5 trillion to $7 trillion per year, with a majority of the investments (close to $3.3 trillion to $4.5 trillion per year) identified for developing countries.3 With the current levels of investment (including both public and private sources) in SDG-relevant sectors, developing countries will face an annual investment gap of $2.5 trillion.4 It has been estimated that private sector participation in SDG-relevant sectors such as health, education, climate change adaptation, water and sanitation is relatively low, and under 20 percent of the overall sector’s investments in any particular developing country.5

Partnerships increasingly are becoming key to meeting the global sustainability challenges. These arrangements can assume many forms—from business and civil societies collaborating to address the needs of local communities and rural areas, to multi-stakeholder, cross-geography partnerships focused on driving investments and creating new solutions. Businesses, in particular, must play a more active role in these partnerships by bringing enabling technologies, supplying vital knowledge and expertise, and providing the scale that’s critical to solutions’ long-term viability and success.

Figure 99: Key SDG target areas and value creation opportunities

Detailed targets for the partnerships goal is provided at the end of this chapter on page 182

Mobilize funding for developing countries to implement SDGs

Support developing countries in

implementing SDGs

Encourage the growth of multi-stakeholder partnerships to help

implement SDGs

Enhance global trade flows through an

equitable multilateral trading system

Enable transfer of sustainable technologies to

developing countries

Provide products and services to cater to growth and development needs of developing countries

• Enable partnerships to lower the costs of production and ownerships of basic products and services to help meet development needs

• Enable partnerships to better improve last mile connectivity to customers in remote and previously inaccessible regions

Enable sustainable technology transfer and associated financing to protect long term viability of businesses

• Identify partnership models which channelize public sector funding sources to help de-risk social development projects to drive greater scale of private investment

• Drive sectoral and cross-sectoral partnerships to enable entire sector(s) to move to commercially viable sustainable business alternatives (e.g. increased adoption of bio-fuels as an alternative fuel in the aviation industry)

Employ technologies and services to protect vulnerable consumer groups:

SDG target areas

Illustrative value creation opportunities

Turning challenges and trends into opportunitiesBusinesses have numerous opportunities to partner with public sector, civil societies and think tanks to design, innovate and deliver on key targets of the SDGs through commercial and sustainable business models.

177

178

AviationThe aviation industry through its trade association IATA has been instrumental in driving the growth of bio-fuels as a viable alternative for jet fuel in the aviation industry. This unique partnership has taken a holistic approach to help the industry migrate to a more sustainable and commercially viable fuel source. Through the IATA, the aviation industry has adopted a sector-specific approach and targets for climate action:6

• Ensure a 1.5 percent fuel efficiency improvement on an annual basis from 2009 to 2020

• Aim to ensure that industry growth is carbon neutral from 2020 onward

• Target a 50 percent reduction in net CO2 emissions from 2005 levels

Role of business and key playersLeading organizations from aviation and financial services are developing innovative partnership models to meet key social and environmental challenges.

$1.5 bn contract that United Airlines has signed with advanced biofuels developer Fulcrum Bioenergy for close to 3.4 bn litres

Enabling the aviation industry to switch to viable and sustainable alternative fuelsThe International Air Transport Association (IATA) is the trade association which represents the majority of the world’s airlines (260 member airlines). These airlines cover close to 85 percent of all commercial flight operations in the world. IATA Alternative Fuels program has been working with these partner airlines to push bio-fuels as a sustainable and cost effective replacement for jet fuel. The current strategy involves using blended fuels before biomass based jet fuels are commercially available and sustainable. Over 21 airlines and over 1,700 passenger flights have used 50 percent blended fuel with biojet fuel derived from used cooking oil, jatropha, camelina and algae.

Value delivered

• Reduce long term risks in terms of protecting long term viability of the industry with impending carbon tax and pricing schemes

• Reduce operational risks to price volatility of petroleum based jet fuel by switching to bio-fuels

Key enablers

• Partnerships in form of aligning interests of 260 member airlines to move towards sustainable alternate fuels

• Financing and investments to drive R&D in making commercially viable and sustainable jet fuels

Source: http://www.iata.org/whatwedo/environment/Pages/alternative-fuels.aspx (accessed January 7, 2016)

Figure 100: Bio jet-fuel opportunity commitments and opportunity7,8

Partnership models

Financing and investments

$

1.4 bn litresof bio jet-fuel will be produced by Fulcrum Bioenergy for Cathay Pacific airlines over a 10 year period by using municipal solid waste as a feedstock

179

Financial servicesFinancial services companies are collaborating with civil societies through innovative partnerships to deliver products and services that are focused on meeting key development agenda items. For instance, Rabobank in the Netherlands has teamed with WWF and Friends of the Earth (FoEN) Netherlands to launch a carbon-neutral credit card.9 This is a clear example of a financial services company that has created a new set of products and services that directly addresses the climate action goal. Both WWF and FoEN were critical to identifying a carbon footprinting tool and selecting the compensation method (internationally accredited clean development mechanism carbon credits) for the carbon-neutral credit card.

Recently Deutsche Bank’s Global Social Finance (GSF) group launched a $50 million debt investment Essential Capital Consortium (ECC) fund that provides loans to social enterprises that deliver solutions in financial services, energy and healthcare in low-income and base-of-the-pyramid communities across the world.10 To mitigate the risks of funding early-stage social enterprises, Deutsche Bank has partnered with the USAID’s Office of Development Credit, Global Development Lab, Asia Bureau and the US State Department to secure a $25 million loan portfolio guarantee.11

Transforming the aid distribution to enable effective and efficient aid deliveryMasterCard has recently launched its MasterCard Aid Network through a partnership with the UN and World Vision to provide a holistic service to better streamline aid distribution in conflict regions which have limited or no telecom capabilities. Chip and PIN based cards are pre-loaded with quantities of goods (e.g. food, medicine and shelter) and distributed to the needy population. The solution has helped 15,000 people in Yemen and 9,000 in Philippines receive aid through programs managed by World Vision.

Value delivered

• Increased potential revenues by offering an innovative product to be used in aid situations

• Strengthened brand image as a potential innovation partner to help aid and funding organizations

Key enablers

• Partnerships in form of working with local merchants and development organizations to responsible projects

• Physical infrastructure in form of setting up the visual terminals with participating merchants and providing Chip based PIN cards

Source: http://newsroom.mastercard.com/press-releases/mastercard-transforms-aid-distribution/ (accessed January 7, 2016)

Partnership models

Physical infrastructure

180

Figure 101: Key value creation opportunities by leveraging partnerships to deliver on sustainable development goals

Provide products and services to cater to need of

developing countries

Enable sustainable technology transfer

and associated financing to protect long term viability

of businesses

• Enable partnerships to lower costs of production and ownership

• Enable partnerships to drive last mile connectivity to customers

MasterCard transforming and streamlining aid distribution through Chip and PIN based cards

• Identify partnership models to help to de-risk social investment projects and attract private sector investments

• Drive sectoral and cross-sectoral to help industry sectors migrate to commercially viable sustainable business alternatives

Global aviation industry through the IATA are adopting biofuels as a commercially viable option to petroleum based jet fuel

SummaryMulti-stakeholder partnerships are an important vehicle to advance the sustainable development agenda due to the ability of multiple partners to pool significant resources, skills and knowledge. Businesses need to adopt a greater implementation role in these partnerships, focus on enabling technology and knowledge transfer while providing the scale required for solutions’ long-term viability and success.

Value creation opportunities

181

Chapter endnotes1 Global e-Sustainability Initiative and Accenture,

“#SMARTer2030: ICT Solutions for 21st Century Challenges”, 2015, http://smarter2030.gesi.org/downloads/Full_report.pdf

2 Green Growth Action Alliance, World Economic Forum and Accenture, “The Green Investment Report: The ways and means to unlock private finance for green growth”, 2013, http://www3.weforum.org/docs/WEF_GreenInvestment_Report_2013.pdf

3 United Nations Conference On Trade And Development, “World Investment Report 2014, Investing In the SDGs: An Action Plan”, http://unctad.org/en/PublicationsLibrary/wir2014_en.pdf

4 Ibid

5 Ibid

6 IATA, “IATA Sustainable Alternative Aviation Fuels Strategy”, https://www.iata.org/whatwedo/environment/Documents/sustainable-alternative-aviation-fuels-strategy.pdf, accessed January 7, 2016

7 BiofuelsDigest, “United Airlines invests $30M in Fulcrum BioEnergy; inks $1.5B+ in aviation biofuels contracts”, June 30, 2015, http://www.biofuelsdigest.com/bdigest/2015/06/30/united-airlines-invests-30m-in-fulcrum-bioenergy-inks-1-5b-in-aviation-biofuels-contracts/, accessed January 7, 2016

8 BiofuelsDigest, “Cathay Pacific invests in Fulcrum Bioenergy and signs 10-year offtake agreement”, August 7, 2014, http://www.biofuelsdigest.com/bdigest/2014/08/07/cathay-pacific-invests-in-fulcrum-bioenergy-and-signs-10-year-offtake-agreement/, accessed January 7, 2016

9 Barbara Gray and Jenna P. Stites, “Sustainability through partnerships: Capitalizing on Collaboration”, 2013, http://nbs.net/wp-content/uploads/NBS-Systematic-Review-Partnerships.pdf

10 Deutsche Bank, “Deutsche Bank enters new partnership addressing Sustainable Development Goals”, October 20, 2015, https://www.db.com/newsroom_news/2015/cr/deutsche-bank-enters-new-partnership-addressing-sustainable-development-goals-en-11240.htm, accessed January 7, 2016

11 Ibid

Set up local production facilities and distribution networks to deliver customized products and services

Utilize digital infrastructure to scale solutions in developing countries where people have basic access to telecom (e.g. SMS services)

Drive investments in R&D to drive reduction in production costs and customize the product to meet basic development needs

Enable partnerships with civil societies to provide last mile connectivity and distribution to reach customers in developing countries

Leverage data and information systems to receive feedback on performance to better design future products and services

Re-structure and transform current infrastructure to improve the sustainability performance in terms of consumption of material inputs and emissions

Enable digital infrastructure to socialize and promote the benefits of leveraging sustainable technologies for a particular sector

Drive sectoral based funding mechanisms and leverage rebates to de-risk the move towards sustainable alternatives

Partner with industry peers, public sector and civil societies to policy incentives and mechanisms to enable and accelerate move to sustainable business models

Enabling ecosystem required for implementation

Figure 102: Illustrative enablers required to drive value creation by enabling partnerships to promote global development

Provide products and services to cater to need of

developing countries

Enable sustainable technology transfer

and associated financing to protect long term viability

of businesses

Partnership models

Financing and investments

Physical infrastructure

Digital infrastructure

Data and accountability

Critical and Short TermScale and Long Term

$

182

Finance

• Strengthen domestic resource mobilization, including through international support to developing countries, to improve domestic capacity for tax and other revenue collection

• Developed countries to implement fully their official development assistance commitments, including the commitment by many developed countries to achieve the target of 0.7 percent of ODA/GNI to developing countries and 0.15 to 0.20 percent of ODA/GNI to least developed countries ODA providers are encouraged to consider setting a target to provide at least 0.20 percent of ODA/GNI to least developed countries

• Mobilize additional financial resources for developing countries from multiple sources

• Assist developing countries in attaining long-term debt sustainability through coordinated policies aimed at fostering debt financing, debt relief and debt restructuring, as appropriate, and address the external debt of highly indebted poor countries to reduce debt distress

• Adopt and implement investment promotion regimes for least developed countries

Technology

• Enhance North-South, South-South and triangular regional and international cooperation on and access to science, technology and innovation and enhance knowledge sharing on mutually agreed terms, including through improved coordination among existing mechanisms, in particular at the United Nations level, and through a global technology facilitation mechanism

• Promote the development, transfer, dissemination and diffusion of environmentally sound technologies to developing countries on favourable terms, including on concessional and preferential terms, as mutually agreed

• Fully operationalize the technology bank and science, technology and innovation capacity-building mechanism for least developed countries by 2017 and enhance the use of enabling technology, in particular information and communications technology

Capacity building

• Enhance international support for implementing effective and targeted capacity-building in developing countries to support national plans to implement all the sustainable development goals, including through North-South, South-South and triangular cooperation

Trade

• Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the World Trade Organization, including through the conclusion of negotiations under its Doha Development Agenda

• Significantly increase the exports of developing countries, in particular with a view to doubling the least developed countries’ share of global exports by 2020

• Realize timely implementation of duty-free and quota-free market access on a lasting basis for all least developed countries, consistent with World Trade Organization decisions, including by ensuring that preferential rules of origin applicable to imports from least developed countries are transparent and simple, and contribute to facilitating market access

Systemic issues

Policy and institutional coherence

• Enhance global macroeconomic stability, including through policy coordination and policy coherence

• Enhance policy coherence for sustainable development

• Respect each country’s policy space and leadership to establish and implement policies for poverty eradication and sustainable development

Multi-stakeholder partnerships

• Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology and financial resources, to support the achievement of the sustainable development goals in all countries, in particular developing countries

• Encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships

Data, monitoring and accountability

• By 2020, enhance capacity-building support to developing countries, including for least developed countries and small island developing States, to increase significantly the availability of high-quality, timely and reliable data disaggregated by income, gender, age, race, ethnicity, migratory status, disability, geographic location and other characteristics relevant in national contexts

• By 2030, build on existing initiatives to develop measurements of progress on sustainable development that complement gross domestic product, and support statistical capacity-building in developing countries

Partnerships for the goals

TARGETS

Detailed targets are available at: http://www.un.org/sustainabledevelopment/peace-justice/

Contact the authorJessica Longjessica.l.long@accenture.com

Join the conversation @AccentureStrat

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Acknowledgements This report was developed in collaboration with the World Economic Forum’s Young Global Leaders (YGL) Community and an output of the YGL Sustainable Development Goals initiative. We would like to thank the core working group of the initiative, specifically Brendan Cox, Mariéme Jamme, John McArthur, Emily Ross, Bruno Sánchez-Andrade Nuño, Joanna Sparber and Lisa Witter.

The team would like to thank those who contributed case studies, reviews and guidance, including Daniella Ballou-Aares, Jen Ace, Aneri Amin, Michael Argosh, Zubaida Bai, Analisa Balares, Brad Brekke, Charlotte Deal, Nishan Degnarain, John Dutton, Anna Easton, Jillian Fisher, Timothy Fort, Kate Garvey, Elizabeth Gore, Celine Herweijer, Catherine Howarth, Sony Kapoor, Justin Keeble, Peter Lacy, Sheila Marcelo, Rosy Mondardini, James Mwangi, Valeria Orozco, Avra Siegel, Shamina Singh, Natasha Sunderji, Renee-Maria Tremblay and Mark Vlasic.

Several people were critical to the creation and publication of this report, including Graham Girling, Palak Kapoor, Sally Lavelle, Winsley Peter, Sundeep Singh, Abhishek Srivastava, Liz Steel and Bernie Thiel.

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