This chapter focuses on the need for new models of partnership, collective action and systems leadership by companies to accelerate and scale change. Even the most responsible and impactful actions by the world’s largest companies are not sufficient on their own to drive the type of transformation that is needed to tackle the complex system-level challenges that increasingly shape the business operating context, such as climate change, inequality, the future of work and economic recovery from the pandemic. The chapter provides an overview of how leading companies are developing more holistic and multi-level strategies for partnering with each other and with governments and civil society organizations. It profiles financing and operational partnerships between individual companies and other actors at the project level, pre-competitive business alliances among a larger number of companies at the industry level and broader multi-stakeholder institutions, platforms and networks at the national and global levels. It illustrates examples of how these different levels of partnership can help to drive transformational change through mobilizing diverse resources and capabilities to make essential markets and systems more inclusive and sustainable, such as health, food, energy and financial systems. In addition, the chapter provides examples of large-scale coalitions aimed at developing voluntary norms, rules and standards to spread responsible business practices and others that advocate for and aim to influence smart public policies and change public attitudes and behaviours. The chapter concludes with some lessons learned from building effective partnerships.
As outlined in the previous chapters, improvements made by business leaders and board directors to their own company’s governance, strategy and reporting are all essential. Individual actions taken by companies, especially the largest, can have a meaningful impact on the lives and livelihoods of millions of people and on the environment. At the same time, they can help the company better manage its risks and protect value, harness its opportunities and create value, and commit and adhere to its values. In short, individual business action is crucial. However, it is not sufficient.
Even the most responsible and impactful actions by individual companies are not enough on their own to drive the type of transformation that is needed to ensure widespread implementation of the principles and practices of stakeholder capitalism. Nor are these individual company actions sufficient to tackle complex system-level challenges that increasingly shape companies’ operating contexts, such as climate change, inequality, food security, economic recovery, energy transition or health crises. Partnerships among companies and between companies and other stakeholders, such as governments, investors and civil society organizations, are essential for achieving scale and systemic impact. Indeed, they have never been more important.1
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In many situations requiring system-level change, governments should take the lead. There is an urgent need for reforms in government policies, regulations and fiscal incentives if the world has any chance of mitigating and adapting to climate change, recovering from the pandemic, tackling inequality and achieving the Sustainable Development Goals. At the same time, companies can, and in their own interests must, play a key role in working together both to advocate for such reforms and to partner with the public sector to leverage scarce resources and drive market-based solutions. Even in the absence of government leadership, they can form coalitions with other companies and with investors to develop industry-wide, voluntary rules and standards, spread responsible business practices and mobilize blended finance and investments.
As stakeholders themselves in the vitality and resilience of their operating system, companies and their leaders should be both capable partnership practitioners as well as champions and advocates for investing in and sustaining such alliances. To be effective partners in driving systemic change, business leaders need to be effective systems leaders. As outlined in Fig. 7.1, this requires the ability to cultivate a shared vision for change, empower widespread innovation and action and enable mutual accountability for progress.2
Fig. 7.1
Three key roles of system leaders
(Adapted from: Jane Nelson and Beth Jenkins. Tackling Global Challenges: Lessons in System Leadership from the World Economic Forum’s New Vision for Agriculture Initiative. Harvard Kennedy School, Corporate Responsibility Initiative, 2016)
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This chapter looks at some key models and examples of corporate partnerships, with a particular focus on large-scale collective action among companies across industry sectors and through multi-stakeholder platforms between companies, governments and civil society organizations. It also highlights some key lessons on how to engage in, build and sustain systems change alliances:
Develop a holistic, multi-level strategy for engaging in partnerships
Support pre-competitive business alliances to scale industry-wide progress
Participate in multi-stakeholder platforms to drive system-wide change
Be a corporate champion for partnerships, even when they are difficult
7.1 Develop a Holistic, Multi-level Strategy for Engaging in Partnerships
A typical multinational company will be engaged in hundreds if not thousands of partnerships at any point in time through its core business operations and value chain, its community engagement and philanthropy, and its policy dialogue and advocacy activities. The most robust partnerships share the following core characteristics:
A collaborative relationship in which all participants agree voluntarily to work together to achieve a common purpose or to undertake a specific task and to share risks, resources, competencies and benefits, with reciprocal obligations and mutual accountability for outcomes.3
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Given the complexity and uncertainty of most business operating contexts, it should be obvious that there is no over-arching “best practice” partnership model. Most leading companies take a holistic approach, engaging in a wide variety of different levels and types of partnership simultaneously. The following three broad types and levels of partnership are particularly important in achieving scale and impact towards a more stakeholder-oriented way of doing business and effectively managing ESG&D risks and opportunities:4
Project-level, financing and operational partnerships: These involve an individual company working with one or a small number of other partners or stakeholders to accomplish a certain objective or set of objectives usually within a set time-frame. Such partnerships typically include a project plan with well-defined roles and responsibilities, and with monitoring and evaluation mechanisms that enable the partners to make “course corrections” as needed over the life of the project. They can be undertaken to improve the performance and impact of the company’s own core business activities and value chain or to leverage core business capabilities such as R&D, technology innovation, product development, manufacturing, logistics, marketing and distribution to solve specific social and environmental challenges or to improve the impact of corporate philanthropy and community investment commitments. There are hundreds of thousands of such project-level partnerships between individual companies and external stakeholders around the world, and more are needed.
Industry-level, pre-competitive business alliances: These involve a group of companies working together with their peers and competitors on a pre-competitive basis within or across a specific industry sector to drive sector-wide change. This can include voluntary initiatives to establish and spread responsible industry standards or collaborative efforts to scale and replicate promising innovations and models, respond to a humanitarian crisis or undertake joint research or public policy advocacy. Some of these alliances are part of long-established chambers of commerce or trade and industry associations that have set up new departments to focus on social and environmental issues. Others have been established to have an explicit and dedicated focus on advancing social and environmental goals through industry coordination and cooperation. Such pre-competitive business alliances play a crucial role in scaling the reach and impact of industry-wide changes and commitments to stakeholder capitalism. Some examples are profiled in Sect. 7.2 of this chapter.
Multi-stakeholder institutions, platforms and networks: These involve collaboration among large groups of companies alongside other actors such as governments and civil society organizations aimed at overcoming systemic market failures or governance gaps to achieve transformational change. They include independent institutions with their own governance and accountability structures, such as the Global Reporting Initiative, GAVI The Global Vaccine Alliance, the Global Alliance for Improved Nutrition, the Alliance for a Green Revolution in Africa and the Better Than Cash Alliance, to mention just a few. They also include more informal and dynamic networks and technology-enabled online information and knowledge hubs and open innovation and accelerator platforms. Some examples of this type of large-scale multi-stakeholder platform are provided in Sect. 7.3 of this chapter.
In most cases of successful scaling or systemic impact, there are mutually reinforcing linkages between these different levels and types of partnership. Individual companies will be simultaneously creating or participating in partnerships at each level. At the same time, each company is part of an ecosystem of partnerships, some led by business, and others by governments or civil society. Business leaders need to understand and be more actively engaged in shaping this ecosystem and its relationship to their own corporate strategies, cultures, performance and material ESG&D priorities.
As outlined above, hundreds of thousands of project-level financing and operational partnerships are being implemented along company values chains and in host communities. They have a valuable role to play and more are needed. Yet, to achieve real scale and system-level transformation, it is pre-competitive business alliances and multi-stakeholder platforms that will make the difference.
7.2 Support Pre-competitive Business Alliances to Scale Industry-Wide Progress
One of the most effective ways of accelerating and scaling change is through industry-wide coalitions. If competitors can work together on a pre-competitive basis to establish and spread common goals for sustainable development, while still competing on their individual ability to execute and innovate, collectively they can have far more substantial and systemic impact than each acting alone. They can achieve this by one or a combination of the following types of collective action:
Establishing industry-wide standards that all members must meet
Setting ambitious shared goals or roadmaps for achieving specific social or environmental objectives or the Sustainable Development Goals more broadly
Reporting and benchmarking members’ performance against these standards and goals
Sharing lessons and good practices
Supporting pre-competitive research and development consortia
Undertaking joint policy advocacy
There is untapped potential for business leaders to demand more of their representative industry bodies, especially when it comes to policy advocacy, given the “voice” and influence that many of these business-led groups have with governments. These organizations also influence the activities of millions of companies and could be one of the best multiplier platforms available for scaling business impact beyond the leading companies. At a minimum, as part of good corporate governance outlined in Chap. 4 and integrated reporting outlined in Chap. 6, companies should publicly report on which trade and industry associations they are members of and the financial contributions that they are making to them.
There is also untapped potential for smaller groups of business leaders to work together collectively in business-led organizations or campaigns that are fully dedicated to mobilizing business support for a specific social or environmental issue or set of issues. A vanguard of business-led corporate responsibility coalitions has already demonstrated high potential for achieving impact.5 In almost all cases, a core group of 20 or so CEOs and their companies have played a crucial “start-up” role as champions, role models and influencers, actively encouraging their business partners, peers and competitors to get engaged.
We look at both of these business-led models in more detail below.
7.2.1 Leverage the Sustainability Influence of Representative Business Organizations
Representative business organizations, such as Chambers of Commerce, Organizations of Employers or Trade and Industry Associations, have been established for decades in most sectors and countries as well as at a global level. They focus mainly on advocating for and promoting direct, competitive business interests for their hundreds and sometimes thousands of member companies. As ESG&D issues become material to business success, these associations are starting to take a more proactive stance on these issues, sometimes establishing dedicated units or programmes to address them. In most cases, a small cohort of influential member companies and their CEOs is spearheading this evolving leadership role.
Representative business organizations operating at a national level can provide a valuable collective platform for their members to advocate for policy reforms and engage with government in other ways. Having said that, they can be criticized for playing to the “lowest common denominator” to represent all their diverse members and for defending the status quo or undertaking obstructionist or regressive lobbying against policies or regulations that further the goals of sustainability. At the same time, given their influence and reach, these organizations have the potential to play a valuable role in the drive towards stakeholder capitalism and more inclusive and sustainable growth. As a result, growing media, investor and activist attention is being paid to the role of business associations, especially at national levels, and demands for companies to be more transparent about how they are engaging in and funding these organizations.
The following examples illustrate four well-established national business associations that are starting to take a leadership role in advancing the topics and practices of sustainability and stakeholder capitalism at a country level:
Japan’s Keidanren: Keidanren, the Japan Business Federation, is a comprehensive economic organization representing 1461 Japanese companies, 109 national industrial associations and regional economic organizations from all 47 prefectures. Keidanren’s mission is to “support corporate activities which contribute to the sustainable development of the Japanese economy and improvement of the quality of life for the Japanese people.”6
The federation is particularly focused on promoting sustainable development through digital and economic transformation. In November 2018, Keidanren published Society 5.0: Co-creating the Future, a proposal outlining Keidanren’s vision for creating a new human-centred society.7 Keidanren executives assert that today’s greatest challenges can be addressed with closer collaboration between industry, academics, government and individuals from diverse backgrounds. This framework was specifically designed to support the achievement of the UN SDGs.8 Member companies are also involved in addressing climate change. Over 130 members are engaged in 300 projects as part of Challenge Zero, an initiative to develop and deploy new net-zero emissions technologies. Two-hundred and fifty members have also developed long-term plans to mitigate emissions in their operations.9
Confederation of British Industry (CBI): Since its founding in 1965, CBI has grown to represent 190,000 businesses and their 7 million employees.10 It acts as a bridge connecting companies with government stakeholders and other businesses, helping different parties to share best practices, make informed decisions and engage in change-making dialogue.11 Over the past few decades, in addition to more traditional ongoing priorities such as business regulations, taxes, trade and innovation, CBI has increased its focus on human capital and skills development and on infrastructure, energy and the environment.
CBI is particularly focused on empowering its members to decarbonize their operations. The UK is legally bound to achieving a net-zero economy by 2050. CBI recognizes that business cooperation is essential to achieving these targets, and it has publicly committed to work with its members and local governments to meet this pressing challenge. For example, CBI is encouraging every member to decarbonize their operations and collaborate with sector partners to reduce emissions throughout supply chains. CBI is also advocating for the government to pass specific climate change legislation and invest in a low-carbon economy to help businesses transition.12
US Business Roundtable (BRT): The US Business Roundtable is an association of CEOs from America’s top 200 largest companies, representing 20 million employees and over $9 trillion in annual revenue. BRT’s statement redefining the purpose of the corporation from shareholder primacy to stakeholder responsibility on August 19, 2019, which was signed by 181 member CEOs, illustrates the influence and leverage impact that an industry association can have. Although there have been some critiques of the way member companies have implemented the commitment in practice,13 there can be no doubt that the BRT’s members collectively stating that the purpose of business is to “serve not only their shareholders, but also deliver value to their customers, invest in employees, deal fairly with suppliers and support the communities in which they operate” has influenced many other companies, investors and activist groups to take action.14 Since 2019, member CEOs and their companies have adopted a number of initiatives related to increasing minimum wage, improving the health and safety of employees, investing in communities, supporting voter rights and prioritizing climate action and environmental protection.15
Confederation of Indian Industry (CII): CII partners with industry, government and civil society partners to build an economy that will promote India’s development. The Confederation has 900 private and public sector members and an indirect membership of 300,000 enterprises from 294 national and local trade associations.16 CII promotes several initiatives related to corporate social responsibility, climate change, sustainable development and more by utilizing cross-sector partnerships and providing corporations with consulting services and research findings.17
The CII National Committee of Corporate Social Responsibility & Community Development was founded in 2001 to promote the sharing of best practices among members. The Committee partnered with the Bombay Stock Exchange and Indian Institute of Corporate Affairs to create Sammaan, an online platform that connects businesses with NGOs and community projects in need of funding.18 Additionally, the Confederation hosts trainings and consults companies in areas related to environmental and climate change policy, sustainability reporting, stakeholder engagement,19 decarbonization20 and disaster management.21
At a global level, four examples of trade and industry associations that have taken specific actions to spread ESG practices among their members and which offer useful lessons for other industry sectors are summarized in Box 7.1.
Box 7.1 Four Global Trade and Industry Associations Scaling Up Industry-Wide Sustainability Leadership
Makingindustry-wide public commitmentsfor members to achieve social and environmental goals and targets
The Consumer Goods Forum (CGF). CGF can trace its history back to 1953 and today has the vision of “achieving better lives through better business.”22 With over 400 manufacturing and retail member companies23 and a 50-member CEO-led board,24 the CGF has established pillars of work on environmental and social sustainability, health and wellness, and food safety, among others. The work of each pillar is guided by public resolutions and commitments, with specific time-bound targets that aim to drive industry-wide focus and performance on relevant challenges. They include commitments on addressing deforestation, the use of HFC refrigerants, food waste, forced labour, and health and wellness.25
In 2016, the Global Social Compliance Programme (GSCP) was also integrated into CGF, which is a cross-industry effort to drive convergence in tools and reporting to improve social and environmental performance in consumer goods supply chains. CGF will build upon GSCP’s work by promoting the Sustainable Supply Chain Initiative, which will streamline benchmarking of third-party auditing and certification schemes according to the CGF’s Global Food Safety Initiative.26
Establishingindustry-wide performance standardsfor members in health, safety, environment and security and creating a sustainability Technology Roadmap
The International Council of Chemical Associations (ICCA). Alongside some of its regional affiliates, ICCA was one of the first trade associations to publicly address issues of health, safety and the environment. In 1985, in response to the Bhopal Disaster, which was the world’s worst industrial disaster with an official death toll of more than 5000 people, the Canadian chemical industry established the Responsible Care® programme to drive continuous improvement in health, safety, environmental and security performance and improve stakeholder engagement and over the years has made it a requirement for membership.27 A global charter was adopted in 2006 and the programme was implemented by national chemical associations and companies in more than 60 countries. Today, ICCA’s members employ 120 million people in 70 economies around the world and account for 90% of all global chemical sales.28
In the past few years, ICCA has launched programmes on sustainable development, focusing on the role of chemicals in addressing challenges and stakeholder concerns related to public health, food security, clean water, climate change and plastics. ICCA’s programmes include the Technology Roadmap initiative, focused on exploring and promoting technologies that can drive new business value while explicitly tackling global, social and environmental challenges.29
Producing anindustry-wide Code of Conductfor members and partnerships and campaigns to tackle global health challenges
The International Federation of PharmaceuticalManufacturers and Associations. IFPMA represents some of the largest biopharmaceutical companies30 and regional and national associations31 in the world. All members are required to sign IFPMA’s Code of Practice, the first of its kind for any sector. The Code was first written in 1981 and has undergone five revisions over the past four decades to ensure that members’ practices align with evolving ethical standards. A 2012 revision expanded the Code’s scope beyond marketing practices to “cover all interactions with healthcare professionals, medical institutions and patient organizations.” The most recent 2019 edits set standards even higher, including banning gifts and promotional aids and developing the IFPMA Ethos which shifted the Code from a rules-based to a values-based document.32
IFPMA also works with its member companies on initiatives to collectively address a variety of global health challenges and to profile partnership opportunities to strengthen health systems and improve access to affordable medicines, including sharing policy options for Universal Health Coverage. In 2020, more than 20 of its members launched the AMR Action Fund to bring 2–4 new antibiotics to patients by 2030, to address the rapid rise of antimicrobial resistance. IFPMA is also a founding partner of the Access to COVID-19 Tools ACT-Accelerator. This includes the COVID-19 Vaccine Global Access Facility (COVAX), which aims to support public-private partnerships to accelerate the development, production and equitable access to safe, effective and affordable COVID-19 vaccines. In addition, IFPMA has launched a #TeamVaccines campaign to spread trust and confidence in vaccines. Clearly, relevant members stand to benefit from being able to sell more of their products due to these initiatives, but at the same time the industry’s R&D, production and distributions capabilities are essential for improving global public health and working together can help to scale impact.
Establishing anindustry-wide benchmarkto assess contributions to the SDGs and hosting the Mobile for Development platform
TheGSMA Association: GSMA represents more than 750 operators and nearly 400 other companies in the broader mobile communications ecosystem. This includes handset and device makers, software companies, equipment providers and internet companies, as well as organizations in adjacent industry sectors.33 Essentially, the companies that produce the products and networks that reach more than 5 billion unique mobile subscribers around the globe.
GSMA was the first representative industry association to develop a methodology to benchmark the industry’s contribution to the Sustainable Development Goals, publishing its first Mobile Industry Impact Report in 2016.34 In its 2020 impact report, GSMA noted that with the use of mobile services accelerating, the industry’s impact on the SDGs grew faster than ever, “for example, 1.6 billion mobile subscribers used their phone in 2019 to improve or monitor their health, representing an increase of 330 million since 2018. Moreover, 2.3 billion subscribers used mobile financial services, an increase of 620 million since 2018.”35 At the same time, the report highlighted the increased exclusion and vulnerability of people who do not have access to digital technology, exacerbated by the COVID-19 pandemic, and the growing urgency to address the digital divide.
Additionally, GSMA’s Mobile for Development Initiative supports numerous projects that aim to test and spread scalable innovations and partnerships in mobile solutions to address a range of development priorities. These include solutions in mHealth, AgriTech, Digital Identity, Mobile Money, Connected Women and Disaster Response.36
Source: Adapted and updated from: Jane Nelson. Partnerships for Sustainable Development: Collective Action by Business, Governments and Civil Society to Achieve Scale and Transform Markets. Corporate Responsibility Initiative, Harvard Kennedy School. Report commissioned by the Business and Sustainable Development Commission, 2017
These are only eight examples from a possible universe of hundreds of representative trade, industry and business associations. If more associations were to take a more strategic and ambitious approach to encouraging or requiring their member companies to support specific social and environmental goals, the multiplier effect would be substantial. Collectively, these associations reach millions of companies in almost every country, with hundreds of millions of employees, substantial influence with governments, and several trillion dollars in revenues and R&D spending.
A 2013 study of five associations (the Consumer Goods Forum, IFPMA, CropLife International, the International Fertilizer Industry Association and the European Chemical Industry Council), for example, found that the annual revenues of their member companies were about US $4.3 trillion. The authors concluded, “As trade associations advance their programming along a business and society trajectory, they will not only increase their ability to be force multipliers on important issues; they will also simultaneously increase their value proposition for their member companies.”37
The CEOs of leading companies are starting to put pressure on their trade associations to take a more progressive stance on lobbying for social and environmental goals. Given public distrust in the political lobbying activities of many trade and industry associations, there is a danger that such actions could raise additional concerns about “big business” having undue influence, or a critique that business associations are “greenwashing” by making progressive statements, but then continuing to lobby for policies or incentives that benefit companies at the expense of other stakeholders. These concerns must be understood and respected. Trade associations can help to address them by being transparent about their activities, setting public goals and commitments and being open to independent evaluations on progress, as the four associations profiled in Box 7.1 are all doing.
Although representative business associations at the global, regional, national and industry levels reach the largest number of companies, a second group of business-led, pre-competitive alliances has emerged over the past two decades that engages a smaller number of companies, but which has been more influential in driving the agenda for sustainable development. These are corporate responsibility coalitions—self-selected, voluntary business leadership groups that have a dedicated focus on integrating sustainability or ESG issues into core business practices and playing an active collective role in driving more inclusive and sustainable growth.38 In almost all cases, they have been established by a relatively small start-up cohort of business champions at the CEO or senior executive level, and the most successful ones retain the active engagement of senior business executives. Box 7.2 illustrates the reach and focus of just a few of these coalitions that are focused on specific industry sectors or within specific countries. All companies should review the corporate responsibility leadership coalitions in their industry and key countries of operation to explore opportunities for engagement.
There are also a number of cross-industry initiatives with a dedicated focus on working collaboratively to achieve sustainable development at global and national levels. Two CEO-led global examples are:
The World Business Council for Sustainable Development: WBCSD was established in January 1995 as a merger between the Business Council for Sustainable Development, which had been created in 1990 to provide business input to the 1992 UN Conference on Environment and Development (the Rio Earth Summit), and the World Industry Council for the Environment, which was created by the International Chamber of Commerce for the same purpose.39 As such, it is one of the world’s most long-standing, global and multi-industry CEO-led organizations that is fully dedicated to “working together to accelerate the transition to a sustainable world.”40 As of mid-2021, WBCSD’s over 200 member companies represented a combined revenue of more than US $8.5 trillion and 19 million employees, working together with a network of almost 70 national business councils around the world.41
The United Nations Global Compact: In January 1999, the late UN Secretary-General, Kofi Annan, made a keynote speech to leaders attending the World Economic Forum’s annual meeting. He issued the following call to action, “I propose that you, the business leaders gathered in Davos, and we, the United Nations, initiate a global compact of shared values and principles, which will give a human face to the global market.”42 Six months later, the UN Global Compact was launched by a small group of CEOs and the heads of several UN agencies and global trade unions. Today it is the world’s largest corporate sustainability initiative, with some 12,000+ signatories in over 160 countries, representing a large range of industry sectors and sizes, as of mid-2021.43 CEOs sign up to the Compact by committing to align their companies’ strategies and operations with a set of ten principles based on international agreements in the areas of human rights, labour, environment and anti-corruption, and reporting publicly on their progress. They also engage in coalitions aimed at supporting local or national achievement of the Sustainable Development Goals.
Box 7.2 Examples of Business Leadership Coalitions Focused on Addressing Social and Environmental Challenges
These examples illustrate how coalitions of investors and business leaders in specific industry sectors can work together to advance industry-wide progress on ESG and sustainable development.
The Principles for Responsible Investment: Created in 2006, with support from the UN Global Compact and the United Nations Environment Programme, the PRI was one of the first coalitions composed of major asset managers and asset owners with a dedicated focus on sustainability and responsible investment. It established a set of six principles to accelerate the integration of ESG factors into financial investment and ownership decisions and produces research and collective action platforms on a variety of ESG topics and for a variety of asset owners, managers and asset classes. As of mid-2021, it had grown from an initial 100 to some 4000 signatories, collectively managing an estimated US $120 trillion.44
The International Council on Mining and Metals: This is a coalition of over 20 of the world’s leading mining companies and about 30 regional and national mining associations, which together are responsible for a significant proportion of global minerals and metals production. It is dedicated fully to improving safety and sustainable development in the sector. Founded in 2001, membership is at the CEO-level and all members are required to commit to a set of ten Sustainable Development Principles, supporting position statements and transparent and accountable reporting practices against a set of performance expectations.
The Responsible Business Alliance: Initially established by eight companies in 2004 as the Electronics Industry Corporate Citizenship Coalition, to develop and implement a code of conduct aimed at driving industry-wide improvement on social, environmental and ethical issues on the electronics supply chain. Today, it has expanded its mandate to more than 100 member companies in the electronics, retail, auto and toy sectors, and a strong focus on workers’ rights and well-being alongside environmental performance, with working groups targeted at addressing challenging issues in the value chain.
The Equator Principles: In 2006, the IFC co-convened a small group of seven banks to develop a joint risk management framework, modelled on the IFC Performance Standards to identify and manage social and environmental risk in projects. Today, the principles have been officially adopted by about 84 financial institutions around the world, both public and private, and they cover over 70% of international project finance debt in emerging markets.
There are a growing number of coalitions focused on promoting corporate sustainability and responsible business practices at a national or regional level. They include organizations such as Philippine Business for Social Progress; Business in the Community in the UK; the National Business Initiative in South Africa; Swedish Leadership for Sustainable Development; the Dutch Sustainable Growth Coalition and Maal’a in Israel, to name a few. Research by one of the authors with Professor David Grayson, published in 2013, identified national-level, business-led corporate responsibility coalitions in some 70 countries, including more than two-thirds of the world’s largest 100 economies.45
These are only a small sample of sector-specific or country-level corporate responsibility coalitions. They all demonstrate the multiplier effect of large companies working together on a pre-competitive basis to drive sustainable development in their own industry sector and along their own global supply chains. Several of them have undergone independent reviews or evaluations to assess their impact. A review of the most effective business leadership coalitions highlights the following crucial success factors:
CEO-led: Most of them are led by CEOs or senior business executives, with a core group of active CEO champions who galvanize their peers and competitors.
Foundational set of principles or code of conduct based on extensive and rigorous consultation: The vast majority gain credibility through requiring their participants to adhere to and report progress against clear principles, performance standards or codes of practice.
Public goals or commitments: Some of them have also set public goals for specific sustainable development outcomes.
Active working groups with clear responsibilities: In addition to strong CEO support, many have formed practitioner-level working groups to drive industry-wide action on the most material sustainability risks and opportunities faced by their participants.
7.3 Participate in Multi-stakeholder Platforms to Drive System-Level Change
The most challenging partnerships of all are multi-stakeholder platforms that involve collaboration among large groups of companies alongside other actors such as governments and civil society organizations and are aimed at overcoming systemic market failures or governance gaps to achieve transformational change. Some of them are established at a global level with national platforms. Others are national or city-wide alliances. Some are set up as independently governed and funded bodies, while others are hosted or incubated within existing multi-stakeholder or “backbone” organizations such as the World Economic Forum or intergovernmental bodies such as the United Nations and the World Bank Group.
The World Economic Forum has described these ambitious platforms as “Lighthouse Projects,” which it describes as being “multi-stakeholder; transformative in seeking to correct systemic issues that can trigger a big change on a recognized challenge; future-oriented in seeking to leverage Fourth Industrial Revolution technologies and science; well-championed by industry with support from top level executives and directors; and with potential for growth or replicability.”46 Box 7.3 illustrates some of the ways in which the Forum has either catalysed, convened, incubated or hosted some leading global multi-stakeholder platforms.
Box 7.3 The World Economic Forum’s Role in Catalysing, Incubating and Hosting Multi-stakeholder Platforms
The World Economic Forum (WEF) has been recognized by the Swiss Federal Agency as an International Organization for Public-Private Cooperation. The Forum supports multi-stakeholder platforms (MSPs) at different stages by helping to launch, host or incubate partnerships addressing global, regional and industry challenges in such areas as global health, climate change, sustainable development and trade. The following examples illustrate some of these collaborative initiatives:
1. Examples of the Forum Providing a Platform to Help Catalyse or Launch an MSP
The Sustainable Markets Initiative (SMI): This initiative was launched by His Royal Highness The Prince of Wales at the World Economic Forum’s Annual Meeting in 2020. Building on his five decades as a champion for sustainability and corporate responsibility, including his role as President of the UK’s Business in the Community and the former Prince of Wales International Business Leaders Forum, this new initiative is working with the Forum, a vanguard of CEOs and others to accelerate systems-level change through new business and financing models and engagement with governments. Through industry and issue-specific roundtables and research, a ten-point action plan, TV media content, dialogues with government platforms such as the G7 and Terra Carta innovation and design labs, the SMI aims to accelerate and scale progress towards a sustainable future.
GAVI, The Vaccine Alliance: GAVI is an international public-private partnership striving to save lives and protect people’s health by increasing immunization rates around the world. The Alliance brings together international institutions such as the WHO and UNICEF, academics, civil society organizations, foundations, vaccine manufacturers and industry.47 GAVI was launched in 2000 at the Forum’s Annual Meeting.48 Since its founding, as of mid-2021, GAVI and its partners had vaccinated over 822 million children in some of the world’s poorest countries, helping to prevent around 14 million predicted deaths.49 It is playing a central role in efforts to improve COVID-19 vaccines equity by co-leading COVAX with the Coalition for Epidemic Preparedness, the World Health Organization and UNICEF. COVAX is the vaccines pillar of the COVID-19 Tools (ACT) Accelerator, which is itself a global collaboration working to accelerate the development, production and equitable access to COVID-19 tests, treatments and vaccines.50
The Global Fund: The Global Fund works in partnership with governments, the private sector, civil society and technical agencies to implement innovative models and alliances to end AIDS, tuberculosis and malaria. The Fund invests over US $4 billion each year to support research and treatment programmes in more than 100 countries.51 As a result of its efforts, 38 million lives have been saved since its founding, including a 50% reduction in deaths caused by AIDS, tuberculosis and malaria in countries where the Global Fund invests.52 The World Economic Forum has provided the Global Fund a platform to communicate and collaborate with partners since the Fund was launched at the Forum’s Annual Meeting in 2002.53
2. Examples of the Forum Hosting an MSP
Food Action Alliance(FAA): FAA builds on lessons learned over a decade from WEF’s New Vision for Agriculture. It is a network of food and agribusinesscompanies, banks and development finance institutions, UN organizations, non-profits and country-level initiatives hosted by the Forum. Member organizations act collectively to design and invest in country-level “flagship platforms” that aim to produce food “efficiently and sustainably, that is accessible to all, in support of a transition to healthier diets and improved environmental outcomes” aligned with the UN Sustainable Development Goals and Paris Climate Agreement. FAA’s network aims to leverage food commodity value chains and multi-stakeholder platforms to transform food systems, through innovation and coordination. To date, the Alliance has catalysed WEF’s network of cross-sector partnerships to build over 100 value-chain initiatives in 25 countries, engaging with several hundred private and public organizations.54
Centre for the Fourth Industrial Revolution: The Fourth Industrial Revolution is a Forum-led programme that facilitates cross-sector partnerships to develop and scale global governance models for responsible use of digital and other technology. The Centre is working with businesses, governments, academic institutions and civil society organizations “to develop, prototype and test pioneering collaborations and governance models to ensure the benefits of technology are maximized, and the risks accounted for.”55 Specifically, the Centre is working with its partners to design policy frameworks and governance protocol areas in the following focus areas: Artificial Intelligence and Machine Learning, Internet of Things and Urban Transformation, Blockchain and Distributed Ledger Technology, Data Policy, and Autonomous, Urban Mobility, and Drones and Tomorrow’s Airspace.56
The Global Battery Alliance (GBA): A circular and responsible battery value chain is one of the key drivers for achieving the Paris Climate Agreement. In 2017, the Forum convened a public-private collaboration platform of some 70 organizations, with the twofold goal of accelerating the deployment of batteries and developing guidelines and initiatives to ensure that these batteries are produced and used responsibly and sustainably, from mining to end-of-life. This requires collective efforts to address a variety of complex issues across the value chain from preventing human rights violations and ensuring safer working conditions, to lowering emissions and improving repurposing and recycling.57
The Tropical Forest Alliance (TFA): TFA is a collective action platform hosted at the Forum that brings together over 170 organizations to encourage the global transition to sustainable rural development and deforestation-free supply chains for commodities using palm oil, soy, beef and paper/pulp.58 Alliance partners include private sector representatives, governments, civil society organizations, Indigenous groups and multilateral organizations from across Latin America, West and Central Africa and Southeast Asia.59
3. Examples of the Forum Incubating an MSP
The Platform for Accelerating the Circular Economy (PACE): PACE is a public-private partnership focused on accelerating the transition to a circular economy. The Platform connects leaders in the public and private sectors with innovative solutions to rapidly scale best practices and drive systemic change.60 PACE is currently involved in scaling “circular economy action on plastics; electronics and capital equipment; food and agriculture; and textiles and fashion.” It was established by the Forum in 201761 and is now located at the World Resources Institute’s Center for Sustainable Business.62
2030 Water ResourcesGroup (2030 WRG): 2030 WRG is a public-private partnership hosted by the World Bank Group designed “to help countries close the gap between water demand and supply by 2030.”63 It currently engages 900 partners from across sectors, works in 14 countries around the world and has invested US$893 million in water-management programmes. These investments have helped to eliminate the discharge of nearly 300 million cubic metres of untreated wastewater, avoid the abstraction of half a billion cubic metres of freshwater and increase cost-effective storage capabilities.64 The Forum played a core role in establishing and incubating 2030 WRG, before it was spun-off to be hosted in the IFC and then the World Bank, and continues to be represented on the initiative’s global governance and steering committee.
TheGlobal Alliance for Trade Facilitation: This is a public-private partnership focused on “reducing the time and cost of conducting trade and to remove obstacles to the supply chain.” The Alliance is led by WEF along with the Center for International Private Enterprise, the International Chamber of Commerce and Deutsche Gesellschaft fur Internationale Zusammenarbeit. The Alliance helps countries more easily trade by promoting digitization and facilitating dialogue to facilitate the sharing of best practices.65 The programme has been or is currently involved in over 20 collaborative projects in South America, North and West Africa and Southeast Asia.66
Three of the most common objectives of multi-stakeholder platforms are to:
Mobilize resources to make essential systems work better for people and for the planet, for example, health, food and energy systems
Develop voluntary rules and standards to spread responsible business practices
Advocate and campaign to change public policies and attitudes
The following section looks at a few leading examples in each of these three areas, although the most effective multi-stakeholder partnerships often focus on achieving several of these objectives at the same time.
7.3.1 Mobilize Resources to Make Essential Systems Work Better for People and the Planet
A growing number of multi-stakeholder coalitions are being established with the primary goal of leveraging the necessary resources, such as funding, research and development, technologies, logistics and distribution capabilities, marketing and public awareness platforms and so on, that are needed to overcome systemic obstacles to improving people’s lives, livelihoods and learning or to make environmental ecosystems, large-scale landscapes and cities more resilient. These necessary resources and capabilities don’t reside in any one company or even government. As such, multi-stakeholder platforms are required to help coordinate them, especially at scale. Such platforms have been particularly active in efforts to make essential systems such as food, health, energy, transport, finance and education more just and inclusive for people and more environmentally resilient.
In the area of food and agriculture, for example, large-scale multi-stakeholder partnerships include the Alliance for a Green Revolution in Africa; the Global Alliance for Improved Nutrition; the Sustainable Agriculture Initiative (SAI) Platform; the World Economic Forum’s Food Systems Platform, including regional multi-stakeholder platforms such as Grow Asia; the Food and Land Use Coalition; the Global Agribusiness Alliance; the EAT Foundation; and a variety of commodity-specific value-chain coalitions, such as the World Cocoa Foundation, Aquaculture Stewardship Council, Better Cotton Initiative, Roundtable on Sustainable Biofuels, Global Roundtable on Sustainable Beef, Roundtable on Sustainable Soy and Bonsucro.
7.3.2 Develop Voluntary Rules and Standards to Spread Responsible Business Practices
Global frameworks agreed to by heads of state or their governments, such as the Universal Declaration on Human Rights, the ILO’s International Labour Standards, the OECD’s Guidelines for Multinational Enterprises, the Sustainable Development Goals, the Paris Climate Agreement and the UN Guiding Principles on Business and Human Rights, provide an essential foundation for promoting and implementing shared global values, norms and standards at national and local levels. Many companies use these to assess and improve their firm-level ESG policies and practices. Alongside global treaties negotiated and implemented by governments, there are a growing number of examples of multi-stakeholder platforms aimed at providing a voluntary mechanism for spreading more responsible practices by companies, civil society organizations and in certain cases governments. In some situations, these are a response to public governance gaps. In others, they are a complement to government efforts to regulate and incentivize systemic change in markets or to influence public behaviours on social and environmental issues.
Examples of a few multi-stakeholder platforms with these objectives include:
Improving natural resource governance: The Extractives Industries Transparency Initiative; the Voluntary Principles on Security and Human Rights; the Marine and Forest Stewardship Councils; and a number of commodity-specific certification programmes in agriculture, forestry and minerals.
Tackling corruption and money laundering: Transparency International’s sector and country-based Integrity Pacts, especially in large-scale construction, infrastructure development and public procurement; the Partnering Against Corruption Initiative; and the Wolfsberg Group (a coalition of major banks focused on developing frameworks and guidance to tackle financial crimes).
Enhancing digital governance: Establishing agile and multi-stakeholder global governance frameworks for disruptive digital technologies has become one of the most important and challenging global governance issues of recent years. Examples include the Centre for the Fourth Industrial Revolution, the Partnership for Responsible AI, the Partnership for Responsible Addressable Media and the Smart Cities Alliance, among others.
Respecting human rights in consumer goods, electronics and apparel supply chains: Examples include the Better Work Program, the Fair Labor Association, the Ethical Trading Initiative, the Global Network Initiative, the Bangladesh Accord and Alliance initiatives and the ACT (Action, Collaboration, Transformation) initiative. Box 7.4 profiles two of these examples that have both been in existence for over a decade.
Box 7.4 Improving Workers’ Rights and Working Conditions Alongside Enterprise Productivity and Profitability
Sixty million workers across the developing world rely on the garment industry for their livelihoods. Over 80% are women and many of them have migrated from rural areas—or even internationally—and garment work is their first entry into the job market. While factories are a valuable source of jobs and can help improve livelihoods of workers and their families, poor working conditions remain a pressing issue. Mechanisms to enforce labour laws are often poor and workers may not have a good understanding of their rights nor the skills to effectively realize them. Done differently, the global garment industry can potentially lift millions of people out of poverty by providing decent work, empowering women and driving inclusive economic growth and business competitiveness.
The Better Work programme was established in 2007 as a collaboration between the United Nations’ International Labour Organization (ILO) and the International Finance Corporation (IFC), part of the World Bank Group. It bringstogether all levels of the garment industry to improve working conditions and respect of human rights for workers and to boost the competitiveness of apparel businesses. The programme is active in 1700 factories employing more than 2.4 million workers in nine countries. As well as advising factories, Better Work collaborates with governments to improve labour laws and with major retail brands to ensure progress is sustained. The programme also advises unions on how to give workers a greater say in their lives, and it works with donors to help achieve broader development goals. An independent impact assessment by a multidisciplinary team from Tufts University analysed nearly 15,000 survey responses from garment workers and 2000 responses from factory managers in Haiti, Indonesia, Jordan, Nicaragua and Vietnam. It found a causal effect of the programme on a range of working conditions in garment factories, including preventing abusive practices (forced labour, verbal abuse, sexual harassment), curbing excessive overtime and closing the gender pay gap. It also documented Better Work’s impact on firm performance. For example, Supervisory Skills Training (SST), particularly among female supervisors, increased productivity by 22%; and factories experienced a rise in profitability (measured as the ratio of total revenue vs. total costs) due to their participation in the programme.67
The Fair Labor Association (FLA): This alliance of companies, colleges and universities and civil society organizations was established in 1999 to implement a Workplace Code of Conduct in the apparel sector that defines labour standards aimed at achieving decent and humane working conditions. The Code’s standards are based on International Labour Organization standards and internationally accepted good labour practices. Brands and companies affiliated with the FLA are expected to comply with all relevant and applicable laws and regulations of the country in which workers are employed and to implement the Workplace Code in their facilities, applying the highest standard when differences or conflicts arise. As of 2020, FLA and its participants were working to ensure respect for the rights of nearly 5 million workers in apparel and agriculture supply chains in 84 countries with company affiliates headquartered in 21 countries.68 Over its two decades of operations, the FLA has recognized that conducting workplace audits, while useful for identifying and remedying immediate problems and the most egregious violations of labour rights, is not sufficient to drive sustainable and progressive improvements in working conditions. In response, it has developed a Sustainable Compliance Methodology, which is more consultative and focused on understanding and addressing root causes and driving more systemic solutions. The organization and its participants have also started to focus on the implementation of living wages. These offer two examples of how a collaborative approach and diverse perspectives are helping not only to address human rights abuses but also to improve working conditions and workers’ voices, incomes and opportunities more broadly.
7.3.3 Advocate and Campaign to Change Public Policies and Attitudes
Multi-stakeholder coalitions focused on advocacy and campaigning are becoming increasingly important in efforts to accelerate and scale systemic change. These are coalitions where business leaders are joining forces with leaders in civil society, either in their individual or in institutional capacities, to advocate for progressive policy reforms or to change public attitudes and behaviours.
Ultimately, it will be unlikely to achieve large-scale and sustained impact on social and environmental issues without effective government interventions, whether in the form of policies, laws and regulations, fiscal incentives, or public sector investment and procurement vehicles. There is a growing need for companies, NGOs, academic institutions and where appropriate sub-national government entities to join forces to advocate for greater national government leadership on these issues.
Particularly in the current era of political polarization, populism and fake news, there is a need for leaders in business and civil society to step up and speak out publicly for the causes and the policies that they believe can make a positive impact on people’s lives, especially on the lives of people who do not have the same public voice or ability to influence policymakers that business and civic leaders have. In some cases, there is a need to publicly challenge certain government policies or practices that undermine the core values of inclusion, diversity, social justice and environmental sustainability.
Such public advocacy positions can be difficult and politically risky for individual business leaders and even companies to undertake alone, no matter how influential they are. Working collectively and on a multi-stakeholder basis can offer great potential for helping participating companies and their partners to share the risks of public advocacy, to amplify the voices for such advocacy and to increase overall influence and impact.
There are examples of successful and long-term public advocacy alliances in the area of global health. The 30-year commitment to eradicate polio, led by Rotary International and supported by the United Nations and Gates Foundation, among many other public and private partners, is probably one of the best examples of a successful global advocacy campaign. Its success has depended not only on targeted advocacy with key national governments, ministers of health and intergovernmental organizations, but also on the fact that the advocacy campaign has been anchored by on-the-ground action and innovation and has been enabled by a network of tens of thousands of local Rotary Clubs and hundreds of thousands of volunteers, many of them local business leaders, working in partnership with others.
Other global health coalitions that have strong public advocacy platforms, anchored by on-the-ground implementation programmes, include GAVI, the Vaccine Alliance, the Global Fund to Fight AIDS, Tuberculosis and Malaria, the Global Alliance for Improved Nutrition and the London Declaration for Neglected Tropical Diseases.
Over the past decade, a growing number of pioneering advocacy coalitions and campaigns with active business leadership have emerged to advocate for smart climate change policies and regulations. Box 7.5 illustrates a few of these climate advocacy coalitions that are playing a key role in advocating for both business action and government policies to increase the speed, scale and systemic impact of the response to the climate crisis.
Box 7.5 Business Leadership Coalitions to Advocate for Climate Smart Policies and Practices
No company can afford to ignore the growing momentum and business risks of climate change or the business opportunities associated with implementing effective mitigation and adaptation strategies. Simply put, sustainable enterprise value creation will be impossible without having a clear, science-based and data-driven roadmap for addressing the climate crisis.
Every company must start with their own business operations and value chain, focused on controlling what they can control. As the World Business Council for Sustainable Development and others have argued, companies must “[s]et an ambition to reach net zero greenhouse gas (GHG) emissions, no later than 2050 and have a science-informed plan to achieve it.” They must also be able to disclose how they are governing and managing their climate risks and opportunities as recommended by the Task Force on Climate-Related Financial Disclosure (TCFD), with a focus on their climate governance, strategy, risk management, and metrics and targets. And, they should be able to demonstrate that they are identifying and managing some of the nexus risks and opportunities between their climate, water, biodiversity, land-use, circular economy and nature-based solutions and between their climate and human rights commitments, in terms of issues such as climate justice and just transition.
Yet, even the best voluntary performance that the largest companies can achieve in their own business operations and value chains is not sufficient. Tackling climate change is a quintessentially complex, cross-boundary, systems leadership challenge. The only way to achieve the speed, scale and systemic impact that is required is through collective business and investor action on a global, industry-wide or location-specific basis and substantial changes in public policies, regulations and market incentives. Over the past decade, one crucial area of collective action by companies and institutional investors has been the creation of business-led, policy advocacy alliances, calling for governments to ramp up specific public policies and incentives.
There are a variety of advocacy coalitions that companies can join, both within their own industry sector, city or country of operation and beyond. Some of the most effective are based on a model whereby companies make their own specific, time-bound strategy, investment and operational climate commitments and targets, while at the same time, they also call on governments to implement specific, time-bound public policies, regulations and incentives to support the transition to a net-zero economy by 2050.
One long-standing example of this dual-track approach to collective action is Ceres. Established in 1989 following the Exxon Valdez disaster, Ceres has evolved into a global network of hundreds of leading institutional investors and corporations, focused on driving towards net-zero carbon emissions within their own enterprises and ecosystems as well as participating in other coalitions to drive large-scale transformation in markets and public policies. One of many “coalitions of coalitions” that Ceres has helped to spearhead is the We Mean Business Coalition. This platform was established in 2014 by the following business leadership organizations: Business for Social Responsibility, Carbon Disclosure Project (CDP), Ceres, The B Team, The Climate Group, Corporate Leader’s Group and the World Business Council for Sustainable Development (WBCSD). It was created as a business-led coalition to mobilize joint business commitments, advocate for specific public policies and provide a common and constructive business voice to support negotiations for the Paris Climate Agreement.
In the lead up to COP26, the UN Climate Conference, in November 2021, We Mean Business, alongside its founding partners, and other recently established corporate and investor climate platforms, such as Race to Zero, Race to Resilience, the Net-Zero Asset Owner Alliance, the Net-Zero Asset Manager Initiative, the Paris Aligned Investment Initiative, Climate Action 100+ and the Science-Based Targets Initiative, continued to coordinate their activities and advocacy efforts. We Mean Business has identified the following four policy priorities as part of its “All In for 2030” campaign:
1. Commit to achieving economy-wide net-zero emissions by 2050 at the latest and reversing nature loss by 2030.
2. Put forward strengthened, high quality Nationally Determined Contributions (NDCs) in line with a 1.5°C trajectory to halve global emissions by 2030.
3. Develop policies, implementation plans and laws across the economy that reach NDC and net-zero targets and are nature positive.
4. Develop policies that ensure a just transition that is fair, respects the needs of all people and countries and builds a more inclusive economy.69
These business-led coalitions recognize that the urgency for collective leadership and partnerships has never been greater. Any company focused on creating sustainable enterprise value should participate in collective action and advocacy.
7.4 Be a Corporate Champion for Partnerships, Even When They Are Difficult
The leadership challenge is clear. Simply put, it will be impossible for companies to create sustainable enterprise value at the firm level without addressing some of the systemic, external obstacles they face and without being stakeholders themselves in the vitality and resilience of their operating context. Engaging in partnerships and collective action with other stakeholders will be essential to achieving this, and business leaders must become champions for such collaborative efforts.
Clearly, governments must do more on their own. New public policies, laws and regulations will play a crucial role in making the shift to more inclusive and sustainable growth, including new corporate disclosure requirements, changes in corporate law and taxation regimes, true cost accounting and pricing signals for social and environmental goods and negative externalities, and public investment in health, education, training, disaster preparedness and green infrastructure. Public sector procurement will also be a key driver of change. Equally essential will be demands from investors and changes in other capital market institutions, such as stock exchanges, rating agencies and reporting and accounting platforms. Shifts in public attitudes and mindsets and in customer and consumer behaviours and demands will be important. Some of these will happen in the absence of partnerships, but most of them will require concerted and collective action by stakeholders, including companies.
Partnerships among companies and between business and other stakeholders can help to address some of the resource constraints, governance gaps, market failures, and cultural and social norms and behaviours that undermine the acceleration and scaling of business engagement in sustainability. They can serve as a platform for facilitating “systems leadership” by convening and coordinating the diverse actions of numerous actors and for building mutually reinforcing linkages between different sectors and goals to achieve system-level change.70
Yet, they are not a panacea. Most partnerships are difficult to build and challenging to sustain and scale. They often entail high transaction costs, and there is a need in many cases to strengthen partnership governance and accountability, as well as operational efficiency and effectiveness. And the more complex, system-level alliances often need substantial time, years rather than months, to deliver results.
In deciding whether to allocate resources to building or participating in a partnership, companies should ask themselves the following questions:
Leverage—will this partnership help us to increase the amount or diversity of resources (money, technologies, skills, expertise, capabilities, products, services, networks, facilities) to improve the scale or quality of our impact relative to what we could achieve acting alone?
Levelling the “playing field”—will this partnership enable us to fairly share risks, costs and burdens with others, especially our peers and competitors, and/or help us to develop common standards and approaches that will enable fairer competition and the spread of more responsible business practices in a way that the market doesn’t penalize us relative to competitors that don’t adhere to the same level of standards and good practice?
Legitimacy—will the partnership help us to build trust with key stakeholders, improve our social acceptance and licence to operate, enhance our reputation and/or extend our influence and voice in a credible and responsible manner?
Leadership—will the partnership help our company to be more effective leaders than we could achieve on our own in terms of shaping the agenda and bringing about systemic change within our industry or our locations of operation around particular environmental, social, economic and governance issues that are material or salient to our business?
If a partnership has the potential to further one or more of these goals, it is usually worth investing in. Even the most effective partnerships, however, offer hard lessons in terms of how to design, implement and sustain them, to ensure mutual accountability for performance and results, and to build the flexibility and trust to adapt to changing circumstances. Throughout the life of a partnership, especially resource intensive and complex, system-level alliances, business leaders and their partners should be assessing whether it meets some or all of the “success factors” outlined in Box 7.6.
Box 7.6 Questions to Assess Partnership Viability and Success Factors
The following success factors are a synthesis of over 40 academic and practitioner studies exploring what works in building partnerships, ranging from global multi-stakeholder platforms and pre-competitive sector-based business alliances to more traditional public-private infrastructure and project-level partnerships.
Key questions to ask
Do we have a shared purpose and understanding of the ecosystem and its stakeholders?
Key actions and practices to evaluate
1. Have we got a compelling agenda for change led by strong champions who are leaders in their own organizations and are able to take decisions, allocate resources, motivate and mobilize others, and support a long-term commitment?
2. Have we jointly agreed on a set of public commitments and a strategic plan for achieving them, based on rigorous consultation and relevant baseline evidence, with clearly defined roles and responsibilities for participants?
3. Do we understand the full value chain or ecosystem required for transformation and our ability to either holistically coordinate activities or stakeholders across this system or target specific interventions that mutually reinforce those of others?
Have we developed rigorous processes and operational alignment?
1. How effective is our implementation capability? Do we have dedicated and well-resourced “backbone support,” committed practitioners from participant organizations who have the necessary authority and skills to engage, and effective communication and conflict resolution processes that enable regular and rigorous dialogue and feedback?
2. Is there strong alignment with and leverage of our own and our partners’ core competencies and interests?
Have we established good governance and mutual accountability forprogress?
1. Do we have mutually agreed metrics and governance mechanisms to track performance and ensure rigorous oversight and accountability, both within the partnership itself and externally with relevant stakeholders, including beneficiaries and vulnerable groups where relevant?
2. Have we established participatory monitoring and evaluation approaches that facilitate shared learning and better decision-making in addition to ensuring transparency and accountability?
3. Have we “built in” enough flexibility to “course correct” and be adaptive based on evolving circumstances, disruptive events, failures, stakeholder feedback and lessons learned?
Source: Adapted from Jane Nelson. Partnerships for Sustainable Development: Collective Action by Business, Governments and Civil Society to Achieve Scale and Transform Markets. Corporate Responsibility Initiative, Harvard Kennedy School with the Business and Sustainable Development Commission, 2017
In conclusion, effective partnership building, especially among multiple stakeholders, requires new mindsets and skill sets on the part of individuals and new capabilities and incentives on the part of institutions. It requires patience, persistence and a long-term commitment in an era of short attention spans, accelerating and disruptive change and short-term performance pressures on companies and governments alike.
None of this is easy. Yet, it is essential work. The ability to galvanize and convene other stakeholders to co-create effective partnerships for achieving sustainable enterprise value at the level of the firm, and more inclusive and sustainable growth in society more broadly, has become one of the essential leadership imperatives for the twenty-first century. One of the single most important lessons that has come out of 20 years of studying partnerships, especially complex, multi-stakeholder platforms, has been the crucial role played by corporate champions—by CEOs and senior executives either who are willing to do the hard work of partnership building themselves or who provide the space, resources and support for their teams to do so, including the long-time horizons often required to deliver results.71
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This chapter draws on other work by the author on building partnerships, including:
Jane Nelson, “Toward new models of leadership and partnership,” in Nina Montgomery (ed), Perspectives on Impact: Leading Voices on Making Systemic Change in the Twenty-First Century. Routledge, 2019.
Jane Nelson. Partnerships for Sustainable Development: Collective Action by Business, Governments and Civil Society to Achieve Scale and Transform Markets. Corporate Responsibility Initiative, Harvard Kennedy School. Report commissioned by the Business and Sustainable Development Commission, 2017.
Jane Nelson, “Scaling Up Impact through Public–Private Partnerships,” in L. Chandy, A. Hosono, H. Kharas, and J. Linn (eds), Getting to Scale: How to Bring Development Solutions to Millions of Poor People. Washington, DC: The Brookings Institution Press, 2013.
Lisa Dreier, David Nabarro and Jane Nelson. Systems Leadership for Sustainable Development: Taking Action on Complex Challenges through the Power of Networks. Cambridge, MA: Corporate Responsibility Initiative, Harvard Kennedy School, 2019.
Richard Gilbert and Jane Nelson. Advocating Together for the SDGs: How Civil Society and Business Are Joining Voices to Change Policy, Attitudes and Practices. Cambridge, MA: Corporate Responsibility Initiative, Harvard Kennedy School and Business Fights Poverty, 2018.
Jane Nelson and Beth Jenkins. Tackling Global Challenges: Lessons in System Leadership from the World Economic Forum’s New Vision for Agriculture Initiative. Cambridge, MA: Corporate Responsibility Initiative, Harvard Kennedy School, 2016.
Nelson, Jane. Building Partnerships: Cooperation between the United Nations system and the private sector. United Nations, Department of Public Information, NY, 2002.
For more details and examples on each of these levels of partnership, see: Jane Nelson. Partnerships for Sustainable Development: Collective Action by Business, Governments and Civil Society to Achieve Scale and Transform Markets. Corporate Responsibility Initiative, Harvard Kennedy School and Business and Sustainable Development Commission, 2017.
Grayson, David and Jane Nelson. Corporate Responsibility Coalitions: The past, present and future of alliances for sustainable capitalism. Greenleaf Publishing and Stanford University Press, 2013.
See also:
International Chamber of Commerce (ICC) and UN Global Compact (2015). Scaling Up Sustainability Collaboration: Contributions of Business Associations and Sector Initiatives to Sustainable Development.
Flaherty, Margaret and Ann Rappaport (2015). Agents of Change: Sustainability and Industry Trade Associations—An Evolving Value Proposition. Business School Lausanne and Tufts University.
Flaherty, Margaret and Ann Rappaport (2015). Agents of Change: Sustainability and Industry Trade Associations—An Evolving Value Proposition. Business School Lausanne and Tufts University.
Grayson, David and Jane Nelson. Corporate Responsibility Coalitions: The past, present and future of alliances for sustainable capitalism. Greenleaf Publishing and Stanford University Press, 2013.
Grayson, David and Jane Nelson. Corporate Responsibility Coalitions: The past, present and future of alliances for sustainable capitalism. Greenleaf Publishing and Stanford University Press, 2013. Page 64.
Lisa Dreier, David Nabarro and Jane Nelson. Systems Leadership for Sustainable Development: Taking Action on Complex Challenges through the Power of Networks. Cambridge, MA: Corporate Responsibility Initiative, Harvard Kennedy School, 2019.
