How can the private sector,i understood as organisations engaging in profit-seeking activities, contribute to realising the 2030 Agenda for Sustainable Development globally? In different ways, the private sector has already led many voluntary initiatives which contribute to sustainable development. However, to realise our collective transition towards a system that offers people worldwide a dignified life and respects our planet, both companies and governments must take further action.
This paper highlights what the European Union (EU) and its Member States should do to create an environment that maximises the potential of the wide range of private sector actors to contribute to the implementation of Agenda 2030. Recommendations cover diverse interconnected policy areas: development, trade and investment, taxation, financial regulation, competition, justice, access to remedy and how decisions are made in Europe.
This may seem like an overambitious shopping list – it is not. It is a ten-point roadmap that needs to be considered seriously and will require concerted action if the EU wants to play its full part by 2030. This paper gives specific recommendations for each of the following ten areas for action, calling on the EU and its Member States to:
1. Abandon the “one-size fits all” approach to the role of the private sector in development, and focus on micro, small and medium enterprises (MSMEs) and social economy enterprises in local and regional value chains and trade.
2. Adopt mechanisms to avoid the corporate capture of decision-making processes, among others: legally binding lobby registers and stronger ethics regulations.
3. Align the financial system with social and environmental agendas, integrating environmental, social and governance factors in policy and regulatory frameworks on public and private finance.
4. Ensure the public delivery of essential services and acknowledge that private finance cannot be a substitute for gender-responsive public investment.
5. Ensure companies pay their fair share of tax where they operate by creating greater transparency and better reporting systems.
6. Ensure the sustainability chapters of investment treaties are as enforceable as the provisions protecting investors.
7. Ensure business enterprises operating outside the EU respect human rights and the environment and contribute to sustainable development.
8. Reform EU competition law and set guidelines to allow for initiatives that increase sustainability collectively per sector without breaching EU competition law.
9. Ensure the respect of development effectiveness principles in consultation with local communities and civil society organisations; integrate the principles in development finance institutions’ processes and approaches.
10. Ensure transparency and accountability when public finance is used to leverage private investments in developing countries.
i The title of this paper and the paper itself generally refer to the “private sector” because this term is used by the EU in its policies and tools. We however unpack this notion, showing that it is too broad and to avoid misunderstanding and “one-size-fits-all” policies, the EU should favour a more precise terminology. Area for action n°7 of this paper refers to “business enterprises” because that is the terminology used in the UN Guiding Principles: the universally adopted standard for corporate responsibility in human rights.