PBSPVRO

Tuesday, March 04, 2008

Continuation of the highlights of the UN Resident Coordinator's Keynote Address during PBSP's 20th VAMM

On global warming

[At this point] I want to make special mention of the issue of global warming and climate change, the effects of which are now beckoning and being felt worldwide in weather pattern changes that have wreaked havoc and costs in many countries. Global warming is now unequivocal. Emissions of carbon is alarming, something that humankind has control of, and if not impeded, may affect the achievement of MDGs.

The threat posed by global warming warns about unprecedented reversals in poverty reduction, nutrition, health and education. The private sector is a critical partner in the promotion of a sustainable environment. Adaptation to climate change, the search and use of alternative and renewable forms of energy and the promotion of changes in lifestyle, specifically how humankind uses resources are areas that the private sector can look into, for example, opportunities in carbon trading.

Challenges to the business sector

Undertake advocacy and awareness raising partnerships with stakeholders.

Companies especially PBSP can partner with other stakeholders to take a leadership role in championing, advocating for, and contributing to resolving different issues, including the sensitive issue of corruption. It is important for business to be aware of the UN Convention Against Corruption (UNCAC)and to be active in shaping the regulations that will guide industry.

Assist in scaling-up what works, and expand your experiences and share CSR best practices to those that may benefit from them.

There is a need to facilitate more discussions among the various business associations because much can be done through the collective action of companies. The most significant contribution of the private sector to the MDGs is to invest and to be successful and to do so in a socially and environmentally responsible manner – thereby creating enormous social benefits including employment and income generation. The challenge for governments, business, NGOs and other societal actors is to find ways to scale-up collaborative efforts in order to achieve wider impact.

Assist and serve markets at the “bottom of the pyramid.”

The approach to the Bottom of the Pyramid is about creating the conditions for a growing and thriving economy able to meet the MDG. Businesses are constantly developing new products to suit the increasing demands of the consumers, to better please their needs. Unfortunately, few businesses are focusing on the world biggest market in terms of number of consumers, a market bigger than China, the US and the European Union together: The Bottom of the Pyramid (BOP). Globally, the BOP is made up of 4 billion people who earn less than US$ 1,500 per year.

Research shows that the poor consumers usually pay more than the rich consumers for basic services, while the quality of goods that the poor people purchase is almost always substandard. The Bottom of the Pyramid is largely served by the informal sector and the advantages of economies of scale are thus missing at the
bottom of the pyramid.

But pursuing the Bottom of the Pyramid approach requires public-private partnerships to minimize risks and bring the risk and reward ratios into balance. This partnership would then facilitate access to financing, assist in the development of skills and knowledge, and enable sustainable delivery of basic services. This partnership can include support for initial exploration of innovative ideas, field-testing, and appropriate investments in infrastructure and capacity building. Essentially, public sector can help to reduce risks that prevent private companies from reaching to the Bottom of the Pyramid.

Forming ecosystems and building/strengthening local networks.

One of the most compelling ways to help companies succeed is by increasing the power of the linkages and networks they are part of. Local networks can bring many benefits by:

a. Enabling the transfer of skills, technology and quality.
b. Ensuring that foreign direct investment has positive spillover effects.
c. Bringing companies into the formal sector.
d. Creating the capacity to govern transactions through commercial contracts.
e. Opening markets and the supply of inputs to smaller firms through networks of larger partners.
f. Improving the ability of small and medium enterprises in such networks to get financing on commercial terms.
g. Increasing the wages, employment standards and productivity of local companies.
h. Increasing the choice and lowering the prices for poor consumers by bringing a greater variety of goods to market.

In social investment and philanthropy partnerships, the private sector can provide financial support, contribute volunteers or expertise, or make in-kind contributions, including product donations.

Mobilizing resources such as capital, products, skills and volunteers, private-sector organizations can deliver a wide range of essential services, including educational training, micro-credit schemes, environmental management, as well as critical goods such as anti-malaria bed nets and condoms.

Partnering with the United Nations through the UN Global Compact

Partnerships between the private sector and the UN have become increasingly popular in recent years, producing innovative solutions across a broad spectrum of local and global initiatives and laying the foundation for greater engagement.

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