Monday, March 14, 2016

Strategic CSR - Sustainable Development Goals

The article in the url below critiques the newly announced Sustainable Development Goals (SDGs). While applauding the intention behind the goals, the author's critique highlights what he sees as a lack of focus:

"In a bid not to offend anyone, the new development agenda is expected to include an incredible 169 targets for investment. Giving priority to 169 things is the same as giving priority to nothing at all."

The author's argument highlights the sort of cost-benefit analysis that those who developed the SDGs clearly shied away from. In other words, he focuses on the relative value that a dollar spent in pursuit of each goal would bring:

"Consider how Ebola became the threat of the moment last year, to the point that American politicians were threatening travel embargoes against West Africans. Hundreds of millions of dollars were spent in response, much of it for specialized hospitals and other facilities that have hardly been used. Ebola was a genuine regional tragedy, claiming as many as 20,000 lives. But in the same year, far from the spotlight, some 600,000 people across the globe died from the less sensational illness of malaria, and around 1.5 million were killed by tuberculosis."

Another example of what the author would no doubt characterize as our misplaced priorities:

"The World Health Organization estimates that the effects of climate change are currently responsible for 141,000 deaths annually. If we look far ahead, to 2050, the death toll is expected to climb to 250,000. By contrast, some 4.3 million people will die this year from indoor air pollution. That is the direct result of poverty, of almost three billion people using dung and wood to heat and cook. Another 3.7 million people will die this year from outdoor air pollution."

The author arrives at his conclusions because he asked a group of people who have been thinking about these problems for some time:

"Over the past year, the Copenhagen Consensus Center, the think tank that I direct, asked 82 leading economists to work out exactly how much good could be achieved by investing in the 169 [targets]. We asked them, in short, to use the standard tools of economics to calculate the costs and benefits of achieving each target. The results were surprising. Freer trade from completing the World Trade Organization's Doha agreement would return more than $2,000 of extra value for each dollar spent to retrain and compensate displaced workers. It would lift 160 million people out of extreme poverty, giving every person in the developing world an extra $1,000 in income every year by 2030. By comparison, money transfers—paying the poorest people enough to lift them out of poverty—would have huge administrative challenges and institutional deficiencies, with benefits of only $5 for every dollar spent."

Conducting this analysis across all 169 targets results in a significantly narrower target:

"What did the economists conclude about the U.N.'s 169 targets? That concentrating on just 19 of them—not just the ones noted above but also such things as increasing access to family planning, fighting malaria and tuberculosis, and combating malnutrition—would produce, on average, more than $30 in benefits for each dollar spent, which betters the U.N. proposal by a factor of four. That is the same as quadrupling the aid budget."

Take care

David

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

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