Investors Can Have Both Financial, Social Returns, Says Business Leader as Second Committee Discusses Sustainable Development Challenges

6 November 2013

Investors Can Have Both Financial, Social Returns, Says Business Leader as Second Committee Discusses Sustainable Development Challenges

6 November 2013
General Assembly
Department of Public Information • News and Media Division • New York

Sixty-eighth General Assembly

Second Committee

31st & 32nd Meetings (AM & PM)

Investors Can Have Both Financial, Social Returns, Says Business Leader


as Second Committee Discusses Sustainable Development Challenges


People and institutions with “deep pockets” were more likely to invest in businesslike models effecting social change because they tended to be more efficient and results-oriented, Tokunboh Ishmael, Co-Founder and Managing Director of Alitheia Capital, told the Second Committee (Economic and Financial) today.

After engaging in and donating to the purely charitable models, investors wanted to invest and get a return, both financially and socially, she said during the Committee’s joint meeting with the Economic and Social Council on “Finding solutions for addressing sustainable development challenges and accelerating the achievement of the Millennium Development Goals”.

With Néstor Osorio (Colombia), President of the Economic and Social Council, and Abdou Salam Diallo (Senegal), Chair of the Second Committee, leading and Sade Baderinwa, WABC-TV News Anchor as Moderator, the discussion featured the following panellists:  Ms. Ishmael; Paul Macmillan, Global Industry Leader, Public Sector, Deloitte Touche Tohmatsu Limited; Parag Gupta, Founder, Waste Venture; Luther Ragin Jr., President and Chief Executive Officer, Global Impact Investing Network; Jos Verbeek, Lead Economist, Development Prospects Group, World Bank; and, Neo Ek Beng Mark, Deputy Permanent Representative of Singapore to the United Nations.

Ms. Ishmael said she was inspired to effect change after she learned that half a million children died yearly from smoke from cooking fires.  Her organization, Alitheia, was working with big businesses to make it possible for low-income families to switch to clean cooking fuels.  For “big oil” businesses getting involved in the initiative to provide safer cooking fuel options made sense.  They saw that they could significantly increase their market share.  Alitheia helped them redesign products and distribution methods, she noted, underlining that an integrated approach was critical to solving social problems.

Alitheia also supported and financed businesses that developed financial markets empowering low-income families to save for a rainy day, she said.  In Nigeria, where less than 30 per cent of the people had a bank account, while more than 80 per cent had cellular phones, Alitheia financed mobile banking solutions.  As a result, that had attracted traditional venture capitalists to make investments.  In many parts of Africa, less than 20 per cent of schools provided a safe teaching environment including in areas of infrastructure, water and sanitation.  Her organization had financed low-cost building technologies to enable affordable social infrastructure.

Mr. Diallo said the world was at a critical juncture.  Despite the progress made in fighting poverty, hunger and diseases, more than 1 billion still lived in extreme poverty and hunger.  Inequalities persisted, as did local and global environmental threats, while climate change and disasters had reached unprecedented levels of dangers, and conflict and insecurity continued in many places around the world.  Hence, it was critical that Governments and development partners redoubled efforts to achieve the remaining Millennium Development Goals and ensured a transition to the post-2015 development agenda.

Mr. Osorio said responsibility in the area of sustainable development was great and finding solutions to the world’s urgent problems was even greater.  Partnerships were essential in successfully framing a post-2015 development agenda.  Today’s challenges required that “all of us work closely together to ensure synergies and enhance the impact of our work”.  He emphasized the importance to engage with the private sector, whose support was crucial.  Both Governments and the international community could benefit greatly from the private sector’s expertise and experience.  The reflection of the needs of society could come from the private sector.  Since 2008, the Economic and Social Council had convened an annual forum to discuss with Governments ways partnerships could be strengthened to achieve the Millennium Development Goals.

Ms. Baderinwa said today’s topic of discussion was at the heart of the development goals of the United Nations.  Setting an ambitious global agenda was part and parcel of the Organization’s Charter but achieving that was not easy, she pointed out, saying that now was the time for commitment, perseverance and innovation.  Much had changed in the world in how things got done and how Governments functioned.  New innovators were closing gaps Governments could not.  Entrepreneurs were finding ways to meet citizens’ needs from fighting malaria to providing low-cost housing.  While official development assistance (ODA) was part of the solution, it alone could not solve the world’s biggest problems.  Government had to see things differently, she added.

Mr. Macmillan said the Solution Economy was a study that evaluated the large economic space occupied by non-Government entities which were responsible for improved public performance and outcomes.  For example, Kiva was a crowd-funding platform set-up in 2005 to attract investment to businesses in emerging markets through which individuals could make loans as small as $25 to finance projects around the world.  To date, Kiva had attracted nearly half a billion dollars in funding, with more than 1 million lenders and a 99 per cent repayment rate.  That exemplified a new and highly effective form of micro-financing.  Another example of filling the space between what Governments could provide and what citizens needed was Safaricom.  Through the communications provider, 15 million Kenyans gained access to financial services, which now represented more than 20 per cent of Kenya’s gross domestic product (GDP).

Those two projects, he said, were not stand alone examples, but part of an emerging trend of “wavemakers” that contributed trillions of dollars to economies.  “Wavemakers” would be partners of the future, and included citizens that made loans to small businesses around the world, as well as public innovators and social entrepreneurs.  All those different elements came together, often organically, but also through Government facilitation to create the Solution Ecosystem, which provided a fertile ground for impact markets and innovation.

Mr. Gupta said social entrepreneurs, including “wavemakers”, could contribute to the achievements of the Millennium Development Goals.  A week’s worth of urban waste in India constituted the weight of approximately two Empire State buildings.  Urban governments spent a large portion of their budgets trying to deal with the problem of solid waste, however, only about 60 per cent of it was collected in many urban areas, often by individual waste-pickers.  He said that a group of social entrepreneurs created a company that offered free training to municipal staffs on how to do doorstep solid waste collection.  The company then took the waste collected and sold the compost to local farmers, as well as the recyclables.  Data analysis was a key component of project success, as it honed operations and built industry standards, while encouraging processes that protected the environment and promoted sustainable development.

He said that Governments could help social enterprise spur the achievement of the Millennium Development Goals by incentivizing investment to social enterprise and creating regulations that were not impediments.  From his experience, money was not always the answer — strategic investment was often far more effective.  Governments should also encourage commercial financial instruments for a line of products and services designed for low-income borrowers.

Mr. Ragin said that his organization, Global Impact Investing Network, existed to mobilize private capital for social purpose and human progress.  Impact investing was investments made into companies, organizations, and funds with the intention to generate measureable social and environmental impact alongside a financial return.  It was not grant making, although grant making could play a role in enabling an environment that encouraged investing.  Investments worldwide totalled $212 trillion, with impact investing comprising a small fraction of that.  He outlined several barriers the industry faced.  Those included a lack of awareness, leadership, organization, and sharing of best practices.

He highlighted several ways infrastructure was being developed in the area of impact investing including through a database and social and environmental metrics that would achieve greater uniformity.  Additional areas of engagement aimed to create a platform for knowledge-sharing.  One of the things that often scared the private sector was the unknown, he said.  On research and education, his organization published practitioner-focused research and disseminated news and events.  Recent efforts had been to help philanthropists understand how they could deploy resources that would assist commercial investors to enter markets they usually would not.

Mr. Verbeek said global progress towards achieving the Millennium Development Goals needed to be accelerated.  Progress varied by region and country.  United Nations agencies have looked internally to identify ways they could better support progress toward the Goals.  There were now far fewer people living in poverty than in 2000 and there had been an increase in resource availability, meaning that countries had more money to help their citizens than in the past.  The relative importance of international financial flows had also changed since the inception of the Millennium Development Goals.  The role of the private sector to help finance development solutions had become increasingly important, not only because it could be more effective at times, but also because they had access to greater resources.

Mr. Neo, responding to the panellists, said ODA remained central and essential for achieving the Millennium Development Goals and would remain crucial for the post-2015 development agenda.  Global partnerships and innovative financing should only compliment ODA and should not be used to justify reductions.  As the recent global financial crisis demonstrated, developed countries were facing increased pressures to reduce ODA due to their own domestic finances.  That assistance had dropped by 6 per cent every year since 2010 and amounted to only 0.3 per cent of GDP, which was significantly less than the 0.7 per cent that was pledged following the inception of the Goals.

He stated that the best multi-stakeholder partnerships were local, exigent, opportunistic and expedient.  There needed to be a clear understanding of the problem and possible solutions.  He questioned the scalability of the projects detailed during the discussion, as it seemed clear that many of the solutions would not work on an international scale.  Public-private partnerships also needed to be carefully structured, with a clear understanding of the motivations of their partners.  Private companies were profit driven and often only had a short-term focus, which needed to be taken into account when negotiating such partnerships.  Innovative financing may work on a national context, but it may not be appropriate in the global context.  He believed it was unfair for developed countries to lecture developing countries on their domestic policies, while there were many doubts about whether innovative financing would continue once the heavy flow of money following the global financial crisis dried up.

In several rounds of questions and comments, delegates emphasized the role of private-public sector partnerships in forging the sustainable development model.  For their part, Governments had a responsibly to create an environment and space conducive for such partnerships to flourish.

To Mr. Gupta’s point, the representative of Venezuela said garbage was created by the pattern of unsustainable consumption and production, directly related to the unequal distribution of wealth.  The rich were consuming an unlimited amount of non-essential items, contributing to an increase of waste.

Responding to the representative of Singapore’s statement, Mr. Ragin said Government resources alone would not be sufficient enough to solve problems.  Emphasizing the need to achieve scalable solutions, he stressed that Governments must recognize that people had diverse interests.  The objective was to present solutions that were “win-win”.  Adding to that, Mr. Verbeek said it was important to examine community solutions and how they could be applied on a greater scale.  Local conditions required Governments to deliver services, but on a national level solutions could come through the private sector.

Mr. Macmillan said that the evolution of a Solution Economy was complementary to what Governments were doing.  Markets brought a number of innovative solutions to global problems.  Multilateral partnering was different than what was done in the past, which tended to be more bilaterally-focused.

The representative of the Bahamas emphasized the need to include women and youth in development.  To that, Ms. Ishmael said that providing cooking gas to families had made a larger impact which freed up time for the woman doing the cooking.  It also impacted the number of girls that could attend school because they were no longer needed full-time to help with household chores.

The representative of Peru asked the panel about major obstacles to progress in attracting investments and about incentives Government’s could offer the private sector to make those partnerships more sufficient.  Responding to that, Ms. Ishmael said investors tended to focus on bigger and better projects.  When talking about mission driven investments, they began to think about charity and aid, and their interest dropped off.  Governments in Africa focused more on larger infrastructure.  What was needed was a bottom-up approach to drive growth, because a top-down approach alone was not working.  Also responding to Peru, Mr. Verbeek said Governments had a responsibility to establish regulations for collecting data to track national development progress.

In response to Mexico’s delegate asking about Government incentives to ensure more investment in social projects, Mr. Verbeek said first and foremost, citizens must be educated on the availability of basic social services.

Answering Brazil’s question about the issue of competition for financial resources, Mr. Ragin said the issue was not about a lack of resources for investment, but rather a lack of information provided regarding how their resources could be matched with engagement opportunities.

A representative of NGO Sustainability also participated in the discussion.

In the afternoon, the Committee met to hear the introduction of several draft resolutions relating to items on its agenda.

Introduction of Draft Resolutions

The representative of Fiji introduced, on behalf of the “Group of 77” developing countries and China, drafts titled, respectively, “International Day for the Promotion and Protection of Telework” (document A/C.2/68/L.18); “International trade and development” (document A/C.2/68/L.8); “Unilateral economic measures as a means of political and economic coercion against developing countries” (document A/C.2/68/L.12); “International financial system and development” (document A/C.2/68/L.4); “External debt sustainability and development” (document A/C.2/68/L.15); “Commodities” (document A/C.2/68/L.16); and, the “Follow-up to and implementation of the outcome of the 2002 International Conference on Financing for Development and the 2008 Review Conference” (document A/C.2/68/L.25).

He then submitted the following draft resolutions on sustainable development:  “Oil slick on the Lebanese shores” (document A/C.2/68/L.26); “World Wildlife Day” (document A/C.2/68/L.23); “Implementation of the United Nations Convention to Combat Desertification in Those Countries Experiencing Serious Drought and/or Desertification, Particularly in Africa” (document A/C.2/68/L.22); “Protection of global climate for present and future generations of humankind” (document A/C.2/68/L.19).  He also tabled a draft on the “Implementation of the outcome of the United Nations Conference on Human Settlements (Habitat II) and strengthening of the United Nations Human Settlements Programme (UN-Habitat)” (document A/C.2/68/L.14).

He then submitted the following draft resolutions:  “Role of the United Nations in promoting development in the context of globalization and interdependence” (document A/C.2/68/L.17); “Science and technology for development” (document A/C.2/68/L.11); “Follow-up to the Fourth United Nations Conference on the Least Developed Countries” (document A/C.2/68/L.9); and, “Specific actions related to the particular needs and problems of landlocked developing countries:  outcome of the International Ministerial Conference of Landlocked and Transit Developing Countries and Donor Countries and International Financial and Development Institutions on Transit Transport Cooperation” (document A/C.2/68/L.10);

On eradication of poverty and other development issues, he introduced draft resolutions titled “Implementation of the Second United Nations Decade for the Eradication of Poverty (2008—2017)” (document A/C.2/68/L.3); “Women in development” (document A/C.2/68/L.7); and “Human resources development” (document A/C.2/68/L.6).

Finally he tabled draft resolutions on the “Operational activities for development of the United Nations system” (document A/C.2/68/L.2); “South-South cooperation” (document A/C.2/68/L.5), and “World Soil Day and International Year of Soils” (document A/C.2/68/L.21).

The representative of Mexico then introduced a draft on the “International Year of Light and Light-based Technologies, 2015” (document A/C.2/68/L.13) saying it sought to create partnerships with Governments, the private sector, and civil society for the benefit of all.  Increased education in the science and technologies of light were vital for addressing challenges such as sustainable development and energy.

The representative of Turkey, on behalf of his country and Pakistan, then tabled a draft resolution titled “International Year of Pulses, 2016” (document A/C.2/68/L.20), emphasizing its main objective was to raise awareness of the contribution of pulses to food security and nutrition as well as the alleviation of hunger and rural poverty around the world.  In developing countries where food security was a major challenge, pulses represented an important source of nutrition needed for a healthy diet, he added.

The representative of Lithuania submitted a draft resolution on “Towards global partnerships:  a principle-based approach to enhanced cooperation between the United Nations and all relevant partners, in particular the private sector” (document A/C.2/68/L.24).

The representative of Egypt then introduced the draft resolution titled “Permanent sovereignty of the Palestinian people in the Occupied Palestinian Territory, including East Jerusalem, and of the Arab population in the occupied Syrian Golan over their natural resources” (document A/C.2/68/L.27).

* *** *

For information media • not an official record
For information media. Not an official record.