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  • UN Global Compact Network Malaysia & Brunei

Sustainable Development Goal 1: No Poverty

An Action Framework for Businesses to Eradicate Poverty

Businesses not only meet the needs of communities with purchasing power but create more of them. They can create decent sustainable jobs, foster economic activity through heir supply chains, and contribute tax revenues for basic services and infrastructure.

This role of businesses is becoming more important as we move towards the 2030 Agenda of eradicating poverty according to SDG 1, and as the task becomes increasingly monumental. The pace of poverty reduction is decelerating, with a "nowcast" of 8.6% in 2018. Baseline projections suggest that 6% of the world population will still be living in extreme poverty in 2030, missing the target of ending poverty. Hence, initiatives from all stakeholders need to be amplified if this goal is to be achieved and this projection overcome.

The DNA of business is profit and incentive. Does the goal poverty eradication by 2030 fall within this framework? It does for three (3) favorable outcomes to business:

Low-income populations are a company's employees

Addressing poverty among a company's employees requires changing a company's wage standards, developing individuals' capacities an increasing benefits. Proactively doing so increases productivity and has reputational benefits; abstaining is a material risk.

Low-income populations are consumers

Low-income populations are the new supply chain

Framework for Business Action

Business Action 1: Engage in the creation of secure and decent jobs, especially in least developed countries and for vulnerable populations.

One of the most effective ways to reduce poverty is to create decent jobs, that is, to offer people a sustainable and dependable source of income, decent working conditions, and support for basic amenities such as health, housing and sanitation. Given that most of the world’s poorest people reside in least developed countries, leadership can take the form of responsible and inclusive scaling up of operations in these countries, in ways that are designed to support the local economy and generate secure employment for local communities. Companies can also lead by investing in growing business in labour-intensive industries.

Example Practice

An international food company commits to sourcing a significant percentage of its raw material from small-holder farmers in developing countries to boost local employment

Business Action 2: Implement programs to economically empower disadvantaged groups

All companies should be equal opportunity employers, ban discrimination against vulnerable groups, and adopt policies that support inclusion so as to contribute to economic empowerment. Leading companies can implement special programs to economically empower ethnic and racial minorities, women, persons with disabilities, the elderly and other vulnerable groups that have historically faced discrimination.

Example Practice

  • An international accountancy firm provides targeted internships and employment opportunities to young people from disadvantaged backgrounds in its locale

  • An international beverage company leads on employing people with disabilities. It has a dedicated program that provides targeted professional and personal growth opportunities to people with disabilities through training, education, community events, networking etc.

Business Action 3: Ensure decent working conditions for all employees across the business and supply chain

A key requirement is that companies have robust procedures to identify, prevent, monitor, mitigate and, if necessary, take remedial action against any activity that contributes to poverty in its own operations and supply chain. These procedures can be guided by the UN Guiding Principles and the UN Global Compact’s Poverty Footprint Tool. Leading companies take action to control poverty impacts throughout their end-to-end operations, finding and sharing novel ways to do this, and inspiring peers and suppliers to replicate their actions.

Example Practice

A clothing company takes robust measures to build suppliers’ capacity to pay a living wage and promotes the use of digital payments to ensure that progress can be properly tracked and evaluated

Business Action 4: Create and market goods and services that specifically cater to, and aim to improve the lives of, vulnerable groups

Economically disadvantaged groups often have to pay disproportionately high prices for basic goods and services. There is a large untapped market that companies can cater to, which can not only make business sense but can also constitute leadership on Goal 1 by raising living standards and helping vulnerable communities.

Example Practice

  • A start-up in India develops feminine sanitary products that are sold at low price points to help women conduct activities as normal while menstruating. It hires street vendors to distribute its products across urban settlements

  • A bank designs micro-loans with soft pay-back conditions, and mobile banking apps to reach unbanked communities in rural Bangladesh. It collaborates with regional authorities to help increase the penetration of ID cards so that customers can easily verify their identity and access financial services.

Key Points of Consideration when executing ‘SDG 1: Ending Poverty’ plans

1. Intentionally

  • Is your company committed to supporting the achievement of Goal 1? Have you developed a holistic strategy that reflects this commitment, covering end-to-end operation and the wider community?

  • Are you committed to learning from your actions and do you have processes in place to improve them accordingly?

  • Is your strategy supported by the highest levels of management, including the Board of Directors?

2. Ambition

3. Consistency

4. Collaboration

5. Accountability

Engaging the 4 billion people at the base of the economic pyramid in a responsible and inclusive manner may be the biggest business opportunity of our day. If development efforts have failed and globalization is further impoverishing the world’s most disadvantaged people, then corporations surely deserve part of the blame. If, on the other hand, global poverty is declining and global integration is helping people to escape poverty, then corporations are presumably part of the solution.


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