Societal Dimensions of Sustainability: A Systems View

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Societal Dimensions of SustainabilityA Systems
View

• Starting Point The End of Poverty by Jeffery
  Sachs
• Drafted for your consideration by Working Group
  on Social Dimensions

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We as a group think it makes sense to adopt the
Millennium Development Goals as a framework to
think about social responsibility.

• Eradicate extreme poverty and hunger
• Achieve universal primary education
• Promote gender equality
• Reduce Child mortality
• Improve maternal health
• Combat AIDS, malaria, and other diseases
• Ensure environmental sustainability
• Develop a global partnership for development

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Goal of This Framework

• We believe that it would be useful for companies,
  Governments and NGOs to have a shared and vetted
  framework around the social dimensions of
  sustainability to
• Help companies prioritize social responsibility
  (investment) using the framework to identify how
  their strengths can help achieve social goals
  within the specific needs of specific places. (a
  guide to help prioritize focal points in
  different geographies)
• Promote constructive dialogue between NGOs,
  companies, and government about working together
  to achieve social goals
• This Systems diagram was initially developed by
  mapping underlying theory behind the MDG strategy
  as articulated in the End of Poverty

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Why are the poor poor?
At its most basic level, the key to ending
extreme poverty is to enable the poorest of the
poor to get their feet on the ladder of
development. The development ladder hovers
overhead, and the poorest of the poor are stuck
beneath it. They lack the minimum amount of
capital necessary to get a foothold, and
therefore need a boost to the first rung --
Jeff Sachs
Key Assumption the poorest of the poor cannot
take advantage of market opportunities without
first getting help in achieving the first
rung Key assertion of book Increased
Development Assistance funding from richer
countries is needed to break into the first
rung. Respecting the .07 commitment of GDP
would actually meet this goal. And it is
affordable. Less funding is insufficient to
enable market development.
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How the poverty trap works..
economic growth
s
population growth and depreciation
agriculture revenue
R
s
s
o
s
s
household income
capital per person
household savings
s
o
s
household productivity
s
household consumption
public investments
s
o
tax payments
s
s
public budget
If a household is impoverished, all income goes
to household consumption, resulting in no taxes
and no household savings. The lack of household
savings and the lack of public investments
(roads, schools, power, etc) means that there
will be no increase in the total capital stock.
Due to population growth and depreciation, the
capital per person declines. Assuming that
capital drives production, as the capital per
person falls, economic growth declines, driving
down household income.
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There is a wealth point above which savings and
reinvestment can happen, below which you are
caught in the poverty trap..
mnc investment In local business
business revenue
transfer of knowledge
economic growth
s
s
population growth and depreciation
s
agriculture revenue
s
s
o
s
s
household income
capital per person
household savings
s
o
s
s
household productivity
s
s
household consumption
public investments
s
o
humanitarian relief
tax payments
s
s
microfinance
public budget
s
International Aid
But if investments through mechanisms like
microfinance, direct relief, and support to the
public budgets were sufficient to raise the
average capital stock so that growth in capital
exceeds population growth and deprecation, the
viscous cycle of poverty trap could be flipping
into a virtuous cycle of economic growth.
Knowledge transfer can also increase business and
ag revenues.
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But the challenge of tipping the vicious cycle is
exacerbated by
economic growth
soil erosion
cost of of inputs
s
population growth and depreciation
o
s
o
agriculture revenue
s
s
o
s
s
household income
capital per person
household savings
s
o
s
regulatory/legal framework
productivity
s
o
s
household consumption
s
public Investments (education, power, roads,
etc)
s
o
labor required for basic necessities
tax payments
s
s
o
public budget
health
s
o
s
wars
o
o
o
corruption
access to clean water
s
malaria, AIDS
International Aid
Household incomes are depressed from low
agriculture yield and high losses of productive
time because of lack of access to clean water and
poor health. In addition, corruption steals from
the public budget, the lack of a regulatory
framework reduces investment and economic growth,
and wars destroy public infrastructure such as
roads, power, education, and healthcare.
International Aid without a good regulatory
system can also lead to corruption.
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In addition, the societal dimensions group
believes that local business development and the
direct involvement of local stakeholders in all
public investment decision making are essential
to successful, sustained poverty alleviation.
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Layering in the MDG strategies
local economic development
ensure environmental sustainability (MDG 7)
o
s
promote gender equality (MDG 3)
economic growth
soil erosion
cost of of inputs
o
s
population growth and depreciation
o
s
o
o
o
agriculture revenue
s
s
o
s
s
household income
capital per person
household savings
s
s
o
s
productivity
regulatory/legal framework
o
s
o
s
extreme poverty and hunger (MDG 1)
household consumption
s
public investments (education, power, roads,
etc)
s
o
labor required for basic necessities
tax payments
s
s
s
s
public budget
health
o
o
s
s
s
reduce child mortality (MDG 4)
achieve universal primary education (MDG 2)
access to clean water
malaria, aids
improve maternal health (MDG 5)
o
The MDG goals should increase household income,
reducing extreme poverty and hunger as a result
of the intervention strategies
combat aids, malaria, etc (MDG 6)
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MDG8 Develop a global partnership for
development

• The process of working to achieve social goals is
  as important as the leverage points themselves.
  How do we work with more awareness?
• Engage local private sector
• Engage with local communities (how do you partner
  at the local level and with whom?)
• Work with national governments (they set the
  rules in reality)
• Facilitate constructive partnerships between
  local, private sector, multinational, etc.
• Change opportunity for those in the companies
  also. Design engagement carefully.

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Setting priorities How should we design our
business strategy to better integrate societal
needs?

• What are the strengths of company, both globally
  and locally?
• What are business needs (or opportunities) in
  this area?
• What are the needs of the area? Are there any of
  the MDG with higher needs than others in this
  geography?
• How we can design our business and/or make social
  investments to support business goals AND
  identified societal needs? To engage and inspire
  more of the organization?
• Returning to the MDG framing -- how do we believe
  that this investment will reduce poverty?
• What un-intended consequences could result?
• What indicators should we track to understand
  impact?

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Schlumberger Excellence in Educational
Development (SEED)

• What are the strengths in the company to draw
  upon?
• Company is a technology company, science resource
• Operating in over 100 countries, often in remote
  areas
• Great cultural diversity of people, integrated
  through management
• Very advanced IT structure and experience
• What intervention matches company strength to
  local needs?
• Improve science education through IT investment
  and access to scientists.
• Target schools where there is enough exiting
  infrastructure for IT to help.
• Infrastructure PC IT Connectivity grants to
  schools in developing countries
• Science website with content from volunteer
  scientists to inspire and educate students in
  science, teach critical thinking skills.
• Collaborative projects. Link schools together and
  work on projects to improve understanding and
  tolerance across cultures, and solve problems
• Seed Action Fund. 500 grant to school/students
  who complete water project where they can take
  action.
• Workshop for teachers and trainers. Train the
  trainer approach for diffusion

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SEED Story

• Key Process Design Elements
• Based on volunteer energy from science staff
  both content and places to help
• Motivating for employees, exposure to culture and
  education.
• Leverage existing infrastructure, integrated with
  companies skills
• Side benefit improves reputation with clients
  are impressed through this effort, creates access
  and business advantage.
• How does engagement in science education help
  reduce poverty?
• Internet allows access to global knowledge and
  culture, improving ability to learn more and
  participate in the modern world (bridging the
  digital divide)
• Creating more passion and capability for science
• Resulting in long term
• Better quality science education
• More local knowledge capital
• More options and better jobs, therefore more
  economic growth
• Sense of world as a global place more
  tolerance, more peace
• Broaden minds of students, teachers, and employees

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Schlumberger Excellence in Educational Development
local economic development
ensure environmental sustainability (MDG 7)
o
s
promote gender equality (MDG 3)
economic growth
soil erosion
cost of of inputs
o
s
population growth and depreciation
o
s
o
o
o
agriculture revenue
s
s
o
s
s
household income
capital per person
household savings
s
s
o
s
productivity
regulatory/legal framework
o
s
o
s
extreme poverty and hunger (MDG 1)
household consumption
s
public investments (quality of education)
s
o
labor required for basic necessities
tax payments
s
s
s
public budget
health
s
s
achieve universal primary education (MDG 2)
access to clean water
IT grants
access to science content and scientists
Action grants
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Unilever Project Shakti in Rural India

• What are the strength of the company?
• Food and Health products that can promote
  nutrition and hygiene
• Expertise in nutrition and hygiene
• Power of advertising and marketing campaign to
  reach people with information
• Value chains that can contribute to local
  economic development
• What business needs does the company have in
  rural India?
• Access and distribution
• What are the needs of the area in India
• High rural poverty
• High unemployment
• Sanitation and health problems
• Poor childhood nutrition

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Unilever Project Shakti in Rural India

• What intervention matches company strength to
  local needs?
• Support (through credit and training)
  underprivileged women in developing distribution
  business to bring products to underserved
  consumers.
• 2005 15,000 women bringing products to over 70
  millions rural households
• How will this program alleviate poverty?
• Local economic growth (jobs) to increase income
  (twice previous income)
• Increase capital to promote long term economic
  growth
• Knowledge capital through business skills
  development through value chain
• Financial capital micro credit through various
  partnerships
• Health
• Access to hygiene products
• Hygiene and nutrition education through marketing
  and advertising
• Improved Gender equality income for women means
  greater say in household
• Universal primary education income for women
  increase the chance of children going to school

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Project Shakti
Distribution business creation for women
Business skills training
Access to micro-credit
Mothers with income
Nutrition and hygiene education through marketing
Access to hygiene products