UN SDG 1 is simple – No Poverty. It’s simple in words, but in deeds, of course, it’s immensely complex. Companies, for their part, should contribute to this end out of human decency, human rights. Yet, in doing so, they can improve their worth in society and, in some cases, improve the bottom line.
Companies are profit-seeking enterprises, as a matter of course. How they achieve that, however, can damage or benefit society. If you prescribe to conventional capitalism, your company can do a great deal to alleviate poverty.
No Poverty – this article addresses some things your company can do and how it will help you.
- What is SDG 1 “No Poverty” about?
- How does SDG 1 relate to business?
- SDG 1 for CSR/CSV, an example: Visa
- 5 ways to use SDG 1 to advance your company
- 1.1) Eradicate extreme poverty (living on less than ~US$2/day)
- 1.2) Reduce poverty by at least 50% (per national definitions)
- 1.3) Implement social protection systems
- 1.4) Equal rights to ownership, basic services, technology, and economic resources
- 1.5) Build resilience to environmental, economic, and social disasters
- SDG 1 – No Poverty: But read between the lines
What is SDG 1 “No Poverty” about?
SDG 1 aims to end poverty in all its forms, not just income, and is the widest ranging and inclusive of the SDGs. It also provides many opportunities for companies to protect their future profitability.
Globalization in terms of investment, technology, and supply chains has created a large middle class in the developing world. This has lifted an unprecedented number of people out of poverty (living on less than ~US$2 per day).
Although over a billion people have emerged from statistical poverty in recent decades, about a fifth of the world’s population remains poor – i.e., remains in poverty. COVID-19, the war in Ukraine, and rising inflation have recently reversed some of this progress. Poverty also makes people more vulnerable to climate change which increases environmental risk.
How does SDG 1 relate to business?
SDG 1 relates to business in four main ways:
Poverty means less purchasing power and smaller markets for goods and services, as well as a smaller pool of healthy, qualified, and productive people available for employment. This limits a company’s potential to grow, diversify by developing new products or services, and achieve scale economies.
It also raises the risk of economic and political instability, especially for operating a business in a developing country, but also for supply chains and markets for companies in developed countries. Failing societies are generally bad for business.
This can threaten a company’s long-term survival or profitability and also its ability to raise capital for investment.
A new generation and growing number of investors today demand that companies operate sustainably and are purpose-driven. If they don’t do so, they risk their reputations and limit their access to capital.
SDG 1 for CSR/CSV, an example: Visa
Financial services multinational Visa operates in 200 countries and territories. The company saw an opportunity to help the SDG 1 goal of “no poverty” by helping bridge the so-called digital divide. Per this divide, there’s a broad gap between those with access to modern information technology and those without. Among those without are the 1.7 billion people outside of the formal financial system.
The company’s environmental, social, and governance (ESG) report specifically mentions and addresses SDG 1 by promoting “digital equity,” committing to:
- Give 500 million unbanked people the ability to make payments with Visa-branded accounts (this was achieved in 2019)
- Enable 50 million small-sized and micro-businesses to make and receive digital payments by the end of 2023
- Pay their employees a competitive, fair, and living wage
While the last one should go without saying, it still warrants mention in annual reports and ESG-type reports, as so many companies, in fact, do not pay competitive wages.
5 ways to use SDG 1 to advance your company
While all the SDGs have overlapping aspects, SDG 1 may have the widest scope of the 17 SDGs since poverty encompasses so many dimensions.
Its five sub-goals provide businesses with five ways to become better at achieving their growth potential and retaining their license to operate. They also can help with raising capital by addressing the needs of all stakeholders, including government, employees, and shareholders.
Businesses can follow the targets of SDG 1, using them as a guide to their actions.
They can refocus their CSR programs, investments, operations, and supply chains based on the sub-targets.
1.1) Eradicate extreme poverty (living on less than ~US$2/day)
Businesses can address these targets in numerous ways. A simple way starts with human capital already present in the company – raise wages so they’re in line with modern living standards. Visa, as mentioned above, claims it has committed to paying employees a fair and sustainable wage.
1.2) Reduce poverty by at least 50% (per national definitions)
A company can change its procurement and supply chain to include local suppliers, especially in agriculture which usually is a low-wage and low-skill sector. This creates jobs and higher incomes, and it reduces poverty.
Danone specifically sets out 1.2 as one of the sub-targets it is working on. Among its efforts are its alignment with the Grameen Bank in Bangladesh, and its Livelihood funds addressing rural poverty.
1.3) Implement social protection systems
In addition, a company can offer benefits to its employees, such as health insurance, thereby widening the social safety net. This also helps make people more resilient to economic and social disasters.
1.4) Equal rights to ownership, basic services, technology, and economic resources
A company can identify and supply poor areas with basic services, such as electricity.
For example, there are currently around 600 million people without access to power. Iberodrol, the world’s top producer of wind power and one of the largest electric utilities, signed a 1.5-billion-euro loan to provide free electricity to 16 million households in developing countries by 2030. It calls this its “Electricity for All” Program.
They literally have the power, and they are aiming to distribute it equitably. Well done. But hold them to account for it.
1.5) Build resilience to environmental, economic, and social disasters
A company can develop new products that make them less reliant on scarce resources such as water. For example, Unilever developed a new washing powder that needs less water. This means women in the developing world spend less time collecting water and more time studying, finding a job, working, or on childcare.
While the company appears to have helped poverty alleviation in general, its Sustainable Living Brands are growing 69% faster than the rest of the business and delivering 75% of the company’s growth.
SDG 1 – No Poverty: But read between the lines
Many companies will promote their virtuous acts. Some are indeed virtuous. Others are comically minor compared with corporate profits, dividends, and obscene salaries for top executives. Always keep the greenwashing notion in mind.
Most of all, in your company, do not harm. Do good. Use the SDGs as a guide and be honest about if you’re truly delivering sustainable value.
If you are, Scize is here to work with you. We will communicate your ideas, no matter how complex, in clear and honest English the world can understand. We’ll localize your content and glocalize your content. We’ll get you seen. Find out what we can do for you.