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Experts discuss how business can help address the world’s problems at the BDI’s inaugural event
Business leaders, NGO professionals and entrepreneurs met with leading academics to discuss new solutions to development problems at the inaugural Business for Development Summit at London Business School (LBS).
François Ortalo-Magné, Dean at LBS, recalled being taught “the easy and eloquent idea that the world could be so simple if companies could maximise their profits and worry about nothing else – but this assumed a benevolent government to manage market failures and public goods. How is this working out?”
The summit was hosted by the new Business for Development Institute (BDI) at LBS. “The School is uniquely positioned to offer guidance, advance the conversation and inspire and empower progress,” the Dean continued. “We care about truth and goodness, about how business impacts the world. It is the perfect time for this new platform.”
Lord Mark Malloch-Brown, Chairman, Business and Sustainable Development Commission, spoke about the business opportunity represented by the Sustainable Development Goals. “Building up the infrastructure for a growing world is beyond the scope of government. Business is absolutely central to the challenge.” He stressed that there were many strong arguments for finding business solutions to development problems. “The underlying economic proposition is a formidable one.”
Gail Klintworth, Business Transformation Director, Business and Sustainable Development Commission and Partner, SYSTEMIQ and a member of the Business for Development Institute advisory board, pulled no punches. “The system is broken,” she said, before puncturing the myth that companies are reluctant to move towards sustainability for fear of upsetting their shareholders. “That’s nonsense. It’s because they’re not brave enough to look for new opportunities.”
Rigorous, evidence-based research by Ioannis Ioannou, Associate Professor of Strategy and Entrepreneurship at LBS, demonstrates that sustainability is linked to high performance. Dr Ioannou, who urges firms to put purpose into practice, described the rise of the responsible corporation. “The top 1,000 companies in the world have in sales 80% of the GDP of the OECD. The potential for positive impact is huge.”
Vodafone’s Group COO and Strategy Officer Serpil Timuray called on companies to embed purpose into the centre of their operation. “If we think of our core business and how we can improve the lives of people, we can become the solution.” She gave the example of 350,000 women in Egypt who are learning to read and write through a mobile app. “It requires an ecosystem – we need to look beyond our own internal resources.”
Sir Andrew Likierman, Professor of Management Practice in Accounting and LBS’s former dean, interviewed Bill Winters, Group Chief Executive at Standard Chartered PLC, about making a business commitment to do good. “People want to come to work for a company that has a purpose and is contributing to society,” said Winters. “Business leaders need confidence-building around the market’s willingness to indulge in long-termism. There is tremendous pressure to deliver short-term results.”
Winters highlighted the value of academic insights such as those delivered by LBS faculty showing that a long-term view leads to long-term value. “The social returns are part and parcel of the value of the broader stakeholder returns,” he said.
Sustainability has become more palatable to the markets, said Sergei Guriev, Chief Economist, European Bank for Reconstruction and Development: “We already see that investors are happy to pay a premium. That is something that keeps me optimistic about business for development.”
Sam Parker, Director of the Shell Foundation, talked about how NGOs can piggyback onto large corporates to gain scale. He described two life-changing projects he had worked on – one involving improving sanitation in Dhaka, Bangladesh through affordable soaps, another delivering water to people in slums via new plastic piping. Each would have been “completely unachievable through traditional NGO channels alone. There was a business benefit and a huge social impact.”
Rory Stewart MP, the UK’s international development minister, said, “There is a straightforward connection between rapid economic growth and development and in the end that is going to come from the private sector – from businesses.”
Among questions from the audience, Julie Blane, a current student on the LBS Sloan Masters in Leadership and Strategy programme, asked what qualities leaders will need in the future. Stewart suggested, “You have to start with a degree of enormous humility. Can we admit our limits? How do we operate in a world that is so unbelievably complex?”
Timuray listed emotional intelligence, entrepreneurial skills and the ability to inspire and galvanise people behind a mission. “As leaders, we need to challenge and strive for our teams to come back with initiatives with both financial and social returns. It is harder work but it pays off.”
The BDI’s Executive Director, Raji Jagadeesan, said: “It has been so heartening to see so many new people and organisations connecting with London Business School today. There has been a sea change in the way companies and investors view their own ability to help solve the world’s social challenges and we are privileged to help lead the way.