How business leadership can advance Goal 9 on Industry, Innovation and Infrastructure
Industry, infrastructure and innovation are key drivers of economicgrowth and social value creation. Sustainable industrialization can liftcommunities out of poverty but needs to be managed carefully to avoidadditional pressures on people and planet. In developing countries alonethis requires a $1 trillion gap in annual investment spending needs to beaddressed. Industrialization and, more broadly, economic developmentcrucially depends on quality, reliable infrastructure. Without it,communities and businesses remain deprived of access to markets, qualityproducts and services, and jobs. Globally, 2.6 billion people cannot accessa reliable electricity source and over 4 billion do not have internet access.As these gaps are filled, industry and infrastructure assets must be resilientto changes in social, economic, and environmental conditions. To achieveinclusive and sustainable industrialization and deliver quality, resilientinfrastructure, technological and process innovations must be developed anddeployed at scale.
As producers, employers, investors, and innovators, businesses are fundamentalto achieving Goal 9. Business delivers through its research, developmentand deployment of technologies and processes, and its financing andproduction of capital assets and infrastructure. But business is alsoinstrumental in creating an enabling environment for innovation andinvestment through its engagement with other stakeholders such as Governmentson innovation, policy, and accessibility to their intellectual propertyand other assets. Business, of course, has an obligation to comply withrelevant laws designed to protect people and the environment. However,responsible business practice moves beyond strict legal compliance towardsupporting internationally recognized standards of conduct.
Leading companies contribute to Goal 9 with actions that impact boththeir own practices and those of others. Internally, they fosterintrapreneurship and ethical leadership to create a corporate culturethat supports innovation and business activities with inclusion andsustainability at their heart. Companies can lead through research,development and deployment of products, services, and business models todeliver sustainable and resilient infrastructure; particularly thosetailored for challenging conditions in developing countries where the needis greatest. They can support inclusive and sustainable upgrading ofindustries in developing countries through global value chains, byfocusing on transferring technologies and skills to build localcapabilities. Leading companies can create innovation systems forsustainable development by providing access to finance, fosteringentrepreneurship, and pooling financial and research resources in aglobal knowledge base. They can also lead in upgrading and retrofittingof infrastructure and industry assets across own and supply chainoperations to make them sustainable and resilient.
Leadership on Goal 9 represents a significant market opportunity forbusinesses. Retrofits and installation of new infrastructure is a marketworth $3.7 trillion annually. Delivering this infrastructure can allowbusinesses to access new markets for their products and services, as wellas access to underserved labour markets and resources, while respectinginternational standards for environment and social impacts. The transitionto a green, resilient industrial and infrastructure base globally representsa significant investment opportunity with large rewards for businesses thatcan position themselves at the leading edge of the sectors that mustdeliver it.
Action on Goal 9 is strongly interconnected with many other SDGs, mostnotably Goal 11 on sustainable cities and communities, and Goal 12 onresponsible consumption and production. Efforts to create new opportunitiesfor innovation and employment in developing countries directly relate toGoal 8. Infrastructure-dependent SDGs including those relating to food(Goal 2), water and sanitation (Goal 6), energy (Goal 7), and climateaction (Goal 13) will also benefit from action on Goal 9. Leading actionmust be managed such that it does not risk exacerbating existing inequalities,or creating new ones, and so that it is not contributing to any form ofcorruption and violation of human rights that would negatively impact ona range of SDGs.
Do your actions satisfy the Leadership Qualities?
Guiding Questions to apply to the Leadership Qualities to your business
Intentionality
Ambition
Consistency
Collaboration
Accountability
- Is your company committed to supporting the achievement of Goal 9? Haveyou developed a holistic strategy that reflects this commitment, coveringend-to-end operation and the wider community?
- Are you committed to learn from your actions and do you have processesin place to improve them accordingly?
- Is your strategy supported by the highest levels of management, includingthe Board of Directors?
Key Considerations
Leading on Goal 9 requires activities to be carried out over the long-term,necessitating continuous, strong backing and clear explanation of benefitsto all stakeholders of the company. This requires a top-level strategiccommitment.
- Do your actions achieve long-term outcomes that greatly exceed thoseresulting from current industry practice?
- Are your actions aligned with what is needed to achieve Goal 9?
Key Considerations
Ambitious action on industry, infrastructure, and innovation focuses onthe areas of greatest need where the company’s capabilities most stronglycomplement the capabilities of other actors. Actions have the potentialto achieve impact at scale through inspiring others to replicate it.
- Is support for Goal 9 embedded across all organizational functions?
- Are staff and board incentives aligned with achieving Goal 9?
Key Considerations
A full commitment to Goal 9 means that the company consistently maximizessustainability of all its assets and throughout all its innovation activities.It is important that all staff are appropriately incentivized for doingso, as cutting on sustainability can be an attractive way to control budgets.
- Do you proactively look for opportunities to partner with Governments,UN agencies, suppliers, civil society organizations, industry peers andother stakeholders to inform how to advance Goal 9?
Key Considerations
Large investment projects always need to be delivered in close consultationwith all affected stakeholders, due to their complex nature, high levelsof impact, and long lifespans. Care must be taken to align projects withnational development plans, especially in least developed country contexts.
- Do you publicly express your commitment to advance Goal 9?
- Do you identify, monitor, and report on impacts, including potentially adverse impacts?
- Do you mitigate risks associated with your action?
- Do you remediate negative impacts associated with this action?
- Do you engage stakeholders in a meaningful way?
Key Considerations
Making commitments public, and monitoring and reporting on progress, iskey in the context of Goal 9 given the significant development impact oflarge projects. Any risks of negative impacts on people and planetassociated with actions should be managed carefully, and safeguardsshould be in place.
Business Actions
BUSINESS ACTION 1
Support the development of sustainable infrastructure
BUSINESS ACTION 2
Support inclusive industries globally
BUSINESS ACTION 3
Create innovation systems for sustainable development
BUSINESS ACTION 4
Upgrade and retrofit infrustructure
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BUSINESS ACTION 1
Research, develop, and deploy products, services and business modelsto deliver sustainable and resilient infrastructure
Governments and businesses spend $3 trillion per annum oninfrastructure projects, collaborating through public-privatepartnerships. Businesses supply the majority of the technology andskills underpinning the construction and operation of these assets.These activities should comply with all the relevant standards andrequirements of the country. Leading companies can, on their own orpreferably in partnership with Governments and other stakeholders,engage in the research, development, and deployment of new products,services and business models that can deliver on the world’s long-terminfrastructure challenges. This can include applying innovative methodsto maximize the share of urban residents with access to project benefitsand essential services, and innovating for more sustainable, resilientinfrastructure technologies.
Example Practices
- A technology company launches a targeted offering for municipalitiesdesigned to implement solutions for sustainable urban servicesinfrastructure (e.g. photovoltaic road, in situ infrastructure development)
- An investment bank launches a green bond to finance sustainableinfrastructure in a developing country and partners with government toselect projects based on criteria that include climate resilient designand inclusive service delivery
Consider the leadership qualities and interconnectedness of your action, including…
- Ambition: ambitious infrastructure solutions can deliver better services at lowercost to recipients than conventional solutions. They are sustainable,resilient, and tailored to local needs relating to patterns of use andenvironmental conditions.
- Accountability: infrastructure projects have a large impact on local communities. Thedevelopment of infrastructure solutions should allow for carefulmanagement and minimization of risks of negative impacts associatedwith construction, operation, and eventual disposal.
- Interconnectedness: many SDGs rely on infrastructure investments, including Goal 6(water and sanitation), Goal 7 (clean and affordable energy) andGoal 11 (sustainable cities and communities).
BUSINESS ACTION 2
Support inclusive and sustainable upgrading of developing countryindustries in global value chains
Most national development plans in developing countries call for anincrease in the share of employment in industry. All businesses withindustrial operations and/or strategic industrial suppliers indeveloping countries must have policies in place to ensure that theseactivities are inclusive and sustainable. But an essential element ofdeveloping countries’ upgrading in the global value chain is the transferof technology and skills. To facilitate this, leading companies can establish,invest, or partner with operations with higher added value productionprocesses in developing countries and support skills transfer and developlocal labour markets through inclusive training and apprenticeship programs.They can partner with peers, government, and other stakeholders to helpdesign complementary policies and education programmes, and to ensurethat they build on existing capabilities and align with nationaldevelopment plans. This maximizes the chances of successful technologyand skills transfer.
Example Practices
- A food manufacturing company develops nutrient-fortified grains todeliver nutrients and vitamins to malnourished populations, with productionfacilities in developing countries and workers including smallholderfarmers, over half of whom are women
- A fashion retailer builds sustainable garment manufacturing sites inremote areas of a developing country, providing women in ruralcommunities with access to decent work
- A minerals company advocates for a sustainable special economic zonefocused on mineral processing in a developing country to develop highervalue exports from the country’s natural resources and commits toinvesting in shared infrastructure to attract other high value companiesto the country
Consider the leadership qualities and interconnectedness of your action, including…
- Collaboration: developing an industrial base in a developing country requires fullcollaboration with relevant stakeholders to ensure that the industryis compatible with local capabilities and development plans.
- Accountability: companies operating in developing countries should manage risks ofnegative impacts on vulnerable populations and the environment, andnot move operations to avoid more stringent regulation in the homecountry. They should have appropriate safeguards in place, includingstrong anti-bribery and corruption policies. They should carefullymonitor and report on their progress to make themselves publiclyaccountable.
- Interconnectedness: sustainable and inclusive industrial development is particularlystrongly connected to Goal 8 (decent work) and sustainable productionand consumption (Goal 12). But supporting industrialization can havenegative impacts on the environment (Goals 13, 14 and 15) if it is notsustainable, and may reinforce existing inequalities (Goals 5 and 10)if it is not inclusive.
BUSINESS ACTION 3
Create innovation systems for sustainable development by providing accessto finance, fostering entrepreneurship, and pooling financial and researchresources in a global knowledge base
Inclusive, sustainable industrialization and infrastructure require farmore conducive and productive local and global innovation systems. Thesesystems can only emerge with the full support of the private sector andits unique innovation capabilities. Companies can play an active role inshaping these systems by supporting Governments at the national level butactivity at the global level is also crucial, as the scale of the challengeof achieving Goal 9 calls for fruitful global innovation systems. Companiescan support innovation systems for sustainable development by fosteringentrepreneurship within the company itself and by financing externalinnovative enterprises through venture capital and incubators. Leadershipin international innovation systems can consist of extraordinary contributionsto global pools of research infrastructure. It can also consist ofsignificant contributions to the global knowledge base through educationand research funding. Leading companies take measures to ensure that theinnovation systems that they support, and the findings that come from them,are open and accessible. They can also proactively engage peers, supplychain members, and Governments. Where possible, they engage representativesof vulnerable people and natural assets to understand areas of need thatcan be addressed with innovative solutions.
Example Practices
- A consumer goods company awards venture capital to SMEs looking to scaletechnology solutions that provide access to clean water in developingcountries
- A coffee retailer shares ten years of proprietary agronomy research tofarmers in developing countries to support climate-smart practices invulnerable areas and raise farm incomes through sustainable coffee farming
- A cement company sets up a horizon scanning team to identify futurebusiness models that are in line with climate and sustainability policies
- A global science-based company active in health, nutrition and materialleads a consortium running an innovation campus, which providesstate-of-the-art facilities for innovative businesses in the field ofsustainable and smart materials and chemical processes
Consider the leadership qualities and interconnectedness of your action, including…
- Collaboration: businesses will need to partner with a range of institutions to createinnovation systems, including those in higher education, civil societyand industry peer groups.
- Accountability: innovation and technological advancements can reinforce existinginequalities. Companies should meaningfully engage vulnerable groupsto understand areas of need, and minimize risks of negative impactsthat their initiatives and solutions may have.
- Interconnectedness: innovation for sustainable and inclusive industry and infrastructurecan contribute to the entire 2030 Agenda, and to decent work (Goal 8)and sustainable production (Goal 12) in particular.
BUSINESS ACTION 4
Upgrade and retrofit infrastructure and industry assets across own andsupply chain operations to make them sustainable and resilient
Business plays a central role in planning, designing, financing, building,and operating infrastructure and industrial assets. Yet large parts ofthe world’s existing infrastructure and industrial asset base are notfully functional, not designed to withstand increasing weather variabilityand environmental hazards, nor accommodate changing economic realitiesassociated with long-term sustainable development. In developing countries,there is a critical lack of sustainable, resilient infrastructure andindustry assets to enable long-term sustainable development. All businessesare expected to manage risks of negative environmental and social impactsover the lifetime of their assets. But leadership requires asset ownersand operators to factor into their investment planning different futurestates of the world that factor in population growth, technology anddemand shifts, changing weather patterns, natural hazards, and conflict.Leading companies should also retrofit assets to make them sustainable,with increased resource-use efficiency and ensure greater adoption ofclean and environmentally sound technologies and industrial processes.Leading companies focus these efforts on own and supply chain operations,partnering with supply chain members to build capacity and provideresources to do so.
Example Practices
- A transport company use sensors in infrastructure to develop analyticsfor whole life infrastructure efficiency and shares learnings withrelevant stakeholders in developing markets
- A hydroelectric dam developer conducts a lifecycle impact analysis forprojects to consider impacts across a range of development pathways andoutcomes over the life of installed assets
- A port in Europe works with a multilateral development bank to securefinance and technical capacity to raise its quay wall in order toimprove resilience to rising sea levels
Consider the leadership qualities and interconnectedness of your action, including…
- Ambition: investment in, and retrofitting of, resilient assets requires ownersto deploy full lifecycle and climate resilience analysis. Ambitiousaction delivers resilience in areas with the greatest need.
- Collaboration: collaboration with government on policies for enhanced resilience andaffected communities is key to achieve systemic change.
- Accountability: large infrastructure and industrial investment projects have asignificant impact on local communities. The development of allassets should allow for careful management and minimization of risksof negative impacts associated with construction, operation, andeventual disposal.
- Interconnectedness: increasing asset resilience can help local communities adapt to theimpacts of climate change (Goal 13) and water stress (Goal 6), andincrease food security (Goal 2).
How taking action on Goal 9 is interconnected with other Goals
The Global Goals are inherently interconnected. Action taken toward one Goal can support or hinder the achievement of others. Identifying and addressing these interconnections will help business to build holistic and systemic solutions that amplify progress and minimize negative impacts. To help build a greater understanding, we have illustrated some of the ways in which the Goals connect. These are not exhaustive, and we encourage business to consider how they apply in their own operations.
Maximise likelihood of positive impact on:
Goal 02 Goal 06 Goal 07 Goal 11 Goal 12 Goal 13
Sustainable infrastructure is core to the development of sustainable cities(Goal 11), and these goals can be pursued in tandem. Developing moresustainable industrial processes and products through R & D investmentswill further enhance efforts to improve sustainability in the productionof goods and services (Goal 12). Sustainable infrastructure can supportmore productive agricultural practices (Goal 2), greater access to WASH(Goal 6), and clean energy (Goal 7). Resilient infrastructure invulnerable communities also increases adaptive capacity to climate change(Goal 13).
Minimise risk of negative impact on:
Goal 05 Goal 10 Goal 13 Goal 14 Goal 15 Goal 16
Infrastructure investment and industrial development involve largefinancial flows, which can involve risks of illicit business conduct,including corruption and bribery, in all markets. Relatedly, there is arisk of increased inequalities if the economic benefits flow only to asmall group, particularly in cases where there may be correspondingnegative impacts on livelihoods of other communities (Goal 10). This inturn could lead to injustice and an erosion of institutions (Goal 16).Displacement of communities for large infrastructure projects tends todisproportionately affect women and children (Goal 5) and vulnerablecommunities. If projects do not adhere to stringent environmentalperformance standards they may cause serious harm to life on land(Goal 15), life below water (Goal 14), and the climate (Goal 13).
Goal 9 Targets
Targets of Goal 9
- Develop quality, reliable, sustainable and resilient infrastructure
- Promote inclusive and sustainable industrialization
- Increase access of SMEs to financial services and markets
- Upgrade and retrofit existing infrastructure to make industries sustainable
- Enhance scientific research, upgrade the technological capabilities ofindustrial sectors in all countries
References
- SDG Compass
- UN Global Compact Industry Matrix
- Global Opportunity Explorer
- Navigating the SDGs: a business guide to engaging with the UN Global Goals
- SDG Reporting - An Analysis of the Goals and Targets
- Sustainable Development Knowledge Platform, Goal 9
- UNIDO Industrial Development Report 2016
- Growth and Jobs by Investing in Sustainable Special Economic Zones
- Breakthrough Innovation Platform
Goal 08
Goal 10
