Pathways to a sustainable and inclusive global economy
Let’s face the facts. There is a vast gap between where our economic system is today and where it needs to be. The incremental progress we are making is not sufficient to stay within the boundaries of a planet with finite resources. We are not doing enough to secure a safe and prosperous future for humankind. Change takes time, but science tells us time is not on our side. We need radical transformative change.
Realising a sustainable economy will not be a smooth ride for society. It
requires ‘creative destruction’ to change direction, dismantle cultures and structures
that uphold unsustainable behaviour and create new practices, technologies
and resource systems
Opportunity and innovation lie at the core of this transition.We are at a pivotal moment in time where we have the knowledge to consciously create new
ways of living. As the environmental economist Pavan Sukhdev says, “change
will happen in any case, either by default, design or disaster”. It is in our power
to decide how this change will occur. We have the resources, the technology and
solutions – if we make the right choices, and if we make them now.
AN AMBITIOUS VISION OF CHANGE
The vision of the Global Compact is audacious: to work toward a sustainable
and inclusive global economy. By offering a set of shared values, convening key
actors, establishing best practice and scaling up solutions to create impact, the
Global Compact is in a unique position to drive the necessary change.
As described in Part II of this report, the past 15 years have kick-started the process
of mainstreaming the ten principles into corporate practices and catalysing
action in support of broader UN goals:
- Corporate practices: More companies across the globe are realising and
reacting upon the impact that they have on society and the environment.
However, much of this work is incremental and the scale and pace of change
is not enough. A step change in ambition and outcomes is needed.
- Corporate operating environment: Whilst the operating environment is
becoming more conducive to change, many barriers remain. We need to
proactively deconstruct these barriers and incentivise drivers of change.
- Dominating worldviews: A significant shift in our understanding of the role
of business and the economy has occurred in the past 15 years, and sustainability is higher on the business agenda than ever before. But it has yet to be mainstreamed and translated into action.
The Global Compact has had a profound, and probably underrated, impact in many areas by bringing humanity together and pointing us in the right direction.
However, given the current and projected challenges of the world, there is
a need to revitalize efforts to deliver a real and lasting impact.
Part III is divided into two sections. First, we present 15 trends that will
influence the global business landscape in the next 15 years. Subsequently, we
propose three possible pathways of change to realise the vision of a sustainable
and inclusive economy, which the Global Compact should strive to support
through learning, dialogue and partnerships.
BUSINESS AS USUAL DISTRACTS
FROM THE VISION
– Between 3–6 ºC temperature rise by 2100 causing storms, heat
waves, extreme precipitation
– 65% of mega-cities - home to 10% of world population - at risk of
sea level rise
– USD 70–100 billion a year will be the cost of adapting to a 2 ºC
ECOSYSTEMS UNDER STRAIN
– Biodiversity loss threatens 5 out of 10 million species will be extinct
by end of century
– 60% of ecosystems will be under strain
– Global waste generated will be 13.2 billion tonnes per year
– 1.5 billion people will be negatively affected by degraded land
– 6 million people die every year from air pollution
– Water scarcity threatens 52% of global population
– 1 billion people may be displaced due to environmental factors by 2080
– 5-20% of global GDP is the long term cost associated with climate
change per year
– Cost of externalities are USD 28.6 trillion, 18% of global GDP
– 40 % gap between water supply and demand has the potential
to put 45 %, or USD 63 trillion, of global GDP at risk by 2050 – the
approximate size of today’s global economy