Australian SDGs Hub for Business

                                

In 2015, the World Bank estimated there were 700 million people living below the international poverty line (less than $1.90 per day) – that is, people unable to access the basic necessities for a healthy life. While down from an estimated 900 million in 2012, poverty remains a critical issue. As the World Bank noted, many of those still in poverty are “deeply poor,” with incomes far below the line.1

This is not just an issue for developing countries, although poverty is defined differently in wealthy countries.

In Australia, the Australian Council of Social Service has estimated that nearly 3 million people (13.3% of the population) are living below the poverty line (defined in as less than 50% of median income).2 The decade to 2014 also saw a 2 percentage point increase in the number of children living in poverty to 731,300 (or 17.4%).2 Indigenous people and people with disabilities also suffer disproportionately high rates of deprivation.3

Housing affordability is an acknowledged problem in Australia, with people increasingly carrying larger mortgage debts into retirement or still needing to rent.4

 

How is this relevant to business?

Poverty is a moral and ethical issue, and business should contribute to because tackling it because it’s the right thing to do.

It also makes business sense. To flourish, business needs peaceful, stable operating environments; an educated, healthy, productive workforce; and demand for goods and services – all of which are undermined by poverty.

 

What can business do?

Business can contribute to poverty in a number of ways (e.g. if there is a gender pay gap in their workforce, or if workers in supply chains are not being paid appropriately; or if a business’ activities impact on people’s ability to earn an income, such as through resettlement or the social impacts of environmental practices).

Business also has a significant opportunity to address poverty – and to do so in ways that are mutually beneficial.

At a minimum, business is expected to act responsibly by mitigating any negative impacts that contribute to poverty. Business is also encouraged to find opportunities for positive impact. A few examples follow.

 

Act Responsibly

  • Identify any ways that the business might be contributing to poverty and think broadly in doing so (e.g. impacts on communities near project sites; social implications of environmental practices; product development, pricing and marketing)
  • Respect human rights (see our Human Rights page for more information)
  • Pay workers fairly and take steps to ensure workers in your supply chains are paid fairly (this includes addressing the gender pay gap)
  • Pay tax fairly
  • Pay invoices on time (this is particularly important if your suppliers are SMEs)

Find Opportunity

  • Create inclusive business models
  • Enhance access to goods and services (e.g. financial inclusion, provision of basic services) and technologies that can contribute to development
  • Include diverse suppliers in your supply chain (e.g. Indigenous-owned businesses, women-owned businesses, SMEs)
  • Build new markets to encourage economic growth through open trade, supported by governments
  • Enhance stability and good governance through economic relations (e.g. adopt stringent anti-corruption measures, engage with initiatives such as Business for Peace and Business for the Rule of Law)
  • Partner with governments, NGOs and others to align activities and investments with development priorities (e.g. engage with DFAT)
  • Engage in advocacy (e.g. in relation to issues of good governance, aid, social policies)

 

Links between Goal 1 and the UN Global Compact’s Ten Principles

Human Rights & Labour (UN Global Compact Principles 1, 2, 3, 4, 5, 6)

Poverty is a critical human rights issue, and human rights infringements can be both a cause and consequence of poverty.

“Poverty is not only deprivation of economic or material resources but a violation of human dignity too. Indeed, no social phenomenon is as comprehensive in its assault on human rights as poverty. Poverty erodes or nullifies economic and social rights such as the right to health, adequate housing, food and safe water, and the right to education. The same is true of civil and political rights, such as the right to a fair trial, political participation and security of the person.” (Office of the High Commissioner for Human Rights)

Environment (UN Global Compact Principles 7, 8, 9)

The environmental impacts of business activities can contribute to poverty in a range of ways – for example, environmental damage can impact on community members’ livelihoods (e.g. fishing, farming); climate change impacts are forcing migration. Further, as resource scarcity intensifies, the cost of access to food, water and energy increases, contributing to poverty.

Anti-Corruption (UN Global Compact Principle 10)

Corruption is a key obstacle to sustainable development, with a distorting and damaging effect on economic growth. The connection between corruption and poverty is two-way: corruption exacerbates poverty, and poverty tempts corruption.

 


1 World Bank Group, Global Monitoring Report 2015/2016: Development Goals in an Era of Demographic Change (2016)
2 Australian Council of Social Service, http://www.acoss.org.au/wp-content/uploads/2016/10/Poverty-in-Australia-2016.pdf (2016)
3 Melbourne Institute of Applied Economic and Social Research (2016), http://melbourneinstitute.unimelb.edu.au/__data/assets/pdf_file/0007/2155507/hilda-statreport-2016.pdf
4 Treasurer Scott Morrison, 2017, http://sjm.ministers.treasury.gov.au/speech/005-2017/

GOAL TARGETS

1.1
By 2030, eradicate extreme poverty for all people everywhere, currently measured as people living on less than $1.25 a day

1.2
By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions

1.3
Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable

1.4
By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology and financial services, including microfinance

1.5
By 2030, build the resilience of the poor and those in vulnerable situations and reduce their exposure and vulnerability to climate-related extreme events and other economic, social and environmental shocks and disaster

1.a
Ensure significant mobilization of resources from a variety of sources, including through enhanced development cooperation, in order to provide adequate and predictable means for developing countries, in particular least developed countries, to implement programmes and policies to end poverty in all its dimensions

1.b
Create sound policy frameworks at the national, regional and international levels, based on pro-poor and gender-sensitive development strategies, to support accelerated investment in poverty eradication actions

1.c
Adopt measures to ensure the proper functioning of food commodity markets and their derivatives and facilitate timely access to market information, including on food reserves, in order to help limit extreme food price volatility

CASE STUDY

Intrepid Travel is helping women in Myanmar to access small loans for investment in existing and new businesses.

FURTHER RESOURCES

Poverty Footprint (UN Global Compact, Oxfam) assessment tool enables business and civil society partners to understand impacts on poverty all along a company’s value chain. It can help business establish pro-poor business strategies, and promotes greater corporate transparency and meaningful stakeholder engagement.


Measuring Impact Framework Methodology (WBCSD) helps businesses understand their contribution to development and then use this understanding to inform operational and long-term investment decisions.


Implementing Inclusive Business Models: How Businesses Can Work with Low-Income Communities (A Primer) (UN Global Compact, BCtA) explains in brief what inclusive business models are and how companies can address common external and internal constraints to their implementation.


Poverty Assessment Tools (USAID, PATs) website contains free, easy-to-use tools for assessing poverty levels of any group of people. Each PAT survey consists of 10-25 questions and results can be analysed using USAID’s custom data entry templates or a company’s own analysis software.


For more goal-related tools, go to the Inventory of Business Tools webpage on the SDG Compass website. Businesses can explore and find commonly used tools when assessing their impact on the SDGs.