The Global Sustainable Development Facility

The Global Sustainable Development Facility project is an initiative that brings together leading global corporations and the UNDP, to jointly define and implement a new facility to eradicate poverty, create sustainable economic growth and allow the private sector to prosper through the inclusion of two billion new people in the global market economy. The first of its kind, this new initiative will bring together UNDP's universality, its 40 years of development experience and its network of offices in developing countries with the knowledge and resources of the private sector.

The 2B2M / 2020 Vision - Cooperation to increase prosperity.

2B2M / 2020 - two billion more people into the market economy by the year 2020 - is a new way of looking at global human development. Behind the vision lies a firm belief that human development for the next millennium must rest on the successful fusion of the market-based economic system with environmental sustainability and a civic society based on peace, democracy, health, tolerant values and social stability.

There is a need for new cross-sector and cross-boundary approaches to meet the vision. In recent years, the United Nations, under the leadership of Secretary-General Kofi Annan, has made a clear commitment to exploring such approaches with the private sector. The Global Sustainable Development Facility will form a key part of this process - offering leading corporations the opportunity not only to engage in a constructive dialogue, but also to undertake practical action in partnership with the UNDP.

The rationale for a strategic engagement between the business community and the development community is that, in the long
term, a strong relationship exists between sustainable human development and the growth of shareholder value. A public-private partnership of this nature offers a great hope for eradicating
poverty by explicitly focusing on approaches that combine private returns with public purpose.

From a business perspective, the vision of eradicating global poverty means nothing less than enabling two billion poor people to move from consumption only, or even non-consumption to become active participants in the cycle of savings, investment, production and consumption. Corporate success will be increasingly dependent on harnessing these new markets and production opportunities.

The active role of the business community in South Africa in ensuring peaceful and non-violent transition of power can serve as a reference point and model for what can be achieved, at the global level, by engaging corporations in transformation processes.

Implementing the 2B2M Vision - The Global Sustainable Development Facility

The objective of this project is to jointly develop and define a new vehicle, tentatively called the Global Sustainable Development Facility (GSDF), to implement the 2B2M / 2020 vision.

The vision, strategies, objectives and constitution of the GSDF will be developed through an iterative, consultative, process between the participating corporations and the UNDP, which is playing the role of a catalyst in this process. The UNDP has put forward the following broad principles, for consideration by the corporate participants:

• The GSDF will be established as a separate legal entity, outside the UN system;
• It will be primarily governed by the participating corporations and will benefit from the advice and support of the UNDP through a special relationship;
• The GSDF will mainly be capitalized through contributions from the participating corporations;
• It will be operated on sound business principles, and will provide both soft and hard capital, including financial, managerial and technical resources;
• The projects undertaken by the GSDF will promote the 2B2M / 2020 vision. While the type of activities and projects will be determined by the participants in the GSDF process, the following examples are being put forward for illustrative purposes only:

1. Create project streams. Act as a bridge and create a stream of projects, by using the network of UNDP country offices. These projects, once defined, would be implemented by the private sector. Complementary projects, such as rural telephony and electrification, in which this facility, with its UN ties, could play a development and brokering role, provide a good illustration.
2. Linkages for developing country businesses.Supporting
   projects and linkages between businesses in developing countries that will lead to inclusion into the global economic cycle.
3. Developing products and services adapted to "emerging markets" of the poor.The GSDF could play the role of a catalyst in promoting the creation of a number of products and services suited for local geographical and social conditions in poor countries.
4. Access to technology.Supporting the vital access to the technologies and skills that are needed for sustainable economic development. The GSDF could play a pioneering role in an area that over the years has been widely debated but has seen very little in terms of implementation.
5. Microfinance.This concept has been successful in promoting economic growth by reaching the poorest, especially women, with credit, savings and insurance instruments. The development of new instruments of micro-finance, increased efficiency, and the application of world financial standards, are necessary requirements to connect the microfinance industry with the global financial markets. It represents a good example of potential GSDF activities.

Benefits of Cooperation

The UNDP is the largest operating part of the United Nations system with offices in 135 countries and programme operations in 174 countries. It has 40 years experience of field work in developing countries, a global framework of great diversity, with governmental and institutional contacts at the highest levels due to its record as a trusted partner for both developing and donor countries.

• Through cooperation with the UNDP in this initiative, corporations will gain valuable insight into local conditions, key priorities and issues in developing countries, which will help them shape corporate strategies and products for these emerging markets and reduce the risk of future business ventures.
• The GSDF must be seen as a long-term investment in market development. By participating in the definition phase of the GSDF, corporations will have a substantial input in shaping a new and unique vehicle for market development activities from which they will benefit.
• Through the campaign to launch the new facility, including publications, corporate participants will gain world-wide recognition for their cooperation with the UN/UNDP.
• The possibility of creating a specially designed logo for the GSDF initiative, highlighting its special relationship with the UNDP is currently being examined.

The GSDF Project Process

The GSDF process includes two phases, the definition phase, and the operational phase.

I. Definition Phase. This phase will last 10 to 12 months and lead to the definition and creation of the Global Sustainable Development Facility. The process will require participation of senior corporate representatives through an integrated process that has three components:

1. Interviews with corporations;
2. Scenario planning process;
3. Pilot projects;
4. Definition of institutional framework.

The purpose of these activities is:

• To Understand the views, interests, capacities etc. of participating corporations;
• To agree on and set the overall strategic direction and agenda of the GSDF;
• To start an inventory of specific products, services and projects for the GSDF;
• To agree on the institutional structure of the new facility.

The interviews are in-depth discussions with senior corporate representatives to understand their visions, priorities and ideas about emerging markets global challenges and the global economy, and to discuss how the corporation can contribute to implementation of the 2B2M - vision. The interviews will be an important source for the thinking that will shape the strategies and actions of the new facility.

Process...4 Integrated tracks to define the new facility

The Scenario Process is not intended to offer a fixed forecast; rather, it helps to show how today's trends and challenges could shape tomorrow's world. It is also intended to provide a framework for discussion and will test hypotheses and address questions such as: What will the result be if an additional two billion join the market economy and double or triple their income? How could these developments change corporate balance sheets? What products and services are needed? What would happen if the two billion people remain excluded from the market?

Pilot Projects. A number of pilot projects will be undertaken that will serve as illustrations of how joint initiatives between corporations and the UNDP can create added value to the traditional approaches of empowering poor people economically. The pilot projects should contribute to the overall strategy of creating sustainable economic opportunities for poor people and will be developed with the participating corporations.

Institutional Framework. Through the information flow from the interviews and scenario planning process, and with legal advise, the institutional framework of the facility will emerge.

II. Operational Phase. This phase will start with the launch of the GSDF and a call on capital from global corporations.

Project Team

The UNDP has initiated this process and is contributing a Project Team, headed by Mr. Henry Jackelen, Director of UNDP's Private Sector Development Programme (PSDP) and Mr. Andrei Marcu, GSDF Project Manager. They are joined in a strategic partnership by Mr. Bo Ekman and his team from NextWork and Mr. Theodore C. Sorensen and his associates from Paul, Weiss, Rifkind, Wharton & Garrison, who will act as the legal counsel and advisor.

A group of senior advisors will provide on-going strategic advice throughout the project period:

Mr. Juan Rada, The Environmental Partnership;

Mr. Bjorn Stigson, World Business Council for Sustainable Development;

Ms. Jane Nelson, Prince of Wales Business Leaders Forum;

Mr. Nicholas Sonntag, Stockholm Environment Institute;

Mr. Bob Tucker, Council of South African Banks;

Mr. Geoffrey H. Lipman, World Travel & Tourism Council;

Ms. Maria Livanos Cattaui, International Chamber of Commerce.

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