Four Ways that Business Can Do More for Sustainable and Inclusive Cities

Published: Thursday, December 15th, 2016 by Lenora

Business-city collaboration, one of the themes at Habitat III in Quito, has tremendous potential to advance sustainable and inclusive cities. Governments, NGOs and a small community of corporates in attendance in Quito repeatedly rang the bell for the private sector’s role in driving change, from small scale to systemic.

Ban Ki Moon, General Secretary of the UN. Official opening in the first plenary meeting. Habitat III Conference on Housing and Sustainable Urban Development taken place in Quito, Ecuador from October 17th to 20th.UN Secretary-General Ban Ki Moon speaking at the Habitat III. Source: Habitat III Conference

While the corporate and financial worlds didn’t step up for Habitat III the way they did for COP21 in Paris, for instance, the benefits of the private sector’s products and services were on display. Mobility, low carbon energy, resource efficiency, municipal services, circular economies, housing, financing and more come to our cities via the corporate world. Business improves, increases access, makes efficient and measures outcomes. Unfortunately, two critical business sectors for cities – real estate and financial institutions – were mostly missing. Still, the World Urban Campaign and other major business coalitions rallied an effective showcase of business solutions.

Beyond energy efficient lighting solutions and cable cars, business can also go beyond considering cities as customers. At its best, the private sector partners with cities to bring perspective, process and resources. Resource-constrained cities, especially those in developing economies, often need all three.

The private sector can bring these four critical benefits to the goal of sustainable and inclusive cities (in order from most narrow to most broadly engaged):

  • Staying lean and focused. Business can help cities pursue the most cost and resource efficient execution, especially with lengthy, complex processes and projects. Business often also contributes useful measurement techniques.
  • Easymile EZ10 driverless Shuttles at Helsinki

    Easymile EZ10 driverless shuttles at Helsinki.
    Source: Easymile / Copyright Metropolia UAS

  • Growing new markets. The private sector invests in and marshals physical inputs, human capital, networks, technology, creativity and innovation that cities may not access as easily. This can lead to developing sustainable products like self-driving buses, jump-starting finance for urban regeneration, making urban logistics and supply chains more resilient or developing clean energy infrastructure through PPPs.
  • Going beyond local. Working with business can help cities look beyond their narrow needs and geography. Business can often provide leadership and disseminate best practice from their own, often international networks. Technical solutions can often travel, with local adaptation, from one site to another.
  • Engaging directly with key stakeholders. A more future-facing effort for business, corporates at the vanguard of sustainability are experimenting with stakeholder relationships – with customers, workers, regulators and communities. The private sector and cities share the goal and challenge of retaining productive, educated, healthy and tax-paying employees and residents, as well as confronting climate change.

How do these principles support the lofty goal of urban transformation? The major transformation was the focus on people, especially people-centered design, policy, services and infrastructure, and the drive for specific solutions. A few illustrative outtakes from across the conference:

  • Judith Hermanson of IHC Global pointed to PPPPs, adding people to the formula of public private partnerships.
  • Peter White, COO of the World Business Council for Sustainable Development, reminded us that business and cities alike “will be judged by what we do not what we say.” WBCSD advances holistic solutions-driven approaches across sectors with its members.
  • Gary Sharkey of the Global Cities Business Alliance shared insights from its Housing for Inclusive Cities work: the need for rental housing, socioeconomic inequity in commutes, workers’ rejecting long commutes and the labor market risks of footloose workers.
  • CDP, which engages extensively with the private sector through research, campaigns and environmental reporting, pointed to its understanding of the status of city-business collaboration to address climate change.
  • Bert Smolders of Arcadis’ Shelter program pressed for early business involvement in urban planning. See his incisive comments here.
  • Hazem Galal of PwC showed PwC’s Total Impact Measurement and Management framework as a tool for planning, executing and evaluating public-private urban initiatives.

    PwC Total Impact Measurement and Management (TIMM)

    PwC’s Total Impact Measurement and Management (TIMM) Framework
    Source: PwC

  • Annemieke Kievit of AkzoNobel highlighted the company’s Human Cities and Let’s Colour project collaborations directly with citizens to reimagine and revitalize their spaces (nicely summarized by Citiscope here).
  • Doppelmayr pointed out the massive cost and social inclusion advantages of urban cable cars for mass transit solutions vs. other transport solutions, especially in locales with poor infrastructure.
  • In promoting LED lighting, Harry Verhaar of Philips Lighting brought together energy and resource efficiency, carbon reduction, the circular economy, policy advocacy for energy efficiency, security and aesthetics.
  • In my comments at the Business Assembly, I suggested that the three underrepresented intersections between business and cities – finance, real estate and social enterprise – could be leveraged better for financing solutions like green bonds, responsible and impact investment vehicles like real estate investment trusts, sustainable and inclusive affordable housing and business innovation, like urban enterprise incubators.

It remains to be seen whether the private sector can fulfill the aspirations of the New Urban Agenda or the Sustainable Development Goals. When corporate engagement consists only of corporate social responsibility programs, the larger societal benefit of these small targeted efforts may be less useful than the reputational and marketing benefits for the company.

Business in developing economies can also be associated with too cozy and even corrupt relationships with governments, including municipalities. Cities, likewise, would need to work with the private sector earlier and more often whereas the New Urban Agenda suggests that the private sector is mostly useful at the implementation stage. Finally, people-focused urban solutions require long, hard committed work and partnership with grassroots and community organizations to engage and build trust.

There’s no question that the private and financial sectors will be called on increasingly to help solve our cities’ most intractable problems. Business needs to get involved earlier, both directly with non-government stakeholders and through government-led initiatives, thinking beyond selling a product or service today to solutions for tomorrow.