DEVELOPING AND GOING GREEN

UNDP chief has ambitious agenda

Migration is in part a failure of development. … [In a world of] instant access to information about realities everywhere in the world, it’s not surprising that people start packing their bags

You might say that Achim Steiner was born for his role as administrator of the United Nations Development Programme (UNDP). Born in Brazil to German parents in 1961, he grew up in an era shaped by the Cold War — when, as he put it, the divide between rich and poor was often demarcated by the distinction between developed and developing countries. “Having been born in [a developing country], I think it led me very early on to decide that I wanted to work in the broader field of development,” he says while in Singapore for the seventh Responsible Business Forum on Sustainable Development. “The interest is perhaps less professional and more one of having grown up in Brazil and having had parents who moved to different parts of the world and made me already, as a child, discover the excitement of getting to know different cultures, different places.” Mr Steiner spent his first 10 years in Brazil and the next few in Germany, before finishing university in the UK. His working life has taken him all over the world: India, Pakistan, Oman, the United States, Switzerland, South Africa and Zimbabwe. At first glance, the earlier years of his CV may not seem related to development as such, featuring roles in the International Union for Conservation of Nature, the World Commission on Dams, and the United Nations Environment Programme (UNEP), among others. Yet, that would be a false assumption. Development and the environment cannot be easily separated, he points out. In fact, working in the former field led to an interest in the latter.

ENVIRONMENTAL BLIND SPOT

While studying Philosophy, Politics and Economics at the University of Oxford, Mr Steiner specialised in development economics. “But as I began to work in the field of development, very quickly I became convinced that actually at that time (the 1980s and 1990s) … the greatest Achilles heel for the future of development and sustainable development — that paradigm was then emerging — was really a kind of environmental blind spot.” From early on, he was drawn to that environmental blind spot: issues such as how poverty is related, at least in part, to access to natural resources and the degradation thereof. After leaving the UNEP in 2016, he was appointed director of the Oxford Martin School, a research unit in the University of Oxford that focuses on global challenges such as climate change, food security, inequality and the future of work. Last year, Mr Steiner was asked to return to the UN, this time to head the UNDP. Yet this did not mean moving away from environmental issues, as such issues have now become part of the bigger picture. “The Sustainable Development Goals are, in a sense, a key milestone in realising that the environment is not an afterthought anymore: it’s integral to addressing social and economic objectives,” he says. “So the opportunity to lead the UNDP seemed like a very logical step of returning to the broader development field that I had always set out to work in.” The 17 Sustainable Development Goals (SDG) include ending poverty, reducing inequality, improving health and education, as well as taking action on climate change and preserving the environment. They are relevant not just to policymakers, but also to businesses, says Mr Steiner: “These goals have become a framework to look at the future. They are a prism through which to understand what are the likely factors that will shape the markets of tomorrow.” The goals, he adds, are the “differentiating criteria” that markets and consumers will look at in assessing which businesses to bank on for the long run. In his opening plenary address at the Responsible Business Forum, co-organised in October by Global Initiatives and the UNDP, Mr Steiner highlighted the need to tackle climate change in particular, telling an audience of business leaders: “The imperative to change is becoming ever more clear.” The good news, he says in an interview, is that global attitudes toward climate change have seen phenomenal progress in the last two decades. Having worked in recent years on the transition to a green economy, he has had a front-row seat to this transformation. “We are no longer just talking about this in hypothetical terms. It’s beginning to unfold.”

THE GREEN ECONOMY

The average person, having read one too many headlines about climate change denial or the the United States’ withdrawal from the Paris Agreement on greenhouse gas emissions, might be forgiven for having a less optimistic view. But Mr Steiner is not one to despair. “Take a step back,” he says. “We should for a moment reflect on the fact that it was only in 1992 that the world established a Framework Convention on Climate Change.” “So here we are … not even 30 years later, we are already witnessing the most fundamental transformation of a global economy ever undertaken in human history.” Changing industries include mobility, urban infrastructure and energy. Mr Steiner observes that investments in renewable energy infrastructure today annually exceed total investments in other options such as oil and gas, coal, and nuclear power. This demonstrates an awareness of the need to decouple economic progress from emissions – as well as the power of technology, and the existence of options for action, he adds. Nor is this just in industry. “We are seeing new instruments emerge, for instance, in the capital markets. Green bonds, which essentially were irrelevant in the financial markets just five or 10 years ago, have virtually overnight risen to US$150 billion.” It is still possible to tackle climate change, Mr Steiner concludes. “But not if we allow certain sectors or individual countries or even political leaders to essentially make themselves unaccountable for what they’re imposing on the rest of the world.” For any society to embrace change, it must be persuaded that this is necessary, doable, and to its benefit. That is precisely the story of climate change over the past 25 years, he believes. “First of all, beginning to understand why it matters. Secondly, being persuaded that you can act on it. And thirdly, realising that actually if we have less pollution, if we have better mobility systems, we’ll actually have a better life, so why would we not go into such a transition?” As consumers come to this realisation, so will companies. “Many companies today sense that the market of tomorrow will demand of them to be part of the solution to climate change rather than the problem.” He cites the furniture giant Ikea’s decision in 2015 to sell only energy-efficient lightbulbs, “taking a very bold leap in terms of consumer preference” and leading by example. Technology-driven such as Amazon, Microsoft and Ant Financial have also taken steps to improve sustainability: “Many of these companies are looking at the market of tomorrow as essentially rewarding them for being both conscious of the challenges but also offering solutions to customers.” Similarly, more sovereign wealth funds, pension funds and investment funds are looking not just at return on investment, but also for a broader impact. And the UNDP is increasingly finding itself in partnerships and discussions on how the Sustainable Development Goals can be part of “de-risking” the investment landscape, says Mr Steiner. “If we can help to align more private-sector finance to invest in sustainable development outcomes, such as the Sustainable Development Goals are calling for, we not only help countries to address environmental, social, economic challenges and opportunities, we also in a sense enable investors to broaden the market into which they can put their money.” Take the example of energy. In the traditional energy market, no one is “accounting for the externalities” of power generation, such as pollution and emissions. But what if an investor is offered the option to invest in clean energy instead? “Suddenly your investment becomes not only an investment that you will get a rate of return on, but you’re actually contributing to a change in the energy infrastructure of the world. And suddenly your money becomes part of the solution we’re looking for, rather than amplifying the problem.” Investors can also make a difference by supporting green innovations that tackle problems such as plastic waste or aid recycling efforts, he adds. Product design matters. Firms could design smartphones that makes it extremely difficult to recycle component materials such as precious metals. Or, as has been done before, industry and the UN can collaborate to introduce design principles in the manufacturing process to facilitate such recycling.

INEQUALITY AND ITS DISCONTENTS

Sustainability is not the only area of development where markets can play a role. Take inequality, with its attendant risks of unrest and alienation: “Economic systems that function more on a market-based approach are perfectly capable of registering these risks and then beginning to accommodate them.” That was precisely the case with the birth of social welfare systems in the 19th century, which arose partly out of “a degree of enlightenment”, but also due to the realisation that “the entire economic model was at risk if too many people felt excluded”, says Mr Steiner. A similar risk might well be emerging today, and countries need to address it. He points to “one of the very disturbing realisations of the last few years”: that GDP growth can mask not just the loss of natural wealth and capital via environmental degradation, but also the “very corrosive phenomenon” of inequality. Every country, at every stage of development, is struggling with the issue now, he adds. “It’s a structural challenge that development very often exacerbates rather than resolves.” Recognising this, the UNDP is working together with the World Inequality Lab at the Paris School of Economics on the 2019 Human Development Report, aiming not just to describe the phenomenon of inequality, but identify the policy tools and opportunities to address it. The idea is to achieve economic progress while maintaining broad-based participation in such economic success, rather than having the fruits concentrated only at the top. Global inequality — not just inequality within countries — is also cause for concern. Mr Steiner points to Europe, where stability and cohesion has been put under strain by an influx of refugees from the Middle East and Africa. While this is partly the fallout of armed conflict in the region, it also reflects a difference in perceived opportunities. As he puts it: “Migration is in part a failure of development.” Governments and the international community are now factoring in the risks of having a continent such as Africa not developing infrastructure and services fast enough, he adds. It is logical for European leaders to ask how they can help Africa’s development accelerate, so the continent’s citizens “have every reason to believe in the future of their economies and their opportunities there”. Noting that the UNDP is carrying out a research project with young African migrants to understand the drivers of migration, Mr Steiner adds: “Sometimes it’s not just the simple narrative of poverty and desperation, it’s a sense of a lack of hope and perspective that they can realise their dreams and aspirations at home.” In a world of social networks, with “instant access to information about realities everywhere in the world”, a young graduate with poor job prospects at home can easily see better ones elsewhere: “It’s not surprising that people start packing their bags.” One complicating factor is the speed at which technology is changing the face of work. “How do you address the investment in education for people who in 10 years’ time may have to do an entirely different job, if they are to have a job?” Governments are having to rethink investments in human capital on a scale and at a pace that is probably unprecedented. Furthermore, this is the first technological revolution to affect all countries simultaneously, in contrast to previous waves such as the age of steam, where industrialisation occurred in one region and others provided resources and labour. Consider, Mr Steiner suggests, the case of an economic planner in an African country today who might well be able to attract manufacturing investment. Yet what if this is so automated that it has a neutral impact on employment in the country? In its work today, the UNDP has to grapple with both past and future, he sums up: helping countries deal with the legacy of development failures, while also helping policymakers design development pathways that respond to the many challenges that loom on the horizon, and are already discernible today.