Goal 1 - End poverty in all its forms everywhere. Extreme poverty rates have more than halved since 1990, but 1 in 5 people still live on less than $1.25 a day, and millions more live on incomes below that deemed adequate for subsistence. Poverty is characterised by hunger, malnutrition, limited access to basic services, social discrimination and exclusion, and lack of participation in decision-making.
What is Goal 1?
Goal 1 of the Sustainable Development Goals is ambitious - to end poverty in all its forms everywhere by 2030. The UN estimates that while the number of people living in extreme poverty fell by half between 1990 and 2015, globally, over 800 million people are still living on less than US$1.25 a day and are unable to meet their most basic daily needs with many lacking access to adequate food, clean drinking water and sanitation. Poverty has multiple dimensions which include exposure and vulnerability to adverse economic, social and environmental events such as unemployment, natural disasters, war, disease and disability.
Targets linked to Goal 1 therefore include those which aim to increase poor people's resilience to such shocks (1.5); implement national appropriate social protection systems (1.3); and create sound policy frameworks at the regional, national and international levels, based on pro-poor and gender-sensitive development strategies, to support accelerated investment in poverty eradication actions (1.b).
Why is Goal 1 important?
That hundreds of millions continue to live in extreme poverty and face a daily struggle to meet their most basic needs is clearly unsustainable. The UN notes that poverty and inequality are detrimental to economic growth and undermine social cohesion, increase political and social tensions and, in some circumstances, drive instability and conflict. It follows then that reducing poverty can help to create the right conditions to encourage foreign investment in developing economies, particularly in rural areas and in the agricultural sector, which are often subject to under-investment.
Goal 1 is broad and overarching, with strong connections to many of the other global goals that are essential for poverty reduction, and that companies can endorse and contribute to achieving. Further examples include:
- Fair employment practices through the payment of a living wage, increased union representation to strengthen workers' collective bargaining power; and the sourcing of Fairtrade products to ensure that producers in development countries are paid a fair price (Goal 8 - Decent Work and Economic Growth);
- Fair tax practices in countries of operation, to enable state funding of vital public goods and services (Goal 10 - Reduced Inequalities); and
- Increased access to affordable medicine and healthcare (Goal 3 - Good Health & Wellbeing), and safe drinking water (Goal 6 - Clean Water & Sanitation).
How can companies contribute to Goal 1?
Ethical Screening identifies company activities and initiatives that are contributing directly to the objectives of the global goals, through the supply of relevant products or services, for example. Target 1.4 is particularly applicable here - it aims to ensure that all men and women have equal rights to economic resources; access to basic services; ownership and control over land and other property; inheritance; natural resources; appropriate new technology; and financial services, including microfinance.
Microfinance, also called microcredit, is a type of banking service that offers micro loans as well as current and savings accounts amongst other products, to individuals and groups in developing countries who would otherwise be unable to access financial services. Microcredit, which is increasingly being adopted by major financial institutions, can help individuals to break out of poverty through increased social mobility and access to employment opportunities. Standard Chartered, for example, reports that it made $1 billion available to microfinance institutions for onward lending to entrepreneurs in 2016 and 2017.
Mobile technology offers further opportunities; over 10 years ago, Vodafone's Kenyan associate Safaricom launched M-Pesa, a mobile phone-based money transfer, and microfinancing service, which enables customers to send, receive and store money via a basic mobile phone and, more recently in some markets, using a smartphone app. In 2016, M-Pesa served nearly 30 million customers across 10 countries (including Albania, the Democratic Republic of Congo, India, Lesotho, and Mozambique), processing some six billion transactions. In the same year, a study by the Massachusetts Institute of Technology, showed that in Kenya, the use of M-Pesa's mobile-money services had notable long-term effects on poverty reduction by helping Kenyans to save more money and an increased ability to withstand financial shocks. The authors found that there were particularly significant gains for women as it has offered more financial independence, allowing many to start their own businesses with an estimated 185,000 women taking up business or retail occupations over farming. Such results also contribute to achieving Goal 5 (Gender Equality).
Understanding that consumer needs and habits differ in developing countries is essential as it allows companies to adapt products and services accordingly. Individuals on a low income often shop daily for basic necessities so products can be designed to suit this context. Companies such as Unilever's Hindustan subsidiary, HUL, have long recognised that this is the case and sell soap, and other personal care and household products in low cost, single-use sachets in markets where many are unable to afford the full-size versions. HUL reportedly sells over 25 billion sachets a year in this way. Through simple yet highly effective approaches such as these, the private sector can contribute to increased sanitation and hygiene, with associated benefits for Goal 3 (Good Health & Well-Being).
Successfully achieving the targets outlined for Goal 1 will be largely dependent on the actions taken by governments at regional and national levels to implement appropriate social protection systems, and policy frameworks which support increased spending on poverty reduction strategies. However, as the examples above demonstrate, there is a strong business case for companies and investors to support Goal 1, as doing so can generate both financial and social benefits.
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