The year 2015 was filled with positive achievements for our collective future, with the adoption of both the UN Sustainable Development Goals (SDGs) and the Paris Agreement. The year 2016 came as a stark contrast to 2015. Our assumptions about the global economy were shaken, with many asking whether the costs of globalization are greater than its benefits.

But the future of the global economy is not bleak. A growing wave of companies, including large multinationals, fundamentally believe that prosperity—whether on a global, national or individual level—can be achieved if it is founded on the principles of a more sustainable, inclusive model of economic growth.

The Business & Sustainable Development recently launched a report, Better Business, Better World, which provides conclusive research to support this view. Through arguments, case studies and data, the report convincingly demonstrates—perhaps for the first time—that SDGs, also called the Global Goals, offer a compelling growth strategy for the world economy, including:

• An economic prize of up to $12 trillion by 2030 for the private sector, which could reach $30 trillion through even broader Global Goal opportunities.
• Up to 380 million jobs created by Global Goal business opportunities by 2030.
• 60 “hotspots” identified by the Commission across four economic systems – food and agriculture, cities, energy and materials, and health and well-being—which generate business revenue and savings equal to 10% of forecast global GDP. These 60 Global Goals hotspots could grow 2-3 times faster than the global economy.

These 60 hotspots translate into real opportunities in several key sectors. To name a few: affordable housing—the single biggest market hotspot identified by the Business Commission —accounts for the creation of 70 million jobs and up to $1 trillion in market value by 2030; circular models in the automotive industry are estimated to be worth $475-810 billion; and the reduction of food waste in the value chain is estimated to be worth $155-405 billion a year by 2030.

We must hear the report’s message loud and clear—and integrate SDGs into economic business and financial models across all sectors. We must also be realistic: in order for this new blueprint for business to reach its full potential, a good disruption must take place. It will require breakthrough technology such as digital platforms, as well as innovative financing tools. But the private sector will not be able to accomplish this alone. Government must be an active partner to scale sustainable markets through smart regulation and forward-looking policies, in particular:

• Establishing the right prices for natural resources. Today’s prices for carbon, water and energy do not reflect environmental or social externalities. Business leaders must work openly with regulators, business and civil society to shape fiscal and regulatory policies that create a level playing field more in line with the Global Goals. This could involve fiscal systems becoming more progressive through putting less tax on labour income and more on pollution and underpriced resources.
• Creating the right regulatory conditions to attract private investment into sustainable infrastructure, which is most critical to achieving the Global Goals. The total estimated infrastructure investment needs across the global economy amount to $90 trillion over the next 15 years. Aligning financial regulations with SDGs would enable long-term investment and reduce systemic risk by contributing to growth-boosting, much needed infrastructure and provide better returns for individual investors in a low-yield environment at the same time.
• Providing stronger incentives for long-term investing, including through blended finance instruments. Achieving the SDGs will likely require an estimated US$2.4 trillion a year of additional investment. Unlocking this additional investment depends on orienting the global financial system towards long-term sustainable outcomes, with public and private sectors sharing both the risks and returns. There is enough capital available, given that total private financial assets stand at more than$290 trillion and are growing by five percent a year. We need to take a fresh strategic look at how best to mobilize and deploy a smart mix of public and private capital to drive sustainable infrastructure investment. The Commission is therefore mobilizing a task-force of leading institutional investors, sovereign wealth funds, development finance institutions, investment banks and private companies to lay out a “blended finance action plan” for the SDGs.

• Encouraging businesses to step-up their investments in developing the skills and productivity of their employees. Governments must deliver on the much needed labour and education policy shifts to address underlying systemic weaknesses. This will in turn enable business leaders to further invest to improve their employees’ productivity, skills, resilience, access to credit—and as far as possible, ensure that no one is left behind. This task is becoming ever more important, given the way that new technologies are creating structural changes in labour markets across the world.
• Stamping out corruption. As the drive for greater transparency regarding the beneficial ownership of anonymous companies is gaining momentum, it is imperative for regulators to tackle corruption more actively. The B20 group of business leaders have publicly called for greater transparency in beneficial ownership and estimated that the corruption facilitated by the status quo adds 10% to the costs of doing business globally. Such costs inevitably hinder the ability of the businesses to accelerate the alignment of their strategy with SDGs.

Business leaders who are serious about the transition to a sustainable economy can help push public regulation in the right direction, and scale up cooperation between the private sector and governments to achieve the SDGs. The next generation of purpose-driven economic growth is within our reach. So is the next era of purpose-driven competitive advantage.