Multistakeholder partnerships are essential to achieving the systemic changes outlined by the U.N. Sustainable Development Goals (SDGs). WRI’s forthcoming report, A Time for Transformative Partnerships: How Multistakeholder Partnerships Can Accelerate the U.N. Sustainable Development Goals, examines how partnerships can drive these efforts more effectively by focusing on the key elements of transformative partnerships, such as leveraging the strengths of partnership stakeholders and embodying foundational success factors.
This WRI report, in collaboration with Partnering for Green Growth and the Global Goals (P4G), Global Green Growth Institute (GGGI) and the World Economic Forum, defines transformative partnerships as those that disrupt the status quo, take a systemic approach and generate long-term, sustained change. In addition to these three characteristics of transformative partnerships, the report introduces a partnership continuum, which offers a framework to contextualize transformation pathways partnerships may pursue.
This research observed that partnerships working to drive transformative change tend to do so in two ways: by changing a policy or sector practice, or by launching a commercial product or service. The continuum places transformative partnerships according to these end transformation objectives and partnership’s intermediate goals.
Partnerships that drive towards policy or practice changes are enabling partnerships. These partnerships convene stakeholders across an issue area or sector to set standards, share knowledge and best practices or advocate for new policies. By shifting a policy or practice, these partnerships help create an environment that enables all actors within a system to transition to a more sustainable pathway.
Market-driven partnerships drive towards the launch of a commercial business model. These partnerships affect change through market signals, using a new product or service to change the way other stakeholders within a system operate.
While partnerships can find success at any point along the continuum, this research found that partnerships often evolve as they mature, shifting either left or right along the continuum. Early-stage partnerships can utilize an understanding of these dynamics to help them contextualize where they are in their current transformation journey and set impact-oriented goals. The following section focuses on partnerships with commercial goals that move from left to right, starting with enabling activities and the intent to change a policy or practice before engaging in market-driven activities more directly.
Continuum Dynamics in Practice
We found that partnerships seeking to transform a system through a commercial solution often start as enabling partnerships before transitioning to market-driven activities. This common partnership experience reflects that shifting a policy or convening the right network stakeholders is often a critical first step, even when a partnership’s primary end goal is to launch a new business product or service.
The following two market-driven partnerships exemplify this. Both had commercial goals, but began by building an enabling environment that made it easier to subsequently launch commercial activities with needed policy and stakeholder support. As such, these partnerships used both enabling and market-driven actions to progress towards their end transformation goals. These examples may prove as particularly helpful models for partnerships with commercial goals to see the practical steps involved in building an enabling environment as a vital precursor to market-driven activities.
The Climate Finance Partnership
Through a new blended finance model, the Climate Finance Partnership (CFP) aims to catalyze investment and redirect financial flows toward sustainable development initiatives in emerging economies. Founded in 2018, the partnership combines the expertise and capital of governments (Agence Française de Développement, Federal Ministry for the Environment, Nature Conservation and Nuclear Safety of Germany), the private sector (BlackRock) and philanthropies (The William and Flora Hewlett Foundation, The Grantham Foundation for the Protection of the Environment and the IKEA Foundation).
CFP’s goal is to launch a market-driven investment model to channel private finance to climate-related activities in developing countries. To do this, CFP first focused on enabling goals, strategically convening actors and structuring the partnership to create the conditions necessary to mobilize private sector capital. The partnership created the enabling conditions to shift investment norms by sharing information on the market opportunities accessible in a low-carbon economy and reducing the perceived investment risk of sustainable development initiatives in emerging markets. One way CFP did this was by engaging government actors, philanthropic financing and BlackRock, the world’s largest asset manager. This sent a strong signal to fund managers globally that sustainable sectors like renewable energy, energy storage and low-carbon and electrified transportation in emerging economies are profitable.
Generating strong industry buy-in and setting the stage for changes in investment practices enabled CFP to finalize its investment model, shifting to the right on the continuum. Announced at 2020 World Economic Forum, the partnership’s blended finance vehicle will feature a first-loss tranche of $100 million in catalytic capital, anchored by government and foundation partners, that BlackRock will use to mobilize a goal of at least $400 million in institutional capital commitments. Investments will focus on sustainable infrastructure in Southeast Asia, Latin America and Africa.
Sustainable Special Economic Zones
Sustainable Special Economic Zones (SSEZ), a P4G-funded partnership, aims to transform special economic zones — which are areas with regulations conducive to foreign direct investment — and industrial parks in Nigeria, Ethiopia and Kenya into hubs for low-carbon, sustainable and inclusive business and community growth. The partnership — including LADOL Free Mile, the Made in Africa Initiative, NIRAS, SYSTEMIQ and Savo project developers — is working to attract funders and tenants for three zones. Once completed, these zones are expected to support over 50,000 jobs, generate one billion in foreign direct investment and support sustainable infrastructure and renewable energy development.
Though special economic zones were previously identified as development strategies in SSEZ’s target countries, no implementation plans were in place. The partnership started with enabling activities to address the systemic barriers to special economic zone implementation. Throughout 2018 and 2019, SSEZ worked with the Kenyan and Ethiopian P4G national platforms to advocate for policies supporting the SDGs, emphasizing environmental management and facilitating inclusive growth. The partnership also coordinated existing efforts to align policies and build on local and national development priorities. These activities were critical in mainstreaming the value of sustainable principles in industrial parks and building the base of support needed for SSEZ to launch its commercial program.
By creating this enabling environment, SSEZ developed and launched the project development company Savo Project Developers in early 2020. This allowed SSEZ to build creditability and match with the Private Infrastructure Development Group, which will work with the partnership to replicate the SSEZ model in other countries across P4G and GGGI networks. SSEZ is now nearing financial close with one park in Nigeria receiving financial commitment of $60 million as part of a total $170 million development plan. Additionally, two zones are underway in P4G country partners Ethiopia and Kenya.
Building Effective Transformative Partnerships
At their best, transformative partnerships can mobilize resources, spur collaboration and create novel solutions to the world’s most pressing challenges. And, while there is great hope for partnerships to drive this systemic change, true transformational partnerships remain hard to find. Understanding movement along the transformative partnership continuum can help partnerships with transformative ambitions contextualize where they are in their transformation journeys and link intermediate activities to their end transformation objectives.
For more information on the continuum and partnership transformation pathways, please be on the look out for the release of the WRI report on multistakeholder partnerships, A Time for Transformative Partnerships.