International investment has grown substantially in the last decade, projected to have increased to nearly US$1.8 trillion in 2017. Much of this owes to the changing geography of the global economy. By 2016, foreign direct investment (FDI) outflows from developed countries in the Asia-Pacific reaching their highest level since 2008. China is now the second largest investing country in the world. Moreover, governments are increasingly recognising that business investment matters to sustainable development. In 2016, 58 countries and economies adopted at least 124 investment policy measures, the highest number since 2006 according to the UN Conference on Trade and Development. Most of these policy measures aimed at investment promotion, facilitation and liberalisation. The UN estimates that US$2.5 trillion will be required each year in developing countries to achieve the UN SDGs, and much of this will necessarily come from the private sector. As the largest and most representative business organisation – and the only private sector Observer to the UN General Assembly – ICC is dedicated to mobilising the expertise and resources of business in favour of the UN Global Goals.
Unlocking these investment opportunities, however, can sometimes prove elusive. Moreover, in an era of increasing protectionist rhetoric – sometimes followed up by policies restricting trade and investment – companies can be understandably hesitant to roll out projects half a world away that often require significant funding stretching several decades. The most oft-cited policy driver of FDI is the ‘investment climate’ – a combination of business regulations and government support. For business, predictability, transparency and efficiency are all crucial criteria for encouraging investment, as companies seek to assess and mitigate risk. This is good news because it means that small but effective steps taken by governments can have an immediate and sizeable impact.
In 2016, ICC laid out a series of the most critical principles for developing an attractive investment climate – the ICC Guidelines for International Investment. The guidelines – compiled by ICC’s international business network – sets out principles for both investors and governments on a range of issues, such as ownership and management, finance, fiscal policies, anti-corruption and technology. ICC encourages all governments to adopt these principles as a means of encouraging investments that facilitate sustainable and inclusive growth. Last June at UN headquarters, ICC also released the latest edition of its Business Charter for Sustainable Development. First launched in 1991, this third edition of the Charter provides a practical framework and set of tools for businesses of all sectors and geographies to shape their own sustainability strategy – an accessible starting point for SMEs in emerging markets as well as for companies in advanced economies.
The key takeaway from all of ICC’s guidance is that business investment in sustainable growth and development is necessarily founded on a strong dialogue and trusting relationship between the public and private sectors. As governments factor private sector expertise into their policy-making and in turn provide business with the transparency and predictability it needs to inform investment decisions, a path towards the imposing sums needed to achieve the Global Goals becomes visible. Together, a more sustainable future is within reach.