Promoting policy coherence between development co-operation and Responsible Business Conduct (RBC) supports the implementation of the OECD Council Recommendation on Policy Coherence for Sustainable Development (PCSD).
The Recommendation on PCSD encourages adherents to take a whole-of-government approach to development policy and finance. In this context, RBC can serve as a tool to support the implementation of the Recommendation on PCSD by providing practical ways to account for transboundary effects and enhance the contribution of investment and private sector activities to the SDGs.
RBC principles and standards set out an expectation that businesses – regardless of their legal status, size, ownership or sector – avoid and address negative impacts of their operations, while contributing to sustainable development in the countries where they operate. RBC emphasises the integration and consideration of environmental and social issues into core business operations.
The Addis Ababa Action Agenda on Financing for Development (AAAA) recognises the importance of business responsibility as a driver of development. The AAAA urges businesses to embrace a core business model that takes account of the environmental, social and governance impacts of their activities, and encourages businesses to adopt principles of responsible business and investing.
RBC contributes to increasing the development impact of businesses. For example, the implementation of RBC due diligence processes can help minimize environmental damage, increase job quality or promote productivity and innovation.
RBC can also help mobilise and align private finance and investment with the SDGs. As RBC expectations are increasingly integrated into investment decisions, RBC contributes to channeling finance towards projects and activities that are aligned with sustainable development considerations.
RBC is not a new topic for development co-operation actors, who have started integrating RBC in their activities. OECD data shows that although official development assistance (ODA) directly allocated to RBC promotion is limited, support for RBC has more than tripled between 2018 and 2020, from USD 11 million to USD 35 million.
Such support is often allocated to specific projects that support the implementation of RBC standards, for example by providing training to companies on the implementation of RBC standards or supporting governments in the establishment of an enabling framework for RBC.