How the private sector can help create pipelines of sustainable urban development projects
Never has there been a more critical time for the private sector to partner with others to tackle the critical global challenges facing our cities and communities. In light of the world’s climate and environmental crisis, increasing inequity and rapid urbanization, everyone is talking about the dire need for collaboration. But how do we do it?
The answer, in short: through systems, support, harnessing collective will and recognizing that it is all about people working with people.
The urban arm of the United Nations Global Compact — the world’s largest voluntary corporate sustainability initiative — is driving a cross-sectoral task-force approach to sustainable urban development at the city level. This initiative is engaging the private sector alongside cities and other levels of government, civil society, communities and academia in developing and delivering high impact, sustainable urban development projects.
This local focus is strengthened by partnerships at the international and national level. It also is being developed with an eye to addressing the New Urban Agenda, the global agreement on sustainable urbanization adopted at last year’s Habitat III conference, as well as the landmark cities goal under the Sustainable Development Goals (SDGs). Following Habitat III’s call to action for all sectors to collaborate sustainable urban development, the challenge now is implementation.
This multi-partner approach to sustainable urban development is currently being rolled out as an umbrella initiative, City Partnerships — first in Australia and then more broadly. This system is closely aligned with a new U. N. initiative called the Implementation Facility for Sustainable Urban Development, which was ratified last month by member states at UN-Habitat’s Governing Council meeting in Nairobi as a mechanism to deliver objectives of the New Urban Agenda and SDGs.
City Partnerships focuses on enabling the development of partnered projects that are high impact, high value — and can attract financing. It aims to bridge a yawning gap: between, on the one hand, the billions of global dollars we know are available for investment in projects that will generate significant positive social, environmental and economic impacts, while generating a return; and, on the other, the distinct lack of supply of these viable projects at the city level today.
Why does this gap exist? Traditionally, local government and urban practitioners have tended to understand just one or two steps of the process of getting such projects to come to fruition. For the most part, they have not had the experience and partners to move from the diagnosis of an issue to securing the investment in and implementation of a partnered solution.
“Traditionally, local government and urban practitioners have not had the experience and partners to move from the diagnosis of an issue to securing the investment in and implementation of a partnered solution.”
Conversely, many private-sector organizations that work in urban development have skills at the commercial end of the spectrum but are challenged in engaging with local government.
Skilled facilitation of shared value is what is required, and partnerships need to be nourished and sustained. But, these facilitators also need to be well grounded in local realities: “Fly-in, fly-out” urban expertise is no longer appropriate. This is the gap that the City Partnerships model seeks to fill.
City Partnerships, as promoted by the UN Global Compact — Cities Programme, is a two-year supported process for building capacity, forming partnerships and developing projects. It seeks to engage resources from across sectors and open up collaborative opportunities with non-traditional partners that address critical issues in innovative ways.
The aims of this model are threefold. First, it seeks to produce an enabling environment for high-value, high-impact projects. Second, it will broker new partnerships. And finally, it aims to offer governance guidance in developing non-traditional public-private partnerships. Each of these three points are structured to ensure that commitment and partnerships are sustained.
The City Partnerships project-development process can be thought of as a pipeline. Building local capacity is critical: In the first phase, a city leader is nominated and trained along with leaders from other cities, thus building a community of practice. A city diagnostic is next undertaken with a broad range of local actors, to identify the breadth and scale of issues for the city. (We have a City Scan tool available for this process, although any other credible diagnostic tool can be applied to inform this step.)
The local group of partners then undertake a process to select a critical issue or issues on which the project should focus. These priorities are naturally diverse, but the style of project often falls within three types: those that tackle complex social, livelihood, environment and community issues at the local level or within an organization; those that change cities through the creation of places, such as multi-purpose, multi-sector precinct/urban labs; and the game-changing sustainable infrastructure projects for transport, water, power, waste, communications or other sector.
Securing funding is an essential component of sustainable urban development at the local level, yet it often poses a major obstacle. The capacity-building part of the City Partnerships process offers training and mechanisms to support the justification and attraction of investment into what we call PPPPs: public, private and people (civil society) partnerships.
Development of the business case for projects is supported by local colleges of business management, engaging postgraduate students in proposal development, with the review supported by the UN Global Compact – Cities Programme. Events are organized for attracting further partners and investment in projects or bundled groups of projects to reach over the USD 100 million threshold needed to interest pension funds.
Developing local capability and partnerships and having a replicable system ensures projects can be scaled up, leading to repeat successes. Let’s look at a few examples of multi-sector initiatives in UN Global Compact cities. Here, skilled local facilitators have engaged the private sector with government, academia and civil society to create innovative partnership projects — resulting in real and lasting collaboration with high-impact results.
The Cities Programme’s process draws deeply on the knowledge gained from the innovating projects of its member cities and regions. The important role for the private sector — and sustained projects led by task forces — in tackling challenges in cities has been seen throughout the almost 15 years of these city achievements.
“‘Fly-in, fly-out’ urban expertise is no longer appropriate.”
The programme’s first key project was instigated by a private-sector-led Australian nonprofit group called the Committee for Melbourne, along with the city. This became the Cities Programme’s platform for cross-sectoral collaboration, which we call “The Melbourne Model”. It’s comprised of multi-sector task forces set up to focus on a complex urban issue or issues in a project that is supported, but not fully owned, by local government. The project engages the private sector and civil society equally in its objectives and processes. (For more on the Melbourne Model, see this paper.)
In this initial project, from 2001 to 2003, a multi-sector task force worked to change the utility systems that were contributing to spiralling debt in vulnerable communities in the Australian state of Victoria. The project was a catalyst for changes to national legislation resulting in the current Australia-wide system, which offers allowances and interventions to clients experiencing financial difficulty. This is now standard industry practice and spans across the country’s utilities and telecommunications industries.
The experience sparked widespread interest. Since 2005, UN Global Compact member cities have been applying the Melbourne Model in their own distinct social and political settings, with wide-ranging projects and results.
Porto Alegre in Brazil, for instance, has led the application of the Melbourne Model with vulnerable urban communities, having grown into a city-wide engagement system called the Sustainability and Citizenship Networks of Porto Alegre. It grew from the high-profile resettlement of an area called Vila Chocolatão that took place from 2005 to 2011. Today this experience offers a viable replicable model for cities working to address poverty and inequity throughout the Americas and beyond.
The people of Vila Chocolatão had lived in extreme poverty since the 1980s in an informal settlement in the heart of Porto Alegre. While the community was beset by multiple problems, the threat of eviction ultimately provided the impetus for a project dedicated to social transformation. That eviction had been called for by the federal body that owned the land, although the action was postponed by a regional court.
The aim was to “build dignity”, through concrete actions, for residents who lived with neither citizenship nor fundamental human rights. To do so, locals decided by make use of Porto Alegre’s world-leading participatory-budgeting system, through which a newly formed group of women sought resettlement and housing. But they also called for “transformation”, making broader demands around livelihoods, health care and early childhood education.
A project initially led by the regional court brought together community leaders, the private sector, NGOs and city government. Each of these entities were able to take on defined, active roles in numerous projects working with residents. As most residents were “street pickers”, one of the core projects was establishing a recycling cooperative, including training. City Hall began bringing waste to the community for sorting.
Eventually the initiative turned into a multimillion-dollar recycling centre, funded and built by the engineering firm Usiminas. The centre, which opened in 2011, became the economic, social and environmental centrepiece of the new village, Residencial Nova Chocolatão. Today, it provides formal livelihoods for almost half the community.
Clockwise from left: Life for children in Vila Chocolatão (2010). The four managers of the Nova Chocolatão recycling centre (left and right) were all children in the old village. This is the first generation of children born in Nova Chocolatão. (Cities Programme)
Porto Alegre’s approach underscores several key elements of how a multi-partner project needs to work. It is critical to have defined shared values and purpose, a commitment to equality and inclusion, and a process for building relationships and trust with the local community based on action and delivery.
These initiatives also must be supported with ongoing facilitation, and be given the time and resources to evolve at the pace required to deliver long lasting social and economic change. They need to secure resources for projects that provide solutions — usually a blend of funding from the public and private sectors foundations, along with in-kind support. And they need a governance structure that protects them from the short-term tide of political cycles.
Are these big asks? Maybe — but they are achievable.
Climate, water and economic development
The face of multi-sector task-force projects within the UN Global Compact – Cities Programme network is notably diverse, given each city’s self-selection of local critical issues. For instance, San Francisco, another of the original UN Global Compact cities to pilot the Melbourne Model over a decade ago, brought together the city’s business community with government to tackle climate change — specifically mitigation, with the aim of reducing the city’s emissions.
“Porto Allegre’s experience offers a viable replicable model for cities working to address poverty and inequity throughout the Americas and beyond.”
This drive resulted in the establishment of BC3, the San Francisco Business Council on Climate Change, a non-profit group that today is a multi-sector force dedicated to forging collaborative, local solutions to climate change. BC3’s focus has grown to engaging San Francisco’s large corporate sector in establishing the city as a global model for local climate solutions.
Elsewhere business communities are looking to engage on sustainable urban development through water. In the U. S. city of Milwaukee, the private sector is taking a leadership role on the issue. Through its Water Council, businesses are collaborating with academia, city and state government and utilities for sustainable economic development focused on water solutions and a “whole of lifecycle” approach to water management.
Perhaps most interesting, this approach has been used to resuscitate a stuttering local economy. While the city struggled with the economic downturn of 2008-09 that came from the rapid loss in its manufacturing base, this partnership is resulting in Milwaukee becoming an economically revitalized, globally focused “water-centric city”.
Achievements include hundreds of new jobs and the regeneration of the inner city. Today, Milwaukee’s ‘Water Technology District’, a former brownfield site, has been developed into a mixed-use precinct that has attracted over USD 210 million in public and private investment, and is a showcase for sustainable urban development.
Leeuwarden is another Global Compact city that is bringing people together around water, resulting in the European “water technology hub”. Through its Watercampus, the Leeuwarden government, researchers and business community are working together to increase the value of the local water sector — the most important sector in the Netherlands. Like Milwaukee (a collaborative partner), Leeuwarden’s actions are focused on both the global and local, while also contributing to the city’s economic revitalization.
These few examples of multi-partner-led city initiatives illustrate the diverse range of outcomes possible through a supported but locally owned, locally driven approach to sustainable urban development.
A “one project” solution is not possible. We need to enable the formation of local coalitions, initiated through the facilitation of multi-partner projects and bonded through the success of collective efforts and overcoming shared challenges. To truly realize success — and the scale required for impact — these projects and partnerships must be connected to regional and national programmes, private-sector investment and international funding.
Cities cannot do it alone. We encourage you to join with us.
This article’s development was supported by Mim Kempson.