Private sector engagement @ SDC
As recognized in international agreements such as the Sustainable Development Goals of the Addis Ababa Action Agenda for Financing for Development, the private sector has a key role to play in achieving the 2030 Agenda for Sustainable Development by contributing its resources, capacity for innovation and finance to address some of the world’s most pressing challenges.
The role of the private sector in sustainable development
The 2030 Agenda for Sustainable Development as well as SDC’s overarching mandate to reduce poverty can only be achieved by joining forces with all relevant stakeholders in creative and effective partnerships. The innovative power, expertise and resources of the private sector must be harnessed for addressing global development challenges. Engaging with the private sector is a priority of Switzerland's International Cooperation strategy 2025-2028 and the SDC seeks to promote the cooperation with the private sector within all its thematic areas.
The private sector is an essential driving force for reducing global poverty and promoting sustainable solutions. In developing countries, nine out of ten jobs are provided by the private sector, and many companies bring innovative products and essential services to market that improve living conditions for poor and vulnerable groups. The international community and the private sector have recognized the need to work together to achieve the ambitious Sustainable Development Goals (SDGs) and to tackle today’s global challenges. Private sector engagement (PSE) as an approach in international development cooperation is one way to promote results-driven collaborations with positive impact.
Key criteria of private sector engagement at SDC
For decades, the SDC has seized opportunities to partner with private sector actors to further its development goals. For SDC, Private Sector Engagement (PSE) is founded on a common set of values framed by a shared vision towards sustainable development. The goal is to achieve greater impact through market-based solutions by creating synergies and building on the strengths and knowhow of each partner.
In a PSE setup, one or several private sector partners and the SDC join forces on an equal footing and share benefits, costs and risks.
This implies the following core attributes:
- Co-initiating: Jointly building the cooperation, including the development of new approaches.
- Co-steering: The partners work together for the success of the cooperation. As a rule, both SDC and the private sector partner(s) actively participate in the governing body of a PSE cooperation.
- Co-financing: All partners must contribute financially and/or in kind.
Co-ownership and co-funding of the intervention is what differentiates PSE from other forms of interaction with the private sector, for example, private sector development.
On top of those core attributes, PSE collaborations must respect the following principles: compatibility with the SDC’s objectives, measurable development outcomes, additionality, complementarity, subsidiarity, avoidance of market distortion, and transparency.Partnerships can be initiated with a variety of committed partners: large companies and multinational enterprises, small and medium-sized enterprises, social enterprises, impact investors and grant-making foundations. In principle, private sector actors of all nationalities are considered for PSE collaborations.
Key documents
The General Guidance on the Private Sector in the Context of the International Cooperation Strategy 2021–24 and the SDC Handbook on Private Sector Engagement are the main guiding documents for PSE collaborations at SDC. Please find the documents below.