No. 90 – May 2016 Matching businesses, public support and sustainability ambitions Sebastian Große-Puppendahl, Bruce Byiers and San Bilal Key messages Public instruments to support the private sector, for both development and commercial interests, have similar objectives and take similar forms. They, therefore, offer potential synergies to achieve more sustainable development outcomes, while sharing risks, costs and resources. ECDPM research points to a lack of consistent sustainability and development criteria for businesses to access public support instruments. While this is important for development cooperation, commitments to both the 2030 Agenda and policy coherence for sustainable development also raise their importance for commercial instruments. As development and commercial objectives are increasingly sought through private sector engagement at EU and national levels, there is a need for a more integrated approach to tackle global challenges: one that explicitly recognises the similarities between commercial and development instruments and draws lessons from both. Systematically applied, sustainability criteria could increase the effectiveness and impact of all public support instruments to businesses and help ensure that firms actively contribute to development outcomes, beyond ‘doing no harm’. 1. Sustainability objectives and dilemmas Over recent years value chains have grown in importance as a means of production and trade, offering potential opportunities for developing and emerging economies to engage and integrate. Simultaneously, developing countries’ governments promote inwards investment in order to exploit resources, create jobs and help pay for infrastructure and other services to further develop and increase social and economic prosperity. At the same time governments in Europe and institutions of the European Union (EU) also increasingly focus on supporting businesses to promote trade and investments outside the EU. Typically, public instruments to support the private sector fall into one of the two following categories: commercially-oriented instruments to encourage internationalisation, and development cooperation instruments, generally financed by official development assistance (ODA). Both categories of public instruments aim at supporting business in terms of matchmaking, investment promotion or/and technical assistance. They both aim at building on market forces and business incentives. But they differ on their stated objectives. While commercially-oriented instruments focus primarily on stimulating private economic returns, those focused on development ostensibly aim to use private sector involvement to deliver development impacts.