How the C-suite is reaching for Global Goals
The following article is an excerpt from our State of Green Business (SOGB) 2017 report. Published by GreenBiz in partnership with Trucost, it provides a global view of the year's trends in sustainable business. The report is free to download here.
Sustainable development was defined by the United Nations Brundtland Commission in 1987, and our friend John Elkington coined the phrase "triple bottom line" more than 20 years ago. But as far as business is concerned, there hasn’t been a good yardstick for two out of three of those bottom lines.
That may change as more businesses develop strategies that align with the U.N.’s Sustainable Development Goals (SDGs), a set of 17 global goals intended to frame the efforts needed by the world’s businesses, governments and citizens between now and 2030. They include such aspirations as "End poverty in all its forms everywhere" (Goal 1), "Ensure access to affordable, reliable, sustainable and modern energy for all" (Goal 7) and "Conserve and sustainably use the oceans, seas and marine resources for sustainable development" (Goal 14).
It’s not as if the sustainability profession hasn’t kept score. There are environmental laws to comply with and volunteer hours to be counted. There are any number of "best of green" lists ranging from the suspect (do we really need to call them out?) to respectable (such as DJSI and FTSE4Good).
And those have been supported by a growing number of frameworks and surveys, from the GRI to CDP to SASB and beyond. Countless hours are spent by organizations in responding to these requests, and those questionnaires aren’t going away anytime soon.
The gnawing question for most CSR and sustainability executives is how to get anyone outside their department to pay attention. More important, does all the data in those reports mean we’re doing much good for the larger world, or even our own organization?
This is where the emergence of a greater focus on materiality has come into play. In the past, organizations have solicited stakeholders for this input and then had them rate and rank the issues. What’s been missing is any way to talk about the intersection of business and society.
Business practice goes global
The SDGs may provide a way to bridge this gap in a way that also engages the C-suite.
"The recent spotlight on the SDGs has provided us a tremendous opportunity to engage our internal stakeholders from various parts of the business in discussions about goal-setting, shaping our priorities and putting these priorities at the heart of our strategy," said Kim Marotta, MillerCoors’ sustainability director. "This framework can open up opportunities for us to address our material issues in an integrated manner and develop transformative solutions that not only future-proofs our operations, but can also help our business remain commercially sustainable."
Novozymes CEO Peder Holk Nielsen said the SDGs gave his company an opportunity to re-engage in a discussion about its business purpose and strategy: "Our point of departure became the Sustainable Development Goals."
He explained: "There are a few where we can have a major impact, circling those on sustainable food supply, which is covered by two or three SDGs, and sustainable energy supply. We have translated this into five non-financial targets, which is our interpretation of where we can make a difference in the world… to deliver transformative innovations and create and catalyze partnerships."
Another supportive CEO is Unilever’s Paul Polman, who has embedded sustainable business practices into his company’s activities and has created added value throughout its supply chain: "The SDGs present a clear moral case for change, but companies must recognize that they represent the business opportunity of a lifetime too and must adapt to take advantage of it."
For many organizations, getting their arms around the SDGs has taken some time. The World Business Council for Sustainable Development president Peter Bakker noted that the SDGs’ 17 goals and 169 targets are a lot for any company to keep track of. On top of that, the goals are closely interconnected, which adds further complexity.
Luckily, there are a number of resources to help businesses incorporate the SDGs into corporate strategy. For example, the U.N. Global Compact in partnership with KPMG developed the SDG Industry Matrix, which showcases industry-specific examples and ideas for corporate action related to the SDGs.
The WBCSD collaborated with the Global Compact and GRI to develop the SDG Compass, which provides guidance to companies on how to align business strategies with the SDGs and measure their impact. The alliance complemented these efforts by developing the SDG Business Hub, a dynamic online platform showcasing business insight, emerging tools and resources in this space.
Companies are turning to these tools to help them approach the SDGs holistically. "There’s really not one SDG that we value over the others," said Rohini Anand, senior vice president of corporate responsibility and chief diversity officer for food services giant Sodexo.
For some, the focus is on a few specific goals. At GSK, a healthcare company, the main focus is to have an impact on Goal 3, on health. According to Priya Madina, director of government affairs and global issues at GSK, "We are not limiting ourselves to contributing solely to the implementation of this particular goal. Much of our work in the global health arena — such as strengthening healthcare infrastructure, fighting malaria, improving access to antiretroviral treatment for HIV, working to help prevent child deaths and tackling non-communicable diseases — all contributes to the SDGs."
A network of supporting goals
Companies such as GSK and Sodexo won’t be taking on these challenges by themselves. Indeed, Goal 17 recommends harnessing partnerships as a means of supporting the other 16 goals, and a number of collaboration models are emerging.
One example: A group of 36 agricultural businesses joined together to launch the Global Agri-business Alliance to tackle environmental challenges in farming supply chains and communities around the world. The CEO-led private-sector initiative is seeking to "contribute significantly" to the SDGs, particularly with regards to the second SDG on tackling hunger, nutrition, food security and sustainable agriculture.
Another: Thirty leaders from business, government and foundations committed to work together toward the SDG target to cut food waste in half over 15 years. Food waste and loss is a $940 billion problem in unrealized revenue to farmers and producers. And, because unharvested or uneaten food rots on fields or in landfills, food waste emits enough methane to account for 8 percent of global greenhouse gas emissions.
Educating the next generation of business leaders also will help ensure ongoing progress toward the SDGs. In 2007, the Global Compact and several academic institutions launched the Principles for Responsible Management Education. The initiative has grown to more than 650 academic institutions in over 85 countries and includes more than one-third of the Financial Times' top 100 business schools.
For all of the corporate embrace of SDGs, a long road is ahead. A 2016 report by DNV GL concluded that none of the Sustainable Development Goals will be met in all regions of the world by 2030, and not even half of the 17 SDGs will be met in any regions.
That’s a sobering analysis but contains an important call to action: "Extraordinary action is not the exclusive domain of the private sector. But what business does best is innovate, and lead technological development that can leverage vast global changes."
Key players to watch
António Guterres — for the SDGs to become reality, the United Nations will need to do a better job of developing those partnerships and alliances, and its new Secretary-General will be leading this effort.
AtKisson Group — creator of the nonprofit 17goals.org to help everyone everywhere learn about the SDGs and give them the tools to take action —and one of the best songs about the SDGs you’ll ever hear.
Business and Sustainable Development Commission — a group of academic, NGO and business leaders has established their mission to make the case for why business leaders should seize upon sustainable development as the greatest opportunity of a lifetime.
SDGhub.com — a one-stop resource center for supporting business in aligning with the SDGs, produced by the World Business Council on Sustainable Development.
Unilever — CEO Paul Polman has been a strong business voice in support of the SDGs and we’ll be watching how his company implements sound business programs that support the SDGs.