How can businesses turn SDG aspirations into tangible strategies?
Building businesses around the United Nations' Sustainable Development Goals (SDGs) pays off — not just for the planet and society, but for the bottom line.
Estimates previously have suggested that achieving the 17 SDGs and their 169 sub-targets could open up $12 trillion of market opportunities in food, agriculture, cities, energy and materials, and health and wellbeing, leading to millions of new jobs while future proofing the economy against escalating social and environmental risks. And the evidence that commercial benefits flow from delivering on the SDGs is not limited to forward-looking estimates. Earlier this month, a study of 13 major corporates found their SDG-aligned strategies already generated $233 billion in revenues in 2017 alone.
The incentives for embedding sustainability more deeply into business practices, it would seem, scarcely could be greater. So what's holding companies back?
On a surface level, at least, companies appear to be aware of the business benefits of the SDGs and are keen to take them seriously. A survey of more than 700 businesses carried out by professional services giant PwC and published last week found that almost three quarters — 72 percent — now mention the SDGs in their annual corporate or sustainability reports, marking a 10 percentage point uptick on last year. Welcome news, certainly, given it is just three years since the SDGs were launched in 2015.
Yet the survey also identified a major gap between companies' expressed intentions and their ability to turn their SDG-aligned strategies into concrete actions. Less than a third of companies disclosed meaningful key performance indicators linked to the SDGs, or mentioned SDGs as part of their business strategy, suggesting deeper integration of sustainability goals within wider business operations remains elusive.
Fortunately, however, support for companies keen to develop tangible SDG measures appears to be growing, with a new report released late last week joining the canon of work aimed at bridging that very gap between businesses SDG ambitions and actions. Published by global supply chain sustainability membership organization Sedex, the report is bolstered by numerous case studies and tools to help firms set measurable sustainability targets.
According to Elloise Neale, responsible sourcing product executive at Sedex and co-author of the report, the aim was to demystify the SDGs, which can at first appear overwhelmingly all-encompassing for many firms.
"In industry over the past year, everyone has been talking about the SDGs, but I think there has been a lack of breaking it down — setting out what the SDGs are and how to achieve them," she tells us. "There's obviously a real interest in these goals. They're applicable to businesses, individuals and governments, so we thought: 'Why don't we create a case-study best practice report that makes it more applicable at business level?'"
The resulting report is 68 pages long and covers every one of the 17 SDGs, setting out possible next steps for each SDG, backed by case studies from Sedex members which already have set down measurable actions and targets. After Friday's inaugural report, Sedex's aim is to release updates and new case studies on a quarterly basis in order to track progress and build the evidence case and support for companies working towards the SDGs. Boasting 50,000 members of all sizes operating throughout global supply chains, Sedex is able to tap into a raft of knowledge and experience, explains Neale.
The report shows how companies can link progress made towards the SDGs with audit reports and actions, as well as highlighting the context and challenges of each goal. So, for SDG 13 on Climate Action, the report first sets out clearly the dangers faced by the global economy from inaction, such as the estimated reduction in grain yields of about 5 percent for every degree of temperature rise. Then, it lists the potential actions Sedex members should consider taking, ranging from reducing water, waste, and emissions from internal operations, to continuously assessing climate risks and maximizing use of renewable energy.
Yet perhaps most valuable to report readers are the variety of best practice examples offered. For SDG 13, these include how Tesco went about setting set science-based targets to cut its 2015 emissions 35 percent by 2020, 60 percent by 2025 and 100 percent by 2050. And a page is also given over to explaining HSBC's efforts to support the growing green bonds market as part of its commitment to provide $100 billion of sustainable finance and investment by 2025. In both cases, the report links Tesco's and HSBC's efforts back to the SDGs, and how they are benefitting both their own business but also wider society.
Neale believes it is becoming more commonplace for companies to collaborate on sustainability issues rather than see each other as competitors alone, and that sharing best practice is the best way for companies to learn — and ultimately for the world as a whole to achieve the SDGs.
"Every business will have its own challenges and also goals they see as being more reachable, and I think being able to reach out to other businesses that are perhaps stronger in some areas is important," she says. "Increasingly, members are really happy to discuss, share and collaborate with each other in order to achieve the best possible outcome for everyone, which is really great to see."
"It can make businesses look inwards to what they are already doing, but that doesn't then mean your work has to stop — it's something you can build on," says Neale. "It enables a business to see where they already are in the process and then look inwards and take ownership of developing actions towards the SDGs. Ultimately, everything a business is doing can help work towards the goals, but at Sedex it is really about continuous improvement. You can always be doing something more."
Nevertheless, no matter the size of the company or supply chain, measuring a business strategy against all 17 SDGs is a challenging task. Alex Sykes, responsible sourcing innovation executive at Sedex and the other co-author of the report, suggests that while companies should have a "base level of work" across all of the SDGs, different industries and firms also can focus on one or two priority goals for action. But, he says, companies shouldn't feel daunted by the prospect.
"There's 17 SDGs, and businesses may not know where to start," he tells us. "We've tried to take these quite high level government targets and explain that they are not only very achievable, but that companies are probably already achieving them in their business strategies. For example, for Health and Wellbeing [SDG 3], just by supporting pregnant women and providing maternity leave, that's a way in which you're going about achieving that goal. So it's about us trying to take what is seen as quite complicated, especially for those which may not have heard about the SDGs or are quite small suppliers around the world, and being able to really simplify it. That's not something which has been done much before."
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