The Sustainable Development Goals (SDGs) are “the greatest growth opportunity in a generation.” Paul Polman, CEO, Unilever
What are the Sustainable Development Goals?
The SDGs are 17 social, environmental and economic goals that frame the global agenda for sustainable development between now and 2030. Their focus is broader than the preceding Millennium Development Goals (MDGs) that concentrated on poverty reduction and unlike the MDGs, it is now recognised that business must play a pivotal role in their achievement.
The Opportunity for Business
Businesses can benefit from embracing the SDGs and embedding them in their growth strategies. Last summer, I conducted in-depth research into businesses’ adoption of the SDGs as part of an MSc research project with Imperial College and B Lab UK, which certifies “B Corporations”: that is, companies that have undergone a rigorous impact assessment to be recognised as achieving the highest standards of social and environmental performance, transparency and accountability. My research showed that companies with SDG-specific plans and targets say that embracing the goals has given employees more direction towards defining the purpose of the company. Employees also report that it is hugely liberating and motivating to be working towards solving a problem. Also, when leaders involve all levels of the organisation in decision-making they can create an enhanced level of trust and unity amongst employees. Attracting purpose-driven talent and appealing to socially-conscious consumers who are a growing customer segment were two other drivers cited in the research.
The United Nations estimates the annual costs to meet the SDGs globally to be between $5-7 trillion. Actual funding is estimated to fall short of that, leaving an annual funding gap of $2.5 trillion. It is up to private investors and asset managers to fill this funding gap. Progress has been made, with them being adopted as a new language that investors, corporates, policy-makers and others can use to communicate about and report on impact. A recent study by ShareAction found that 95% of institutional investors plan to engage with investee companies about SDG issues, and many of the impact investors interviewed as part of my research are starting to develop thematic and impact investment strategies that align their portfolio with the Sustainable Development Goals.
However, there is still considerable progress to be made in breaking down the goals into meaningful metrics for companies and investors to use, that are underpinned by measurable data. Finally, it’s important not to forget the basic moral motivation behind adopting the SDGs as part of your business strategy: 93% of respondents in my research felt strongly that businesses have a responsibility to contribute to the SDGs given their dominant position in global society.
SDGs: The State of Play
Is the business community ready to take on this responsibility - and do they know how best to contribute? Recent surveys by PwC, Ethical Corporation and B Lab have all found that there is a significant gap between business sentiments towards the goals, how they plan to contribute to them in the future and what they are currently doing. For example, the results below are taken from a survey of B Corporations. They show that even companies at the vanguard of the “business for good” movement are still some way off grasping the full potential of integrating the SDGs into their growth strategies.
How to Put the Goals into Practice
In-depth interviews with companies who have already developed plans or targets on how to contribute to the SDGs revealed three main ways to engage:
#1 Using the SDGs as a lens through which to view your business’s current environmental or social impact priorities and checking that these are consistent with the global priority areas of focus laid out in the SDG framework.
Example: GOODBRAND, a social innovation company, mapped their existing and past projects to the SDG targets, having recognised how SDGs make it easier to communicate the impact that has been realised to investors, partners and customers.
#2 Mapping their value chain to identify areas with high likelihood of either negative or positive impacts on the issues that the SDGs represent.
Example: Philips, the multinational electronics, lighting and healthcare company, decided the three goals they can have the biggest impact on are Goal 3, ‘to ensure healthy lives and promote wellbeing at all ages’; Goal 7, ‘to ensure access to affordable, reliable, sustainable and modern energy for all’ and Goal 12, ‘to ensure sustainable consumption and production patterns’. They have set targets publicly and will report progress in their annual report.
#3 Using the SDGs as a means for collaborating with partners to solve common problems on a shared value basis.
Example: Forster Communications, a social change PR agency, used a specific SDG target related to modern slavery to bring clients together at a roundtable event. The event positioned them as a thought leader and enabled the co-creation of scalable and cross-sector solutions.
Read our recent report on ‘The Value of Corporate Purpose: A Guide for CEOs and Entrepreneurs’ (May 2017, Generation Foundation & KKS Advisors) here.
Read the full article in Purpose Issue 3: How to launch your Purpose here