Working towards the SDGs: What can companies do?
The High Level Political Forum on Sustainable Development (HLPF) met this past July to review progress towards the Sustainable Development Goals (SDGs). This was the third time the HLPF met since 193 world leaders endorsed the SDGs in September 2015. The SDGs are a series of 17 goals and 169 targets constituting an ambitious universal agenda to eradicate poverty and hunger, reduce inequality, and move the world to a sustainable path that protects our planet.
The theme of this year’s HLPF meeting was “Transformation towards sustainable and resilient societies” and focused the discussion on several goals, including Goal 17 on aiming to “Strengthen the means of implementation and revitalize the global partnership for sustainable development.” Global partnerships and solidarity are foundational to the attainment of the SDGs, whose formulation drew on nearly three years of deliberation among member states in consultation with international organizations, civil society, private sector, and citizens at large. In that process, the UN Global Compact ensured that the private sector had opportunities to contribute to the SDGs and to highlight the importance of corporate responsibility in advancing sustainable development.
“We acknowledge the role of the diverse private sector, ranging from micro-enterprises to cooperatives to multinationals, and that of civil society organizations and philanthropic organizations in the implementation of the new Agenda.”
In fact, in the UN Declaration “Transforming Our World” entailing the SDGs, the international community emphasizes the important role of multi-stakeholder partnerships by stating, “We acknowledge the role of the diverse private sector, ranging from micro-enterprises to cooperatives to multinationals, and that of civil society organizations and philanthropic organizations in the implementation of the new Agenda.” So, businesses have been given a central role in achieving these goals.
Why should businesses care about sustainable development?
There are both demand and supply reasons for this. On the demand side, one could look at the SDGs as the world’s KPIs (key performance indicators). As such, the vastness and complexity of the sustainable development agenda cannot be solely achieved by governments and will necessitate other sources of funding. According to UN estimates, it will cost around US$5-7 trillion to achieve these goals by 2030. While state action is key, the SDGs cannot be achieved without the contribution of the corporate sector.
On the supply side, over the last years, there has been increasing evidence that sustainable practices, from production to consumption, not only benefit people and the planet but can have huge financial gains for companies. According to the Business and Sustainable Development Commission, achieving the SDGs can create US$12 trillion of market opportunities in food and agriculture, cities, energy and material, and health and wellbeing. In addition to financial and efficiency gains, incorporating sustainability into their business models will enhance companies’ reputations as they innovate and pursue aims that advance social impact.
In sum, the engagement of the private sector in the implementation of the SDGs can both advance business interests and enhance social impact.
So, how can companies align their strategies with the SDGs?
At Strat!gos, we advise companies to look at alignment as a Change Agenda with a three-step process:
Identify key SDGs for your company - Not all of the 17 SDGs and their related targets apply to every company. As such, the first part of an alignment strategy requires a deeper understanding of the Goals and how they relate to a business. For example, Goals 6, 13 and 14 might be more directly relevant to the daily operations of an agricultural firm while Goals 8, 9 and 12 might be the focus of a multi-national corporation with supply chains across different countries.
Set clear and quantifiable targets - Each SDG has on average 10 targets. Not every one of those targets is clear or quantifiable; however, in sum, they offer a blueprint that can help companies in setting their own specific targets that align their strategy with the SDGs. For instance, Target 12.5 vaguely recommends to “substantially reduce waste generation through prevention, reduction, recycling and reuse.” We recommend to make such targets much more specific to the reality of the company by suggesting specific metrics - such as “reduce by 30%” - that can aid businesses in holding themselves to account for the KPIs that they set to achieve.
Create an action plan to monitor and measure progress - These sustainability-inducing KPIs can serve as a means of monitoring and measuring progress. Annual company reports offer a venue for demonstrating the accomplished progress as well as remaining challenges in aligning the business strategy with the SDGs. In addition, other venues – such as the UN Global Compact site – and new mechanisms – such as the Global Monitoring Initiative – highlight best corporate sustainability practices in a system of naming and praising, which indicates to increasingly socially and environmentally responsible customers which businesses genuinely pursue the implementation of the SDGs in their operations.
Many companies have started aligning their business strategies with the SDGs. We at Strat!gos believe in harnessing the power of business to “shift the world onto a sustainable and resilient path.” Join us on this journey!
Elham has worked in a dozen countries focusing on sustainable development from the perspective of an academic/researcher and as a former practitioner at the UN, World Bank and some leading NGOs. She can be reached at @elhamsay and elham.se.