A Guest Blog by Sophie Lawrence (Previous MSc Business and Environment, Imperial)
What are the United Nations Sustainable Development Goals (SDGs)?
The SDGs are 17 social, economic and environmental goals, designed to be universally applicable and which set the agenda for sustainable development between now and 2030. Their focus is much broader than the preceding Millennium Development Goals (MDGs) that purely focused on poverty reduction.
Also unlike the MDGs, there is a clear expectation that the private sector should play a key role in their achievement. This is not surprising given its growing influence in global society – now accounting for 90% of the world’s jobs and the majority of global GDP. But it raises the question: are businesses aware of this responsibility? And are they ready to contribute to them? My MSc research set out to answer these questions.
My study focused on B Corporations: companies certified for being for-profit, mission-led companies that have to meet rigorous standards of social and environmental performance, accountability and transparency. A survey to their members found that only 36% of companies had developed plans or targets on how to contribute to the SDGs. This broadly mirrored results in similar surveys conducted by PwC (Make it your business: Engaging with the Sustainable Development Goals) and Ethical Corporation (State of Responsible Business Report 2016). However, an overwhelming 93% did feel that business had a responsibility to contribute to the goals and 60% of companies were planning to incorporate the goals into strategy by 2020. This suggested that companies had not addressed them yet due to other priorities, or were unsure of where to start in selecting goals to focus on.
What are the motivations for business to contribute to the SDGs?
In-depth interviews with B Corps who had started to develop plans or targets revealed their motivations. They broadly fitted into the categories shown in the diagram below.
How are businesses progressing from awareness to action?
The interviews found that most companies were using the SDGs as a lens through which to view their sustainability strategy – mapping their existing sustainability priorities to the SDG framework. Some companies were then checking that their current focus areas broadly mirrored the priority global development challenges represented in the SDGs.
Some businesses had conducted materiality assessments to identify which goals were most aligned to their core business operations and most material to their stakeholders. This involved ‘deep dive’ discussions with stakeholders to identify their priority sustainability issues. Mapping this against sustainability issues identified as most material to the core business operations revealed which goals to focus on.
This process was criticised by some, for leaving the door open for firms to exploit it – focusing on SDGs that impacted the bottom line, and ignoring others where they had a material impact on the environment or society. For example, Oil and Gas companies have been focusing on their contribution to education (SDG 4) and healthcare (SDG 3) in the areas they operate, when undoubtedly the most significant impact they could have would be on the ‘Climate action’ goal, through reducing their emissions.
Companies were also using the SDGs as a tool to identify collaborations with unique partners to solve common problems, on a shared-value basis. An example of this was a company hosting a round table with competitors on how to tackle issues around modern slavery, positioning itself as an industry leader whilst also developing scalable solutions to tackling the issue. This is where communities such as the B Corporation movement can add value to progressing business involvement with the SDGs, through facilitating co-creation of solutions amongst member companies.
Some big challenges and questions that I think we need to keep in mind:
- How to ensure ALL 17 goals are given attention? Research has revealed that a few goals are being focused on disproportionately by business. The majority of focus is on the following goals: Good health and well-being (3), Decent work and economic growth (8) and Responsible consumption and production (12), with Life on land (15), Clean water and Sanitation (6) and Life below water (14) being neglected.
- Ensuring businesses have the right support available. Supporting companies in identify “sweet spot” scenarios where there is a business case for their contribution.
- Setting a clear UK strategy for how the SDGs will be achieved. Setting clear expectations for business, and dividing responsibility in an appropriate and balanced way between stakeholders.
- How to best measure contribution towards SDGs. A global indicator set was launched in March 2016 but this needs to be supplemented by national indicators and there needs to be some consistency to allow for benchmarking.
Reasons to be hopeful:
- Network approach to prioritising goals. Preliminary analysis of the goals has identified how they (and their underlying targets) interact to form a network. Responsible production and consumption (SDG 12) was found to have the most leverage on others and Life below water (SDG 14), the least. This could be one way to focus the efforts of business, putting incentives in place to find solutions to priority goals.
- There is strong evidence for companies finding the “sweet spot”. Research has shown how some companies have found innovative ways to balance priorities, generating profit whilst also contributing to the SDGs.
- Impact investors are focused on the SDGs. They are already thinking about how company’s contributions to the SDGs can be built into their selection criteria.
- There are a wealth of resources/tools to help with selection. Two of the best are the SDG Compass and the SDG Business Hub .
The goals are ambitious, but if taken seriously by all stakeholders they provide us with an opportunity to develop in a way that does not lead to further environmental degradation or widening social inequality. There are clearly some big steps to still be navigated before business can focus on the social or environmental value they create on a par with their financial one, but this doesn’t mean that business should shy away from contributing to the goals. If business is creative about how they approach them, I think they offer endless opportunities for long-term sustainable growth, and the ingenuity and resourcefulness of business is pivotal to their achievement.
“A massive prize awaits business if it successfully ushers in an era of shared prosperity and increased sustainability. Governments and international organisations alone cannot build the future we need. Business is the key to accelerating the transition.” Lord Mark Malloch-Brown, Chair for the Business and Sustainable Development Commission
Now is the time for business to experiment with their response, and let their voice be heard about the role they want to play.
Sophie is currently exploring how to offer further support to businesses and would love to hear from you if you are thinking about incorporating the goals into your firm’s strategy. Please get in touch on email@example.com.