UN Sustainable Development Goals

THE OPPORTUNITY FOR BUSINESS TO CREATE

ECOLOGICAL BALANCE

 
 
Ban Ki-Moon

At the UN Global Compact Conference in June 2015, UN Secretary General Ban Ki-Moon said in his opening remarks to the General Assembly,

"Sustainable development is not charity but rather smart development. The role of business will be indispensible with the SDGs. Healthy societies go hand in hand with healthy markets."

Ban Ki-Moon, UN Secretary General

SUSTAINABLE DEVELOPMENT GOALS
The Facts

2015 marks the expiration of the United Nation’s Millennium Development Goals

Launched in 2000, the UN MDGs were eight broad goals with associated targets and deadlines that served as guidelines for member states in tackling poverty, health, education, hunger and the environment.

The SDGs expand on these themes with 17 new global development goals framed by the six essential elements of dignity, people, planet, prosperity, justice and partnership.

The Business of Development:
Leveraging the UN Sustainable Development Goals for Business Growth and Global Impact

On September 25th, the United Nations General Assembly will launch the UN Sustainable Development Goals (SDGs); 17 goals that will dictate the global development agenda through 2030.

The SDGs will replace the the Millennium Development Goals which aimed to create collaboration across the global community over the past 15 years and achieved significant milestones in reducing poverty, improving health conditions and raising awareness. The SDGs build on those goals and reach across six broad categories of cooperation, dignity, justice, people, planet, and prosperity, and include targets and indicators that are global, inclusive and scientifically grounded. While not legally binding or mandatory, the SDGs will undoubtedly inform investment plans, international jurisdictions, set national development budgets and drive sustainability activity. Perhaps the biggest difference between the two is the role of the private sector. While the MDGs were largely directed at governments, and thus often brushed off by the business community, the SDGs are deliberately designed for business and civil society to bear responsibility as well.

However, it’s important to acknowledge that not everyone thinks the SDGs are a great new step forward. There remains a substantial body of opinion suggesting the goals are unlikely to deliver. Politicians and CEOs alike have criticized the SDGs for being too lengthy, too complex and downright unrealistic. And with 17 goals, 169 targets and more than 300 provisional indicators, it’s an understandable criticism to make.

Yet despite the criticism, the SDGs are intended to provide the widest range of opportunities for governments, businesses, NGOs and institutions to focus on areas where they can make a positive difference. For the last four years, the UN has been undertaking the largest consultation program ever conducted by the organization. Informed by 11 thematic consultations, 83 national consultations, a door-to-door survey and a final online survey asking for prioritization of the goals, the SDGs aim to set a new and stronger agenda for the development community between 2015 and 2030. Central to this consultation has been the acknowledgement that in order to deliver on the goals financially over the next 15 years, an unprecedented approach to collaboration between NGOs, government and business must occur. While 17 goals is ambitious, this new global agenda for sustainable development aims to ensure a life of dignity within planetary boundaries for everyone.

For businesses it is not only about maximising material contribution, but also maximising value for all their stakeholders.

This creates an enormous opportunity for businesses to engage as a strong and positive influence on society and champion of our planet’s stability.

The UN has been clear that unlike the MDGs, the SDGs will require the full engagement and participation of businesses to make achieving these goals possible. For the last 15 years, businesses have shown their value in tackling global challenges through robust sustainability strategies and community investment programs and the global community has taken note. From investment in major infrastructure, protection of human rights and the planets ecosystem, improving opportunity, justice and prosperity, engaging and educating consumers – business is being seen as a collaborative partner in building a better world. This is a welcome shift in tone and approach towards business and one that makes sense in context of the estimates that US$5-7 trillion in annual investment will be required through to 2030 to achieve the 17 goals.

However, the SDGs and their most loyal advocates will have to find a way to truly harness the global power and reach of business to deliver the transformational change demanded by this new development agenda.

Fortune Favors
the Brave

The SDGs could prove to be a guidepost for companies that have strong ambitions and vision for their business and the value it creates for society. Yet, even the bravest businesses will have to proceed with caution. Though the value may be increasingly clear, the SDGs still lack the key principles needed for businesses to know how to contribute effectively and responsibly for the benefit of all.

Salterbaxter has devised a series of insights grouped by opportunities and risks for consideration and recommended actions for business leaders to use in ascertaining the SDG opportunity for their own business.

Considerations > Actions

  • A better
    business case
    Read more
  • Impact
    with value
    Read more
  • All about
    the money
    Read more
  • Transformative
    leaders needed
    Read more
  • Sync
    the strategy
    Read more
  • Report
    with purpose
    Read more
  • Communicate
    more
    meaningfully
    Read more
  • Look across the
    value chain
    Read more
  • Collaborate
    to innovate
    Read more

Considerations > Actions

Consideration

Given the financial investment needed to meet the goals, guilt is no longer part of the corporate narrative with regards to international development. In fact, companies are encouraged to find commercial value in addressing the goals. Savvy businesses will use the goals to not only assess risks and opportunities in current business operations and also highlight future needs that will drive new market opportunities. The SDGs can help businesses communicate to shareholders and analysts how the company is responding to global challenges and managing the risks and opportunities more clearly when exploring large-scale projects that will increase market share, consumer base and product growth.

Learning from the MDGs, the international community will be eager to track progress on the goals and will rely heavily on National action plans that use similar indicators and frameworks for measuring impact. The collection, reporting and analysis of data related to measurement frameworks will be key to demonstrating impact, but will also be a tremendous business opportunity for companies able to leverage the information they already have or innovate using big and open data. The SDGs are also likely to create a language around impact that will be adopted widely across various international actors. This creates an opportunity for businesses to not only demonstrate the value the company creates to national and international issues, but also how to communicate that value to stakeholders. This will be a tremendous communications opportunity for companies that get it right with compelling stories.

The economics of achieving the goals is probably the single most important thing to understand about the SDGs. It is the biggest risk, the biggest opportunity and the biggest point of contention for naysayers. A few things for businesses to know and consider when it comes to the financials:

  • The UN Financing for Development conference met in July 2015 to set out how to address the obstacles in the global economic system that will hinder the financial investment needed for the SDGs. Little change was made, despite the development of a UN Tax Committee, but criticism from civil society will likely drive change down the road.
  • Financing the SDGs does not (and should not) sit solely with big business – 80% of formal employment opportunities in developing countries are from SMEs and there is little argument against the importance of engaging the private sector on a local level to tackle local challenges. It is also a win-win as thriving local economies result in new customers, new suppliers and new employees for big business.

Leadership within the sustainability space has evolved significantly in the last five years, with vision and progress no longer enough to set a business apart. Today’s leaders are ones that create radical change and make bold commitments against a clear point of view. The SDGs will enable existing leaders to push the agenda further, but perhaps more interestingly, the SDGs could generate a new class of leadership. With 17 goals, there is something for everyone and CEOs have more range and relevance to flex their corporate muscle against an issue.

Actions

The SDGs arrive at a crucial point in the sustainability agenda, with many businesses looking to review their strategies and 2020 goals to ensure stronger correlation to global challenges and smarter targets based on science and planetary boundaries. This provides an opportunity for businesses to tie the SDGs to global and regional sustainability trends that demonstrate leadership and action. Identifying opportunities to link existing and new sustainability strategies to the global challenges outlined in the SDGs will enhance the business’ ability to reach sustainable growth. The SDG targets and indicators will also be good benchmarks for companies to use in developing their own metrics.

This is where the greatest opportunity and challenge lie. Last year, a UN report on the post-2015 agenda proposed that “in future – at latest by 2030 – all large businesses should be reporting on their environmental and social impact – or explain why if they are not doing so.” Now, with GRI, UN Global Compact and WBCSD already working together to create an implementation guide called Compass, businesses will need to consider how to incorporate the SDGs into their reporting activity alongside existing frameworks and methodologies without further complicating an increasingly arduous process. This means a more proactive approach to demonstrating where and how the business is delivering material impacts and the value of those set within the global challenges outlined by the SDGs. In fact, the SDGs should provide the context, relevancy and value that are often lacking in sustainability reports.

Communicating sustainability remains a tremendous challenge for even the most advanced companies, but it is also growing in importance. Today’s consumers, led largely by socially-minded millennials, are not only demanding business play an active role in addressing social and environmental challenges, but are also asking to be brought along. The arrival of the SDGs will only exacerbate the need to communicate better to an increasingly educated consumer base. There are a number of important things business can do with the SDGs:

  • Develop a plan with relevant internal teams on how to communicate complex international agendas like the SDGs and COP21 to your employees and why it is relevant to the business and them as individuals. Engaging employees from recruitment through retention, will ensure consistency, compliance and commitment at the sharp end of operational delivery and also open doors to innovation and creativity.
  • Companies operating in developing regions will find the SDGs imperative to demonstrating and articulating their license to operate with local government. A clear link between business activity and a National action plan for development will be more feasible when the language of the SDGs is incorporate and impact is matched to key indicators.

Multinational companies will want to understand whether their company operations across different geographies impede or align to each country’s strategic initiatives for the SDGs. In the last year, we have seen a number of country-based initiatives such as the US State Department’s Trafficking report and the UK’s Modern Day Slavery Act that specifically target blind spots in corporate supply chains. Companies will be expected to be compatible with government ambition on relevant goals so engaging with governments where the business operates will be critical. By engaging with the host governments where you have international trade dependencies and a significant operational footprint –there are ample opportunities with the various SDGs to play a significant role where investment and development of infrastructure, technology or social change are instrumental to your hosts needs and commitments.

Collaboration is a growing trend in sustainability and the SDGs will be no exception. Big impacts will require multiple layers to deliver so the SDGs will be a catalyst for innovative cross-sector, cross-issue and cross-geography collaborations. Successfully achieving the SDGs will require involve unique partnerships among governments, private sector and civil society that leverage respective strengths, assets and expertise all aimed to scale and reach. Seek partnerships that are built on need and focus on innovative approaches to the indicators as they will be the most impactful. These types of collaborations are already mobilizing (see UNSDN) and will be central to the success of the SDGs.

Bérangère Magarinos
Firmenich

Bérangère Magarinos-Ruchat
VP Sustainability Partnerships

“Since 2010 Firmenich has been involved in the Swiss Government consultations on the SDGs. In the SDGs preparatory process, we have observed an unprecedented involvement of the private sector in development agenda. Business increasingly plays a critical role in sustainable development through commitment, investments and innovation. Public-private partnerships or multi-stakeholders coalitions have always been core to Firmenich’s sustainability strategy. Beyond sustainability, we see the SDGs as a universal framework guiding our future social and environmental priorities. The 17 SDGs express the complexity and interconnection of global challenges. Articulated around the 5Ps (peace, prosperity, planet, people and partnerships) they should become a common goal for companies globally in partnership with many other stakeholders.”

Claus Stig Pedersen
Novozymes

Claus Stig Pedersen
Head of Corporate Sustainability

“The SDGs are a guidepost for us on where the world is going – a way to better understand the world needs, the solutions we must bring to address them, and how we can optimize our business to meet those needs. We believe that if we integrate these ideas into our business, our products we will be more successful and we will have a more positive impact on the world.

The SDGs will also inform a new mindset and language that will dominate in decades to come. Businesses need to improve how they communicate their role in society and the developing world and I think if we use SDG terms, we will be better understood by the world and our stakeholders. This 'language' will open new doors for partnerships that are key to business success and a more sustainable society."

Making the SDGs an action agenda for business

There may be a lot of them and some may seem lofty, but the 17 Sustainable Development Goals and their 169 targets are no pipe dream. They are a remarkable action plan for business, says Guido Schmidt-Traub.

Guido Schmidt-Traub

GUIDO SCHMIDT-TRAUB

Executive Director
United Nations Sustainable Development Solutions Network

In September 2015, the largest-ever gathering of heads of state adopted 17 Sustainable Development Goals (SDGs) and 169 targets that will apply to all countries. They are the outcome of an unprecedented global consultation process involving governments, civil society, and business.

These SDGs establish quantitative objectives through to 2030 to end extreme poverty, generate sustainable economic growth, ensure good health, promote quality education, ensure access to basic infrastructure, protect the environment, curb human-induced climate change, and promote gender equality and social inclusion. It would be easy to fault the SDGs for being too many in number – what company would set 169 targets? Easy, too, to say they are, at times, too ambitious or lofty.

But the world is complex, and it’s remarkable that 193 governments have agreed on a set of time-bound objectives of this kind. The world needs shared goals. We face major challenges that can only be addressed through enhanced cooperation across countries and key players.

So, it would be a grave mistake for companies to dismiss the Goals as a UN pipe dream. Used correctly, they can become a powerful tool for companies to become more successful.

Coordinated problem solving

At the Sustainable Development Solutions Network (SDSN) we have been studying some of the main challenges the goals address in great detail. While solutions are available to address each of these challenges, we’ve found that we need much more coordinated problem solving to deploy solutions at scale.

Think of the world as a large orchestra where governments, businesses, and civil society organisations play different instruments. Since there has been no common global score the players follow, the orchestra has lacked direction. The SDGs can be that score. As a widely shared set of objectives they mean our orchestra can be tighter and more harmonious.

Proof positive

The power of global goals has already been demonstrated by the Millennium Development Goals (MDGs). These have supported an unprecedented mobilisation of business and civil society, particularly in the fight against child mortality and infectious diseases. The SDGs can serve the same role and be useful for businesses in three main ways.

First, they provide a framework for developing immediate and long-term business strategies to support major transformations needed towards low-carbon energy, sustainable use of water and materials, sustainable agriculture, healthcare and education for all, and cities that are productive, resilient, and liveable.

Each of these transformations will require new technologies and new business models. Yet, the transformations are also highly complex and require long-term objectives with clear and predictable policy frameworks that make sure business has a level playing field. Widely shared SDGs will force the same discussions about energy policies, healthcare strategies, the use of modern technology in education, innovation for low-carbon transport, water-efficient agriculture and the circular economy, in country after country. Countries will explore how the goals can be achieved over the long term and how business can be empowered to provide the necessary financing, the technologies, and the service delivery.

Take the work of the Deep Decarbonization Pathway Project promoted by SDSN and IDDRI, for example. The project has mobilised teams from 16 of the major greenhouse gas-emitting countries to develop long-term national pathways to ensure that global temperatures do not rise beyond the internationally agreed limit of 2°C. For the first time in many countries these pathways spell out how energy systems can be redesigned using technologies that are available today. They are now being discussed in countries around the world and provide a framework for long-term business models in such areas as energy efficiency, low-carbon transport and renewable energy. This is not theory. It is real business that the Presidents of US and China have just committed their countries to.

Based on this work, the World Business Council for Sustainable Development, the International Energy Agency, and the SDSN have launched the Low-Carbon Technology Partnership initiative, which explores how businesses can promote the low-carbon technologies needed to stay within 2°C. These technologies provide another long-term business opportunity. The SDGs will support similar discussions in many other areas and provide fertile ground for innovative companies to take a lead.

Second, the SDGs provide a framework for engaging governments and other stakeholders. They also provide a universally agreed framework for that dialogue, helping all stakeholders focus on the same sets of issues. For example, several mining companies are successfully using the MDGs as a framework for stakeholder engagement. Pharmaceutical companies have used them to improve their relationship with civil society and governments on critical issues, such as access to essential medicine. The SDGs are broader and more universal, so virtually every company will find them useful as a basis for stakeholder engagement.

Third, the SDGs offer companies both an accountability framework and a powerful communication tool. As the recently released SDG Compass – developed by the UN Global Compact, GRI, and WBCSD – demonstrates, the SDGs can support business reporting and accountability. Companies can use them to train their staff on how their products and services contribute towards wider social objectives.

If successful the SDGs will make a major contribution towards sustainable development. Yet, success is far from guaranteed and will not happen without decisive leadership. Business must get involved now to overcome passivity, short-termism, and – even – outright cynicism. At the SDSN we are working to make the SDGs a success, and we invite companies to join us in that effort.

Summary

The UN Sustainable Development Goals look to be providing a unique opportunity at just the right time. With the mobilisation of citizens at the 2014 Climate Week rally in New York City, a landmark case on climate change in the Dutch courts, and the cooperation of international governments leading up to COP21, the SDGs arrive at a pinnacle moment for the sustainability agenda.

 

As a result, the business community faces a unique opportunity to explore, in collaboration with the rest of the global community, the potential for a problem-solving agenda to the world’s biggest challenges. At a time when corporate trust is at an all-time low, the new sustainable development agenda creates a crossroads for companies to step out in front and use business ingenuity and power to drive value creation and ultimately, sustainable growth. Because the truth is, we will all benefit from a better future.

Having a strategic approach is critical to capitalizing on the SDG opportunity and understanding how they can either fit within an existing strategy or inform a new one is a key first step. We believe some of the biggest sustainability stories of the next decade will have their roots in the response to the 2015 SDGs.

To find out more about Salterbaxter and how we can help you, contact


Samuel Griffin-Flynn
Sgriffin-flynn@salterbaxter.com

To learn more about the Sustainable Development Goals, visit:

About
Salterbaxter

SALTERBAXTER MSLGROUP is a leading sustainability and communications consultancy. We work where business strategy, sustainability and creative communications meet. Creating strategies and stories for some of the world’s leading businesses and brands.