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
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.
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.
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.
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:
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.
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:
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.
“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.”
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.