September 2015, the United Nations announced a resolution which contains a set of Goals to end poverty, protect the planet and ensure prosperity for everyone. These 17 Goals, comprising of 169 targets to be achieved over the next 15 years, are known as The Global Goals or Sustainable Development Goals (SDGs) and form part of the 2030 Agenda for Sustainable Development.
Expectations from the Private Sector
The 17 SDGs are acting as a successor to the 8 Millennium Development Goals but in comparison to these, the private sector is called on to have a significant role in advancing and meeting the new goals. The private sector is now more than ever requested to be an essential partner and is given the opportunity to act as a central player in developing and delivering solutions such as providing capital, jobs, technology and infrastructure while at the same time pursuing their activities in a responsible and sustainable manner.
The engagement with the SDGs is an opportunity for companies to further take social responsibility and accountability for their activities. Although the business sector is given a significant role in achieving the SDGs, the value chain is not specifically addressed within the 17 goals. The first thing many businesses realize when they step up to examine their role in contributing to SDGs, is the fact that typically 50% to 70% of their turnover is spent in their supply chain: That is where most of the impacts – and related improvements – are. It is essential for companies to pursue the goals along their complex and global supply chain by engaging and assessing suppliers as well as conducting due diligence, especially in countries where human rights or environmental violations are of greater concern.
Identifying and Integrating SDGs
Not all the 17 goals are equally relevant for companies. Aspects such a geographic location, company size and business activity play an important role in identifying material SDGs which are meaningful for people and planet. A stakeholder inclusive process involves the engagement with local communities, NGOs, employees and other stakeholders. This process, in combination with a Materiality Analysis, are important steps towards identifying which Goals are relevant for a specific company. The company goals then need to be aligned with the SDGs. However, conducting materiality analysis should not only be based on business relevance, the inclusion of stakeholders affected by the company’s operations and supply chain, such as vulnerable groups, has to be included to better support the SDGs and raise standards in global supply chains. For some companies, it might be favourable to concentrate on fewer goals and address them holistically, rather than work towards several or all goals and only scratch their surface without meaningful and lasting impact. Various resources and tools are available to assist companies in advancing SDGs. Sector-specific case studies as well as guidance on impact assessment, setting goals, integration, reporting and communication with stakeholders can help companies align their strategies to the realization of the goals (e.g. SDG Industry Matrix or the SDG Compass).
Challenges and opportunities
Some companies might not yet have realized their role and importance in advancing the Sustainable Development Goals. Partnerships and collaborations with peers, governments or civil society organisations can help to translate SDGs into actions by businesses and provide them with the necessary help on how they can contribute.
Another challenge for businesses when working towards sustainability and the implementation of the Global Goals is to go beyond community involvement and sponsoring and integrate SDGs into their core operations. The 17 SDGs need to be actively and critically looked into and existing strategies, targets and measures should be aligned with the SDGs. The review of current Corporate Social Responsibility (CSR) activities can help to identify whether all relevant aspects of the SDGs are covered or if the goals can be supported more effectively.
Last month, during the conference hosted by the Climate Club, participants from Global Compact, EcoAct, Veolia, Gold Standard, amongst others, discussed on how integrating SDGs in their business activities is value-added. It is estimated that $5 billion would be needed annually to reach the SDGs. Given that current Official Development Assistance represents less than 3% of this amount, it is clear that the private sector has a very important role to play, if only on this issue. There is a real lever to activate.
SDGs set the agenda for tomorrow’s economic opportunities for companies. They make it possible to “re-internalize” the negative externalities of companies, to reduce them and to valorize them. This global view should not, however, mask the fact that this transition involves winners and losers. Companies who align their strategies and manage their contribution towards the Global Goals will be creating meaningful partnerships and lasting solutions for people, planet and prosperity.
Authors: Svenja Schoe and Nicolas De Miguel
CSR Analysts at EcoVadis