SDGs and their Implication for Businesses
The rise of knowledge societies and the rapid technological advancements have inarguably contributed towards raising standards of living across the world. However, many view that the global challenges that we face today are a result of past achievements in science and technology. For example, some medical technologies have helped in decreasing mortality rates of humans compared to the last decade. While other technologies such as nuclear weapons have had negative effects on human and environmental health.
It is not a debate of whether the continued advancement of these technologies will lead to a better future or not but it is about realising how wisely technology can be used to solve the grand challenges of society.
Technology is an integral component of business. Almost all businesses that exist today are dependent on technology. Technologies and business have become inseparable to an extent that if we were to take away technology, virtually all business operations around the globe would come to a grinding halt leading to an economic collapse. The SDGs present a huge opportunity for business-led solutions and technologies to be developed and applied to address the world’s biggest sustainable development challenges.
SDGs and Business Relevance
Sustainable Development Goals (SDGs) were designed to pick up from where the MDGs left off. The list of 17 SDGs extend beyond the goals of MDGs and stress on everything from zero poverty, zero hunger, good health, quality education, gender equality, clean water and sanitation, affordable clean energy, to decent work and economic growth, innovation, reduced inequalities, sustainable cities, responsible consumption, climate action, unpolluted oceans and land and partnerships to achieve the goals.
One of key difference between the SDGs and the Millennium Development Goals (MDGs) is that businesses have been involved in developing the SDGs. Also unlike the MDGs, SDGs represent a common language that is more understood by the government, civil society and business. For example, Goal 8, Goal 9, Goal 12 and Goal 17 significantly acknowledge the role of business in achieving the global development agenda.
SDGs primarily emphasise the call for transformation in how societies interact with the planet and its ecosystems. Achieving such transformations heavily relies on action and collaboration from all actors such as governments, businesses and civil societies. Although the SDGs primarily target governments, the key role that businesses can play in achieving the global goals is undeniable. They must be seen as the channel for achieving all SDG goals that focus on key areas such as people, planet, prosperity, peace and partnerships.
Business Case for SDGs
The global goals represent universality and everyone has a role to play in delivering it. The business case for SDGs is based on the understanding that business and social values are inextricably linked. When business profits by solving social problems, it benefits society and business performance simultaneously while creating solutions that are scalable. For instance, businesses can play a role by innovating new technologies, products, services and business models such as developing clean energy, reducing emissions and waste, boosting the productivity of smallholder farmers, creating new market opportunities for MSMEs etc.
SDG awareness amongst business community is high (92%) compared to the general population (33% citizens aware of SDGs)
Source: PwC SDG Engagement Survey, 2015
Successful implementation of the SDGs will provide businesses with numerous practical advantages and business opportunities including:
• Tackling sustainable development challenges while reducing legal, reputational and other business risks. This improves trust among stakeholders and strengthens a company’s license to operate.
• Building resilience to costs or requirements imposed by future legislation.
• Lifting billions of people out of poverty, thereby growing consumer markets around the world.
• Strengthening education, thereby fostering more skilled and engaged employees.
• Ensuring that the global economy operates safely within the capacity of the planet to supply essential resources such as water, fertile soil, metals and minerals, thereby sustaining the natural resources that companies depend on for production.
• Creating more effective partnerships with governments, civil society organisations and other companies.
Tools for Businesses to help Implement the SDGs
There are multiple tools and resources that can assist businesses to gain the opportunities emerging out of SDGs. Below is a collation of most useful tools that can help businesses figure out how to put the SDGs into action.
This is a joint initiative between the UN Global Compact, Global Reporting Initiative and the World Business Council for Sustainable Development. The objective of the SDG Compass is to guide companies on how they can align their business strategies as well as measure and manage their contribution to the SDGs. It contains a self-assessment guide with five steps that can assist companies in maximising their contribution to the SDGs.
SDG Industry Matrix
The SDG Industry Matrix is a joint initiative between UN Global Compact and KPMG. The project will highlight industry-specific examples and ideas for corporate action that are related to each of the SDGs and the findings will be presented through a series of reports.
Business for 2030
A U.S. Council for International Business initiative that showcases examples of how business can contribute to sustainable development. Very similar to the SDG Industry Matrix, the site follows a three tired approach that showcases previous and continuing business contributions to sustainable development through the prism of the SDGs.
The Poverty Footprint
This is a collaboration between the U.N. Global Compact and the international advocacy group Oxfam to understand the corporate impacts on multi-dimensional poverty. It is a research partnership that provides an impact assessment of how a company and its value chain are functioning to alleviate poverty.
The Business Call to Action (BCtA)
BCtA is a unique multilateral alliance between UNDP and key donor governments. The global initiative aims to accelerate the progress towards the Sustainable Development Goals (SDGs) by challenging companies to develop inclusive business models that offer the potential for both commercial success and development impact.
Business Charter for Sustainable Development
This is a project by the International Chamber of Commerce which includes practical tools for all business sectors and geographies to shape their sustainability strategies and contribute towards the implementation of SDGs.
Key Challenges towards Implementing SDGs
While there is much for businesses to gain from the implementation of SDGs, there are still challenges in putting the global goals into action. Some key challenges have been identified below:
• Although every business knows its activities and consequences, there is still a lack of clarity in how to measure and monitor actions linked to SDGs.
• New technologies, products, services or business models, very often face constraints within the wider ecosystem that are beyond the control of any single business.
• Many metrics used by the UN and the development community are not in line with what companies measure. A consistent set of key performance indicators is required for measuring development impacts.
• Identifying the few high-priority issues which the business will address.
• There are also structural challenges involved in determining a company’s attribution when many partners are involved.■