It is time for business to stop paying lip service to the UN Sustainable Development Goals (SDGs). That is certainly the view of Louise Scott, director of PwC’s Sustainability and Climate Change team and co-author of the recent SDG Reporting Challenge report.
Take a favourite SDG for most UK firms, No. 13 on Climate Action. Due to regulatory obligations around emissions it is a “relatively simple goal to respond to,” she says. But this way of thinking is hardly in the spirit of the SDGs. Nor is it, ultimately, in the interests of business.
In fact, companies can use the SDGs to align priorities, set ambitious goals to achieve positive growth and brand loyalty. After all, achieving the SDGs has been pinned at a $12 trillion opportunity, creating 380 million jobs.
But according to KPMG, just a handful of big firms understand the opportunity, with the mere few “recognizing the SDGs as a powerful catalyst for the innovation, partnerships and market transformations that build businesses,” according to Adrian King, the firm’s global lead for sustainability reporting and assurance.
However, there is some progress to report. PwC found that some 83% of UK firms and 62% of global businesses now mention the SDGs in their sustainability reporting.
Behind the 17 Global Goals are 169 targets – and the report stresses that explicitly making the connection between the two is vital. Without this clarity, it could negatively impact on effective reporting, making it difficult for stakeholders to get on board.
So, what to align on? This isn’t so simple to answer, as there is misalignment amongst citizens and businesses in the UK and globally, the report finds.
In the UK, for example, the top three business goals are decent work and economic growth, gender equality, and climate action, while the public appears to be more interested in zero hunger, health and well being and ending poverty.
So how are businesses supposed to prioritize relevant goals while also reflecting stakeholder engagement? PwC suggests firms identifying their place in the world, how they contribute to society and acknowledging the current negative impacts they are making.
The SDG Compass – launched in 2015 – is a useful tool. It can help firms to align their strategies with the relevant goals and help them measure and manage this. And it has recently been updated to map the GRI Standards against the SDGs.
Setting corporate targets around the SDGs, getting them externally verified and reporting on them will soon become the norm, says Thomas Vellacott, CEO of WWF Switzerland. A recent report by Gold Standard suggests a focus on materiality to help assess the impact, risks and opportunities around the SDGs for organization and its stakeholders.
So how are businesses aligning with SDGs in the real world? The PwC report offers some great examples. Take Anglo American, for example. It has long run an extensive health programme for its 73,000 employees and their families in “high HIV-burden countries,” aligning with SDG No. 3. The reduced absenteeism and deaths or sickness amongst employees, as well as improved morale, is good for business. The continuing ability for employees to support their families benefits the wider community.
Or how about making old industrial facilities more efficient and sustainable (SDG No. 9)? Ford planted a ten-acre living roof on its River Rouge Plant, Michigan in the US, a decade ago. The roof naturally filters rainwater and controls temperature, cuts energy costs by 5%, requires less maintenance and of course provides a natural habitat for wildlife among other benefits.
To tackle Climate Action (SDG No. 13), UK brewery Adnams produced the first carbon neutral beer, East Green. The brewery boasts an energy recovery system that recycles the steam to heat 90% of the following brew. The barley is locally sourced from the county – helping to fund local employment and cut transport emissions and costs – and the Boadicea hops used are naturally aphid-resistant, cutting pesticides to boost biodiversity.
As King points out, investors, governments and other stakeholders are increasingly interested in how business can contribute to the SDGs – so aligning with and communicating the SDGs could be the ultimate business driver that just so happens to tackle some of the world’s biggest challenges.