Continuing on the Sustainable Development Goals, Katharine Earley writes in The Guardian about two recent surveys that show how businesses are not doing enough for the SDGs.
More than half of all businesses ignore UN’s sustainable development goals
Businesses are failing to work on the UN’s sustainable development goals (SDGs), according to two new surveys, despite being billed as having a key role to play in achieving the ambitious goals.
With an estimated investment gap of at least $3tn annually across the SDGs for the next 15 years, private sector involvement is critical if countries are to succeed. Yet fewer than half of global companies plan to engage with the goals, according to Ethical Corporation’s State of Responsible Business 2016 report, which surveyed 2,045 sustainability professionals globally (36% of whom worked for a company or a brand).
Meanwhile, a study from sustainability consultancy Corporate Citizenship found the lack of tangible business action on the SDGs is causing a trust problem among consumers, particularly so-called millennials. Findings showed that despite 81% of millennials believing business has a key role to play in achieving the SDGs, the majority of businesses are not yet acting.
This is not surprising, says Lord Mark Malloch-Brown, chairman of the Business and Sustainable Development Commission (a not-for-profit organisation focusing on sustainable business), and former deputy UN secretary-general.
“[Sustainable business] is a movement that’s still gathering momentum and authority,” he says. “There’s also a realm of difference [between] those who are trying to make sustainability part of their core business strategy and those who still see it as an ‘add-on’.”
US engagement low
Regionally, respondents in Africa, Latin America and the Middle East are engaging most with the goals, according to Ethical Corporation’s research, with the lowest level of engagement (37%) in North America.
US-headquartered businesses are sometimes slower than their counterparts in Europe to embrace UN-sponsored initiatives, says Aron Cramer, CEO of sustainability consultancy BSR, adding they “have a cultural preference to do first and talk later”. “That said, we see a great many [US] companies, such as Microsoft and others, embracing the goals and working towards integrating them into their business strategies.”
Developed regions are focusing primarily on climate action (SDG 13), the report finds, while developing regions are prioritising pressing development challenges. SDG four, quality education, came out top in Africa, for example.
Climate action was also the most supported goal among corporate and brand respondents (63%), followed by SDG eight, decent work and economic growth (52%), and SDG 12, responsible consumption and production (51%), which was particularly popular among apparel, fast-moving consumer goods and manufacturing companies. SDG one, no poverty, and SDG two, no hunger, were among the least supported goals, scoring 22% and 20% respectively.
Integrating the SDGs into business
Although it’s too early for practical, widespread business action on the SDGs, companies are doing the groundwork to integrate the goals into their sustainability strategies, according to Malloch-Brown.
Building on a sound, established approach to human rights and environmental issues is vital, says Ole Lund Hansen, chief of leadership programmes at the UN Global Compact, before companies determine where their activities have an impact on people, economies or the environment, and prioritise specific goals.
From there, businesses need to consider which SDGs reflect their own purpose, review existing sustainable development work in the bigger picture context of the goals, and identify where they stand to make the most difference, says Cramer.
Hansen says companies should incentivise every employee to achieve SDG-related targets, including through performance reviews.
A report by risk management firm DNV GL highlights 17 companies (including Unilever, Siemens, Marks & Spencer and Danone) taking action on specific SDGs, and concludes that businesses of this kind are ready to take “extraordinary action” to help achieve the goals.
The report says these firms are characterised by their ability to see the potential of combining growth and sustainability, form collaborations, use technology to achieve scale and reach, and see the SDGs as a way to achieve competitive advantage.
The business it highlights for SDG 10 (reduced inequalities), Kenyan telecommunications giant Safaricom, created the mobile money platform M-Pesa, which is now used by more than 25m people in Africa, Asia and Europe.
It allows people who struggle to access traditional financial services to send and receive money via their mobile phones, and has provided a springboard for further innovations in renewable energy, healthcare, food and agriculture. For example, off-grid solar company M-Kopa Solar is now providing solar energy to 400,000 customers in east Africa, who pay for the service using M-Pesa.
The carrot and the stick
Above all, the SDGs must become central to core business goals and investment decisions, according to Unilever CEO Paul Polman, who believes that the SDGs offer the “greatest economic opportunity of a lifetime”. He says Unilever’s “sustainable living” brands (which it defines as those that have integrated sustainability into their purpose and products) are growing 30% faster than the rest of the company.
Businesses can expect more laws incentives and deterrents on development-critical issues, says Malcolm Preston, global sustainability leader at PwC. Catalysing further progress on the goals will require a more balanced approach to regulations on investment, particularly renewable energy investments v fossil fuel subsidies, says Malloch-Brown. Policy-makers could also consider making corporate contributions to sustainable development mandatory, says Ashoka’s Archana Sinha. India, for example, has obliged major organisations to donate at least 2% of their net annual profit to charity.
“Governments need to put their noses under the hood and understand the type of regulatory environment businesses require,” Malloch-Brown concludes. “If you’re going to let them in [to the field of development] because you need the finance, you can only let them through if they’re not going to be rapacious market-makers, if they’re going to invest in long-term business models.”