Why UN’s 17 Sustainable Development Goals (SDGs) Matter for Your Company
On 25 September 2015, UN’s 193 Member States gathered in New York City and signed the historic 2030 Agenda for Sustainable Development encompassing 17 Sustainable Development Goals (SDGs). An organizing framework for the period 2015–2030, the SDGs are the result of decades of national and international scientific and policy work. At its core is a vision to reset the direction of our world’s economy so that our progress is responsible, sustainable and leaves no one behind.
17 UN SDGs | Source: https://unsdg.un.org
Why — a short history:
The state of our current economy has been heavily influenced by the period after WWII when national and international economic policies focused on driving rapid economic recovery. Environmental problems at the international scale soon materialized throughout the following decades, but at the time were blamed on rapid population growth and mainly seen as a developing countries’ problem. Since then, living standards of many societies have risen but these prosperities have neither been inclusive socially nor shared equally. Today we are facing a range of complex and intensifying global challenges including three major environmental crises:
1) Human-induced climate change;
2) Destruction of biological diversity and weakening of ecosystem, and;
3) Pollution of air and water, and an ocean filled with litter and micro-plastics
For businesses, there are stakes and opportunities:
The SDGs are a recognition of global challenges which limit business growth. Organizations that have been tackling environmental, social and economic issues understand these are multifaceted challenges requiring long-term investments and broad collaborations with peers, governments, nonprofit organizations, civil society, customers and society at large.
Where lies your organisation’s strength? Turn challenges into opportunities for success.
Nevertheless, businesses that take on these challenges and have a sustainable business model related to SDGs will have a lot to gain:
1) Drive growth
Healthier, more resilient communities offer greater opportunities for all companies — whether this is having more reliable access to resources needed to produce goods or a more educated, skilled population to strengthen the workforce.
In addition to SGD Nos. 7, 9 and 11 that cover direct economic opportunities (e.g. clean energy and innovation), other SDGs could help organisations open new markets, reducing business risks and attract top talents.
“…when beverage companies invest in improved watersheds by working to replenish the aquifer water they use, thereby also committing to provide access to clean water to people in those water-stressed regions, their strategy aligns with SDG №6 — Clean Water and Sanitation. While providing water supplies to sustain their bottling franchises near those watersheds, they are also investing in their social license to operate and thus strengthen their brands in these communities.” (EY, 2017)
The Business & Sustainable Development Commission’s 2017 report forecasts SDGs could enable US$12 trillion in business opportunities by 2030. It identifies 60 biggest market opportunities across four key sectors (energy, cities, food and agriculture, and health and well-being). The report further estimates that as the result of aligning business strategy to the SDGs across these four sectors, around 380 million new jobs will be created in the next 10–15 years.
2) Attract investment opportunities
The SDGs provide strategic targets for redirecting global public and private funds towards the challenges they represent. At the same time, with shifting social expectations and growing public scrutiny of unethical business conduct across diverse industries such as technology and banking, investors are becoming more concerned about long term business risk profiles and curious about the opportunities that sustainable businesses present:
EY: reports an expectation to see a redirection of investment flows (both public and private) toward the global developmental challenges framed around the SDGs;
The UN: estimates tackling SDGs will require investments of ~US$3.3 to US$4.5 trillion per year;
European Commission’s Green Deal is a framework of legislation and regulation that “covers all sectors of the economy” to support the United Nation’s 2030 Agenda and the sustainable development goal. The €1 trillion investment deal sets clear targets for its member states including achieving net-zero emissions by 2050;
World Bank: has committed US$23.5 billion (115 projects) to help developing countries find solutions to SDG-aligned challenges. A further €163 million were given to support the financing of SDG aligned projects;
The Dutch financial sector: 18 financial institutions (EUR2900 billion in assets) are collaborating to invest in the SDGs, and;
PwC: reports that 78 percent of customers are more likely to buy the goods and services of companies that had signed up to the SDGs
3) Address risks
Each SDG is a risk area that is already challenging businesses and societies today.
The current Covid-19 pandemic has exposed the vulnerabilities of our global and national supply chains, healthcare systems and economies (SDGs Nos. 3, 8 and 12). Broad downstream impacts are expected to last for decades including Poverty (SDG No. 1), Hunger (SDG No. 2) and Inequality (SDG No. 10) with the poorest expected to feel the most pain in both industrialized and developing countries. Addressing these issues and other risks will not only be critical from an ethical, humanitarian perspective but also can make good business sense. Companies that respond to stakeholder needs in these areas may not only secure their social license to operate but also open new markets and long term opportunities.
Let SDGs help you unlock long term, resilient competitor advantage
The SDGs provide a historic chance for companies to turn society’s challenges into opportunities that can boost business growth and long-term competitiveness. It provides organisations with a common framework of vision and language to serve genuine societal needs, and by doing so, engage in business activities and make impacts that could unlock longer term, more resilient value for all.
How does responsible innovation help reach your SDGs?
While SDGs provide you with sustainability targets, responsible innovation provides businesses with practical tools that help you work towards these goals by strengthening your innovation process, systems and culture. Developed by RI experts from around the world, these tools are diverse and include, for example, responsible innovation KPIs (CSR KPIs incorporated), capacity building programmes (e.g. improve your fast decision making process via “STIR”) and RI Roadmaps (practical RI milestones designed to boost your innovation targets). RI tools is about informed, holistic decision making whereby commercial success and societal improvements go hand-in-hand. This balance, I believe, is increasingly imperative should you wish to succeed in a globalising market where public knowledge, expectations and power are ever awakening.
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Questions: 1) What are your thoughts on the 17 SDGs? 2) If you are using SDGs in your organisation, what has your experience been like? 3) If not, what is stopping you?
