By Terry F. Yosie
Leading global companies are looking for synergies between their goal setting and reporting, and the UN Sustainable Development Goals (SDG) framework. What have they learned? What work remains to be done?
Since the SDGs were established in September 2015 by 193 countries, global companies in various sizes and sectors have been examining how this new initiative dovetails with their other commitments. The 17 SDGs and associated 169 targets offer businesses:
- A reporting and communications framework
- A platform for materiality assessments linked to environmental/sustainability management systems
- An agenda to drive national policies and NGO advocacy
Unlike the previous Millennium Development Goals (MDGs) that were adopted by the UN in 2000 with minimal business community input, the UN SDG design benefitted from a broader consultative process with the private sector.
At a time when companies have already devoted resources to implementing detailed sustainability reporting initiatives—such as the Global Reporting Initiative guidelines—the idea of adopting a new global goal setting and reporting framework can encounter skepticism, if not opposition. It’s unlikely many companies will embrace the SDGs solely to demonstrate global leadership or to communicate their values. For the majority of global companies, a more specific and compelling business rationale is necessary.
SDG alignment opportunities
A general principle for individual companies is to use a business lens to evaluate and choose SDG alignment opportunities.
Work conducted by the World Environment Center since September 2015, with developed and developing nation companies, yields examples of applications of this business lens for value creation. This business rationale includes:
- Using the SDGs as an integrated platform for future materiality assessments Such a platform becomes increasingly valuable if the competing needs and agendas for information on material topics—from employees and senior management, diverse external stakeholders, the investment community, pension funds and government agencies—can achieve useful synergy rather than a confusing array of risk profiles each using a different methodology.
- Creating a new narrative for company engagement with stakeholders, especially in developing nations By using an internationally credible framework as the basis for goal setting and reporting, companies can better tell their business purpose stories—of key values, goals, commitments, and performance—especially in regions where sustainability is an important asset for market access, brand building, and talent recruitment and retention.
- Establishing a common reference point for sustainability conversations and decisions with customers and suppliers Value chain-based collaboration—to reduce business risk, advance innovation and develop customer solutions—has become an increasingly powerful mechanism for aligning sustainability with business decision-making. The SDGs’ content closely parallels the issues under discussion across the value chain for many companies.
- Using the flexibility of the SDGs to integrate and communicate commitments across the enterprise Since there is no requirement to report against all 17 goals, businesses have considerable flexibility in what specific SDGs they choose to adopt. Companies also need to focus and streamline their reporting across philanthropic, environmental, social and governance issues. The SDGs provide an additional means to allocate their resources more effectively and communicate their messages more powerfully.
It’s important to remember that information technology will transform data collection and management systems and accelerate the ability to directly track the use of company data by diverse audiences. As we enter a world in which data collection and flows begin real-time reporting and application, the argument to use global frameworks such as the UN SDGs, which provide focus and flexibility at a time of increased scrutiny of company performance, becomes even more compelling.
About the author:
Since 2006, Terry F. Yosie has served as the President & CEO of the World Environment Center to implement strategies to advance sustainability in global companies. He held senior management positions at the Environmental Protection Agency, and the chemical and petroleum sectors. He served on various U.S. National Academies’ committees and is the author of more than seventy professional publications. He received his Doctorate in Humanities and Social Sciences from Carnegie Mellon University in 1981.