Sustainable Development Goals: Why Business Should Care
In September 2015, more than 190 world countries adopted the UN’s 17 Sustainable Development Goals (SDGs) that aim to tackle climate change, provide clean water and end poverty, among other ambitious targets, by 2030.
On January 1, 2016, the SDGs will replace the millennium development goals as the new global goals to be accomplished in the next 15 years.
“If you are running a business, you’re probably asking right about now: ‘Why should I care?’” writes Bhaskar Chakravorti, senior associate dean of international business and finance at The Fletcher School at Tufts University, in the Harvard Business Review. Chakravorti says there are three reasons why business should care.
3 Reasons to Care
First, he says, the SDGs represent a growth opportunity for companies: consumers in emerging and frontier markets could be worth $30 trillion by 2025, up from $12 trillion in 2010. “Taking action on the global goals could help address several of these obstacles that are giving rise to ‘trapped value’ in the emerging markets,” Chakravorti writes.
Second, competitive pressure to help with the goals is likely and companies could gain a first-mover advantage by positioning themselves as SDG leaders. Microsoft’s approach to the SDGs, for example, starts with linking them to the company’s mission, says Dan Bross, senior director of corporate citizenship at Microsoft. On the flip side, being slow to take action puts companies at a competitive disadvantage.
Third, Chakravorti says, with their $3-tillion-per-year price tag, the SDGS “cannot be realized without business participation.”
‘Smart Risk Management’
Yes, these reforms have costs and by investing in corporate sustainability programs that target the SDGs, companies may increase costs in the short-term, says Klaus Leisinger, president of the Foundation Global Values Alliance and professor of sociology at the University of Basel, Switzerland, in a column in the journal Nature. But, Leisinger adds, companies — especially large, multi-nationals — have a major role in implementing the SDGs.
“Competing with integrity is smart risk management,” he writes. “Acting against global societal interests results in reputational damage, law cases, penalties and more regulation — as banks around the world and Volkswagen are finding out.”
So what do the SDGs mean for companies’ everyday work? In an article for Packaging Digest, Rosemary Han, a project associate with GreenBlue’s Sustainable Packaging Coalition, gives an example for the packaging industry. But it can be applied more broadly to other industries’ manufacturing practices as well.
SDGs and Everyday Work
Goal 12, aims to “ensure sustainable consumption and production patterns” by “encouraging industries, businesses and consumers to recycle and reduce waste” and “supporting developing countries to move towards more sustainable patterns of consumption by 2030.”
Han says the packaging industry can encourage sustainable production and consumption by “reducing unnecessary packaging and designing for sustainable end-of-life disposal options. This can take on a number of forms, ranging from designing for compostability, using widely recyclable materials, incorporating more recycled content, creating producer take-back programs, and encouraging packaging reuse or repurposing.”
A new SDG Fund report also highlights what businesses can do to support the sustainable development goals. The report, Business and the United Nations: Working together towards the Sustainable Development Goals: A framework for Action, which was produced with Harvard Kennedy’s School CSR Initiative and Business Fights Poverty, gives advice on how companies can address the UN’s 2030 Agenda for Sustainable Development and includes a series of case studies from members of the SDG Fund’s Private Sector Advisory Group including Microsoft, SAB Miller and H&M, among others.
What Companies Can Do
The SDG Fund report follows an earlier report from Corporate Citizenship, From ‘My World’ To ‘Our World’ — What the Sustainable Development Goals (SDGs) mean for Business, which outlines the five things that companies can do to realize the business opportunity from the global goals:
- 1. Assess the SDGs against company policies and practices.
- 2. Use the SDGs to inform strategy development.
- 3. Review the SDGs as part of target setting.
- 4. Apply the SDGs to impact monitoring and measurement.
- 5. Consider the SDGs as part of reporting, such as an SDG index.
“When it comes to the SDGs, it’s about much more than altruism and corporate social responsibility for companies—it’s just good business,” Environmental Defense Fund’s David Festa, vice President, ecosystems, tells Environmental Leader. “Protecting natural resources, reducing deforestation, and making food production more resilient to climate change will reduce the risk of supply chain disruptions. At the same time they reduce emissions, which improve public health. SDGs don’t just help the environment — they burnish both the brand and the bottom line.”
For additional reading regarding sustainability management, please refer to the following links:
Why Your Business Needs a Sustainability Plan
Best Practices in Sustainability
Building a Sustainable Workplace