Leading sustainability practitioners say they are using the global goals to galvanise progress in their companies
Ten months into the UN sustainable development goals project, it’s timely to reflect on what the 17 goals and 169 targets mean for business. Are the SDGs turning the tide on corporate responsibility, or are businesses simply lost at sea?
While this article doesn’t claim to answer that question, it does aim to add insight from within business. It builds on Ethical Corporation’s State of Responsible Business report by providing a qualitative insight from a small sample of corporate responsibility (CR) and sustainability leaders. It offers a montage of perceptions and experiences around application of the goals in strategy and reporting, and the lessons already emerging.
As KPMG points out, while 90% of the world’s largest companies report on their sustainable development performance, there remains no common reference point for meaningful comparison. The SDGs offer a refreshed universal agenda designed to be relevant to all seven billion of the world’s inhabitants. Being far broader and more ambitious than the millennium development goals (MDGs), which expired in 2015, they are arguably better geared up to enable private sector contribution.
However, their scope may be a double-edged sword. Some goals are difficult to translate into corporate strategy, while others are dwarfed by the progress already made by the private sector. For example, SDG target 12.6 explicitly calls for businesses to "integrate sustainability information into their reporting cycle”. With 90% of the 250 largest companies in the world, known as the G250, already doing so (KPMG) and with well-established frameworks like the UN Global Compact (UNGC), Global Reporting Initiative (GRI), Sustainability Accounting Standards Board and Carbon Disclosure Project, this is hardly revolutionary.
Overall, only 35 companies made commitments to include sustainable development in their core business practices at the launch of the goals. Even looking ahead to the next five years, only 41% say they will embed SDGs into strategy, according to PwC. This was echoed by Ethical Corporation’s research, which showed a 42% figure.
What we did
We analysed published information from the UN and its partners, as well as intelligence from Ethical Corporation, PwC and KPMG. We then reviewed 21 CR/sustainability reports from the last year and interviewed sustainability practitioners from Marks and Spencer, Hogan Lovells, ARM, SABMiller, Ikea, GlaxoSmithKline (GSK) and Pearson. All were signatories to the UN Global Compact; all had board-level sustainability committees; and all were seasoned reporters.
What we learned
Our interviewees welcomed the expanded scope that the SDGs offered compared to the MDGs. "The great difference with the SDGs is the invitation to business to engage," said Bianca Shead, manager of sustainable development policy and advocacy at SAB Miller.
Regan Leahy, assistant citizenship manager at Hogan Lovells agreed. "We now have clarity that this is what we all need to be doing. The SDGs provide a common language for NGOs, governments and the private sector." Rowland Hill, sustainability manager at M&S, added: "Having a global, comprehensive set of sustainability priorities applicable to both sovereign nations and corporate entities can only be a good thing to drive improvement, focus actions and measure progress."
For Ikea, “the SDGs are something to galvanise the business, and not be approached as a box-ticking exercise", said Camilla Ohlsson, the home furnishings giant's strategic communicator in group sustainability.
Amanda Gardiner, vice president of sustainability and innovation at Pearson, agreed. "Internally, the SDGs help me to get buy-in. I can use the opportunity to align and present the SDG focus as something business needs to do to compete using a better language. And aligning is good for brand."
Among those we interviewed, there were different approaches to embedding SDGs into strategy. These ranged from mapping CR strategy to all the goals to homing in on one or two that were judged most material to the company. ARM, Ericsson, Unilever and M&S are all proponents of the scaled approach of looking at all the goals. PwC's research showed that businesses saw decent work and economic growth (SDG 8) and climate change action (SDG 13) as most resonant with their CR strategies.
However, the cherry-picking approach has its critics. Hill of M&S said a number of global businesses at the World Economic Forum and Consumer Goods Forum had voiced concerns that selective approaches posed a risk for meaningful progress by stalling action. Hill put this in the context of materiality: "The SDGs come out at a time when the materiality debate has peaked and although the [World Business Council for Sustainable Development's] SDG Compass tool recommends selectivity, there is nervousness about the basis for this."
Partnership, partnership, partnership
But as Priya Madina, director of global issues for GSK, says: "Just because a goal is referenced, it doesn't mean the work is done. It's about coming up with new partnerships across the 15 year timeframe." The company says the clock has started ticking towards 2030 and it’s important to begin partnership-building now.
Governments are top of the list when it comes to seeking partnerships. Shead of SAB Miller says the brewer wants reassurance that company taxes go to support infrastructure. She added that land rights is another important issue when business is investing for the long term. For many companies the UK's Department for International Development is a valuable partner. "DfID has the track record; the private sector has the competence and case studies," Shead said.
M&S is working with its UK trade bodies to push for greater clarity around materiality from the Foreign Office and Defra. Many companies cited the GRI is another key partner. The GRI is currently pushing for "a private sector review framework [to] be embedded in the overall country review architecture, which would each include a section on business contributions”.
SDGs and reporting
From the reports reviewed, we concluded that Ericsson, SABMiller, ARM and Ikea have done most to integrate the SDGs into their reporting. Among those that have deployed SDGs in a tabular annex, rather than taking an integrated approach, BT and Pearson stand out.
However, some people we spoke to voiced fears of the SDGs becoming a standardised approach to reporting - a development that would be incompatible with existing reporting frameworks and undermine transparency.
On the latter point, Hogan Lovells (not bound to report publically like a plc) uses the UN Goals to contextualise the issues it tackles with NGO partners, as opposed to letting the SDGs lead the structure and content of reporting (see its 2015 report). Ohlsson of Ikea goes further. "How you report against the goals is not the most important thing," she says. "If you have a sustainability strategy, then check alignment and use the goals to improve and guide." The company’s Sustainability Report shows how it connects each strategic activity to each SDG.
Overall, we noted a need for guidance on reporting so that contributions are captured in the UN reporting process. However, with governments still working on their country-level plans, it appears unlikely that this will happen in the next year.
Not too big for business
This brief insight has shown that progressive businesses see the wide reach of the SDGs as complementing, not corroding, sustainability strategy. While there is dispute around quality versus quantity in selection of goals, there is agreement that private sector contribution needs to be assimilated in a language that resonates with the UN /international development community.
Partnerships are paramount. This may sound trite but it’s so often overlooked as the CR naval-gazing process takes hold. Collaboration offers a chance to get out of the comfort zone and connect with competitors and others who will raise the bar on best practice.
The last SDG calls for a “global partnership for sustainable development”, recognising that complex challenges require integrated responses. Just because we’re 10 months in, it doesn’t mean that the time for debate is over; indeed, transparent and robust discussion will become increasingly critical if business is to come out of the SDGs project as a force for good.
How SDGs can add value to reporting
Here are seven ways to ensure the goals become more than a box-ticking exercise:
See them as a common language to build bridges with stakeholders. Convene your peers around the table to talk about sustainable cities and communities (SDG 11), or your suppliers around responsible consumption and production (SDG 12). Use the UN Sustainable Development Summit in September to talk about your work, as GlaxoSmithKline did last year, or join relevant multi-stakeholder initiatives such as the Global Alliance for Improved Nutrition (Gain).
Start small. Select the goals that are most relevant to your business and where you think you can make progress. Coca-Cola has focused on SDG 6 (water and sanitation), while Tesco, Nestlé, Tesco, Nestle and Unilever are homing in on target 3 (food waste) and Unilever are homing in on target 3 (food waste) within SDG 12. Don’t be overwhelmed by 169 targets: pick the ones that inform the type of performance disclosures you make. But do try to keep all goals on the long-term radar, or to spearhead action in your wider sector
Reframe your narrative. Goals 8, 9 and 12 deal with economic growth, employment, industrialisation, innovation, and production and consumption patterns. These are hot topics when it comes to CR reporting and there is a chance to reframe the tired models of "people/community" in language that resonates more with the wider world.
Use them to enhance your business case. There’s nothing like mentioning the word "UN" to get your board and investors to listen, or your customers to buy.
Make the links. Try to make connections rather than see the goals in isolation. As Regan Leahy, assistant citizenship manager at Hogan Lovells, points out: "If corporate and professional service firms are to engage with development, the SDGs provide the opportunity to realise that water access [SDG 6] has a lot to do with land rights [SDG 16]."
Use the design assets. There is little doubt that the bright, striking icons of the 17 Goals offer a quick-win to create a red thread through any report. Use the open-sourced icons to link individual stories to a bigger picture, or create low-cost infographics. ARM, for example, uses the SDG icons to show its 2015 progress at a glance (see pages 16-17 of its report).
Make them work with - not against - other frameworks. While the jury is out on whether the SDGs muddy the waters around other UN reporting initiatives try to see them as umbrella principles that inform your sector-specific frameworks. Add a column to your GRI Content Index, mapping the relevant GRI disclosures against relevant SDGs
Who we spoke to
Retailer Marks and Spencer (M&S) has been closely involved in setting the SDG framework. Relevant goals: 8, 11, 12, 13 and 15; and to a lesser extent 14, 17
Law giant Hogan Lovells sees potential in using the SDGs to connect better with NGO partners. Relevant goal: 16
Microprocessor leader ARM used its position within the UNGC Lead group of companies to call for an innovation goal (SDG 9). Relevant goals: all 17
Publisher Pearson was part of the Business Manifesto for the SDGs project in 2014 and Project Everyone. Relevant goals: 4, 8 and 10
South African drinks multinational SABMiller believes it can add momentum to the agenda because of its roots in the developing world. Relevant goals: at a global level all except 4, 14, and 16. Across its local businesses, all the targets are touched in some way
Furniture retailer Ikea robustly reports on the SDGs. Relevant goals: All, but a focus on 8 and 15
Global healthcare giant GSK: Relevant goals: 3, 17
The following companies were unavailable for comment but are active on the SDG agenda: Unilever coordinated the Business Manifesto. Its CEO Paul Polman served on the UN’s High Level Panel of Eminent Persons on the Post-2015 Development Agenda. Ericsson publishes its role against every goal. It has also published a report on ICT as an enabler of the SDGs. Primark is working through NGOs Cotton Connect and the Self-Employed Women’s Association to tackle work standards (SDG 8) and gender equality (SDG 5)
Use the tools
SDG Compass is a tool built in partnership with the UN Global Compact and the World Business Council for Sustainable Development. It contains an inventory of business indicators mapped against the 17 SDGs and their targets.
GRI Sustainable Development Goals Target 12.6 Tracker.
The UN business website allows companies to report progress against the SDGs.
The Sustainable Development Solutions Network supports the UN Guide Getting Started with the Sustainable Development Goals
The International Institute for Sustainable Development’s Partnering Initiative sets out practical actions governments and businesses can take to build effective partnerships and drive investment into developing countries.
The UNGC, which has 12,000 signatory companies in 170 countries, is seen as an important vehicle to engage with and challenge governments.SDGs SDG framework reporting