We are living in a volatile world. Socially, politically, in the environment and the economy, many people feel that the system simply isn’t working for them, even though life today is a better experience for more people than it has been at any time in history.
There is no prospect that these Turbulent Teens, as identified in the World Business Council for Sustainable Development’s Vision2050, can be resolved in the near-term without significantly rethinking our world. We need to transform entire economic systems. At WBCSD, we choose to focus our actions most notably across finance, cities and mobility, energy and materials, food and nature, as well as people.
It’s a formidable challenge – not just for us but for the entire world.
In 2015, both the Paris Agreement and the Sustainable Development Goals (SDGs) gave us internationally-agreed frameworks that are tools for transforming systems. In the SDGs in particular, we have a global agenda that can help stimulate action from all sectors that benefit both people and the planet.
The result will be a world that’s better for everyone – including businesses, which cannot survive in a society that fails.
Why business should engage with the SDGs
While the SDGs are a government agenda, they can’t be achieved without business. They provide businesses with a way of translating these global needs and ambitions into solutions.
Long-term business success also hinges on the SDGs. Companies that understand (and improve) their SDG impacts will be better placed to manage operational, regulatory and reputational risks; unlock potentially historic market opportunities; and consolidate an enduring license to operate on the path to 2030.
Here are four primary reasons for companies to engage with the SDGs:
- Capturing opportunities
- Managing risks
- The social contract
- Access to finance
There are huge incentives available. The Better Business, Better World report points to at least USD 12 trillion of market value which could be opened up by 2030 if the SDGs are realised, creating 380 million jobs in the process.
The SDGs can also help business understand emerging operational, regulatory and reputational risks. The SDGs, and the work that is monitoring their progress, are a valuable tool for managing business risk and securing an enduring license to operate on the road to 2030.
Around the world our societies are splintering. Populism is growing, owing to a rising concern that the system is no longer serving the many. Through aligning with the common language and shared purpose of the Goals, companies will better able to forge an improved social contract.
Companies that demonstrate positive impact on the SDGs look set to be able to secure enhanced access to finance. Institutional investors are increasingly aligning their portfolios with the Goals, and new financial instruments are emerging – such as special bonds, blended finance models, and facilitated loans that reward strong SDG performance.
What should companies do if they are still grappling with the SDGs?
The 17 goals and their 169 related targets can feel overwhelming, but companies should first ask themselves: “Where can we make the most meaningful contribution, and have the most significant impact?”
There is a clear five-step process that can help companies through this process, laid out in the SDG Compass: understand; define priorities; set goals; integrate; report.
This will help cut through some of the complexity that sits beneath the goals and identify the actions that are most relevant.
What are the big implications of the SDGs for business?
In addition to the USD 12 trillion opportunities the SDGs can offer to business, there are a range of other implications for companies around the world.
Doing nothing is obviously a costly option, including from the regulatory perspective, as the SDGs represent possible future policy directions.
The SDGs also point the way forward to better information gathering and decision making.
There’s more work to be done in translating the SDGs into the language of corporate governance, and companies must use mainstream risk disclosure models (such as the COSO or ISO enterprise risk management frameworks) to bridge the gap.
There’s also a significant implication for the way that companies do business. Achieving the SDGs is beyond the reach of any single company. Pioneering forms of collaboration are needed – between the private and public sectors, and between companies themselves. At WBCSD we are helping to bring together leading players from specific industry sectors to develop collaborative SDG Sector Roadmaps, while also driving broader partnerships through initiatives such as the Food and Land Use Coalition.
The world is watching
2019 will be an important year for taking stock. In September, an SDG Summit will be convened alongside the UN General Assembly in New York, bringing together heads of state to discuss the SDGs for the first time since their launch. Ahead of this Summit, the UN will release a report analysing SDG progress over the past four years.
In addition, the World Benchmarking Alliance intends to rank some of the world’s largest companies against their contribution to the 2030 agenda. 2019 will see the first of these benchmarks, kicking off a process which could see as many as 20 separate benchmarks over the coming five years. These will help drive compatibility and disclosures in the conversations between corporates and investors.
It is critical that business assimilate these findings and bring its voice to the conversation around how efforts can be enhanced.
From 2019 to 2050 and beyond
Everyone has heard what needs to be done. It is only transformational change across our global systems that can help achieve the SDGs, so that we can stay within the planetary boundaries that will ensure 9 billion people can all live well in 2050.
Throughout 2019 and beyond, WBCSD looks forward to scaling up the solutions that will accelerate this transition, by making more sustainable companies more successful.
- What are the opportunities for your business in engaging with the SDGs?
- How can we move the SDGs discussion beyond the sustainability department and into the whole company?
- Which frameworks will you use in measuring and managing company progress on the SDG agenda?
- Should Boards be doing more to push for action on the SDGs?
Continue the conversation and help us co-create the agenda
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