28 June 2018 by Stephen Butler and Heather Rankin
Business has an important role in achieving the UN’s goals to help end poverty and protect the planet
Launched in 2015, the Sustainable Development Goals (SDGs) are the UN’s ‘universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity’. With a deadline of 2030, making this ambition a reality requires action on many disparate fronts. The 17 goals cover areas from health, education and gender equality, to water and energy, and sustainable cities and communities.
The idea is for UN member states to adopt goals that align with their own social and economic priorities and environmental challenges, along with those addressing global impacts such as climate change. But a ‘universal call to action’ means that all actors within those states have a role to play, including the private sector. This is out of necessity – in such an interconnected world, no single government or organisation can achieve such complex and far-reaching targets working alone. The SDGs rely on governments, the private sector and wider society working together to create a future worth having.
In recognition of this, Goal 17 focuses on partnerships. This is highly relevant to business – the promotion of open and equitable global trade is one of several sub-targets. The idea is to enable developing countries to significantly increase exports: boosting economies, job creation and prosperity in the process. While this is clearly a matter of policy, customers of those exporting countries have an important role to play in ensuring potential suppliers in developing countries can access their supply chains.
UN Sustainable Development Goals
Launched in 2015, the UN Sustainable Development Goals are designed to end poverty, protect the planet and ensure prosperity for all. Each goal has specific targets to be achieved over the next 15 years. They are:
Goal 1: No Poverty
More information about the goals can be found on the UN’s website.
The role of business is certainly clearer in some areas than others. For example, ‘Goal 8: Decent Work and Economic Growth’ includes sub-targets relating to human rights and labour rights, where plenty of guidance exists to help companies understand their responsibilities.
The roles of the state and of business are clearly set out, for example, in the UN Guiding Principles on Business and Human Rights. Companies have a responsibility to ensure internationally recognised human rights are respected, both in their own operations and in those with which they have a business relationship – for example, suppliers. In order to meet this responsibility, companies should put in place a policy and due diligence process, as well as the means to remedy any human rights impacts they may contribute to.
In addition, legislation in this area is increasing. The UK Modern Slavery Act, for example, requires businesses with a turnover of £36 million to publish an annual statement on how they ensure slavery and human trafficking do not take place within their operations or supply chain.
Similarly, there are clear frameworks for developing climate strategies and carbon reduction goals that are based on sound science, in line with ‘Goal 13: Climate Action’. Context-based targets that take into account availability and demand in a specific water catchment area are also increasingly common as companies realise that a global approach to water stewardship cannot address local issues and meet the needs of local stakeholders. Again, there is a growing body of work available to help companies understand and respond to this complex area.
“SDGs rely on governments, the private sector and wider society working together to create a future worth having”
However, in areas such as the role of business in tackling poverty, the path forward is much less clear. If there are people growing or producing items within a company’s supply chain who are living in poverty, most would agree the company has a role to play in addressing this problem. However, there will always be questions over where the company’s responsibilities begin and end.
Is it enough to ensure people earn above the World Bank international poverty line of $1.90 a day? Or for suppliers to pay their workers the local minimum wage, which may not always afford a decent standard of living? Is a company responsible for raising incomes just from the product they are buying, or for helping people to increase their overall earnings? For example, if a company sources bananas from a smallholder farmer who also grows other crops, and bananas provide only 10% of her income, just raising her earnings from bananas may well still leave her in poverty.
Additional factors such as education, health, nutrition and access to finance and markets all play a critical role in a person’s ability to improve their livelihood. There are fundamental questions around whether it is appropriate or desirable for a company to intervene in these areas, or whether it is the role of the state – although the state may not be fulfilling that role.
Our research at Luminous indicates that although corporates are aware of the SDGs, there are three main barriers to effective reporting of them. The first is ‘SDG-washing’, where the goals become a superficial exercise, with no link to the corporate strategy and no reporting of performance, or setting of targets.
Second, a large proportion of companies are focusing on the positive contributions alone and not taking into account trade-offs and negative effects. For example, a business may develop renewable energy solutions in support of ‘Goal 7: Affordable and Clean Energy’ but displace communities and undermine rights to food, and access to water in the process.
Third, businesses are trying to tackle all 17 goals, which is not realistic. To avoid the pitfalls of reporting in this area, companies should consider setting up an internal working group, comprised of relevant functions from across the business, such as finance, risk, strategy and sustainability.
Creating specific programmes for addressing SDGs should not be necessary – companies should use their strategic framework and ensure the working group defines which goals map against the strategic priorities, taking into consideration both positive and negative impacts.
To tackle SDG-washing, businesses need to look at corporate objectives, targets and KPIs; performance data. Tangible commitments to the SDGs are the best way to demonstrate commitment and contribution.
Once a business determines which goals they are working towards, and how their impact will be measured, there is an opportunity to use them as an employee and wider stakeholder engagement tool.
The goals can become a rallying cry: for example, ‘Goal 13: Climate Action’ could be used to support engagement around flexible and home-based working; and working with customers and suppliers to find low-carbon alternative fuels or energy sources.
According to Edelman’s trust barometer, trust in business stands at a low 43%. The goals represent an opportunity for corporates to demonstrate that they are no longer the problem but are now part of the solution; contributing to solving the world’s most pressing environmental, social and economic challenges. Creating long-term, shared value, restoring trust and building advocacy with the stakeholders who grant business their licence to operate.