How should business approach embedding the SDGs into their core business?

The SDGs provide a framework for a global society to coordinate on finding a path to improving the human and planetary condition. A key point of departure in the case of the SDGs is that this coordination is no longer the exclusive domain of the heads of state or international agencies or development organizations, as it has been in the past. The private sector in all its forms—big business, the garage entrepreneur, the young person on the street armed with a mobile phone, the investor—has a seat at the SDG table to join in the problem solving.

 

With 17 goals and 169 targets, the SDGs are far from being manager-friendly; approaching the goals as a whole runs the risk of reducing the SDG agenda to an exercise. In order to make these goals more actionable, perhaps it is better to first view them as a logical system; for example, with some goals as endgames, others as essential building blocks, and yet others as enablers. Each company’s management must create its own pathway through the SDGs – where do you propose they begin?

 

1. Should a business start with the SDGs and look for opportunity, or start with existing business and sustainability strategies and build from there?

 

2. At a practical level, what do the SDGs add to existing business sustainability strategies?  What should companies be doing differently as a result of the SDGs?

 

3. What tools do businesses need to facilitate deeper engagement with the SDGs? How should business report its contributions to the SDGs to meet the expectations of government and civil society stakeholders?

 

This discussion is part of a Challenge on embedding the SDGs into business with the UK’s Department for International Development, Pearson, De Beers and Cemex. This online discussion will inform the development of a guide for business managers. It will also feed into the Fletcher School's Annual Inclusion Forum (Inclusive Inc) happening in Boston later on Wednesday.

 

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This doesn't need to be an either/ or approach. Ideally, businesses would do well to do both i.e., take an outside-in perspective on what opportunities exist within the SDGs and an inside-out perspective on identifying the low hanging fruit opportunities where they can create impact in the near term

I think one of the interesting things about the SDGs is that their breadth and the more detailed targets that underpin them help companies to identify gaps in their current approaches and to develop a more comprehensive response.  For example, SDG 5 on women empowerment is much more comprehensive than before, encompassing issues of unpaid role, access to education and violence.   This in turn should encourage companies as a consequence to go deeper and think more broadly about their response.  


Thank - so let's move onto some practical issues.

Q2. At a practical level, what do the SDGs add to existing business sustainability strategies?  What should companies be doing differently as a result of the SDGs?

The purpose of business is to run their business. If over the course of formulating and executing their business strategy (that takes a sufficiently long view) business leaders identify how investments in sustainable development can be an effective lever for market growth and competitive advantage, this is where businesses should begin. That said, the SDGs play an essential role in reminding these strategists of the larger picture - and help them realize how their individual points of intervention can have wider effects, who their partners might be and if their competitors might also be making corresponding investments. My suggestion would be for the strategists to do BOTH: develop their own sustainable development investment pathway as guided by their own strategic calculus and study the SDG framework, identify their leverage points, publicly declare where they are willing to commit and create a platform for their partners to come on board using this framework. Such public declarations have other benefits: competitors have a better idea who within their industry is investing, so it helps mitigate against some concerns about free riding, partners and policymakers have a better idea about who within the private sector is participating and can help identify gaps and develop plans to close them and such public declarations, when accompanied by quantifiable and measurable targets can help keep the businesses accountable. One always has to worry about the SDGs becoming a tool for marketing departments and being reduced to SDG-washing operations.

In our research to date with companies, we see three areas where the SDGs add to existing sustainability strategies and activities:

First is the opportunity to align company-specific sustainability targets with a globally recognised framework of goals and targets, which creates greater legitimacy for businesses and a common language with which to engage stakeholders and to build a shared understanding of priorities.   Conversely with internal audiences it’s important to frame targets in ways that track closely to the way a business is run to give them “internal currency”.

Second is the opportunity to use the goals as a hook to stimulate greater engagement with sustainability within the business and the supply chain.  Many companies we work with have used the goals as an opportunity to kick start new initiatives and re-energise existing programmes.

Third is the opportunity to communicate the company’s contribution and increase accountability against a set of globally recognised targets.

Matthew - are you able to share any examples at the company level and/or industry level?

Matthew Gitsham said:

What I've seen companies doing so far in their engagement with the SDGs is to start by mapping the 17 SDGs and the 169 targets against their existing sustainability priorities and activity areas, to find out where they are already making their most significant contributions to the goals. They are then exploring whether there are major SDG areas where potentially their business could (but isn't yet) make a significant contribution through their core business and/or through a partnership with others.

Achieving the SDGs will require partnering across sectors. Companies should look to the SDGs to understand where the public sector will be investing and look for areas of alignment that present opportunities for collaboration to achieve better outcomes.  For example, to address the challenges and risks of financing infrastructure in developing countries – a key part of SDG 9, Citi joined the Sustainable Development Investment Partnership, a new public-private sector partnership that aims to derisk investments in infrastructure to mobilize $100 billion in private financing over five years for infrastructure projects in developing countries using development assistance to reduce risk.  This enables Citi and other commercial banks to raise private sector capital for infrastructure and at a much greater scale than the any of the individual partners would have been able to on their own.

Through our work with companies to date, we are seeing more progress on the SDGs being made when companies use existing management systems, processes and programmes for embedding the goals into the business, which do not add additional cost and complexity.  For example, using existing supply chain assurance mechanisms / processes as a mechanism to engage supply chain partners with the goals.  

From the conversations we've been having with companies already engaging with the SDGs, I've heard several ways in which the SDGs are already having a practical impact. For organisations reviewing their sustainability strategies, the SDGs are being used as a reference point - if a company is making a decision between which initiatives to prioritise, it is choosing those that align most closely with the SDGs (as well as their own core business), because of the legitimacy of the process that went in to deciding on these global priorities. 

Second, for individuals trying to get increased backing and buy-in internally for particular initiatives from colleagues internally across their businesses and value chains, if the initiative aligns with the SDGs, this is giving them extra confidence to really push what they're trying to do, and also helps a little with getting traction from  colleagues. Also, I've heard some people talking about being able to access increased resources internally for existing initiatives, if the company is now making public statements about these initiatives being a contribution to the SDGs.

Bhaskar - that's a powerful point.  I think stage 1 might be mapping the SDGs against what the business might already been doing / their existing sustainability priorities.  But stage 2, and potentially more exciting, is how business uses the framework to guide what they might do differently / additionally.  While I would always argue for an emphasis on core business, the SDGs offer a powerful INTERNAL management tool, beyond a simple EXTERNAL communications framework.  How do we encourage businesses to think more deeply?

Bhaskar Chakravorti said:

The purpose of business is to run their business. If over the course of formulating and executing their business strategy (that takes a sufficiently long view) business leaders identify how investments in sustainable development can be an effective lever for market growth and competitive advantage, this is where businesses should begin. That said, the SDGs play an essential role in reminding these strategists of the larger picture - and help them realize how their individual points of intervention can have wider effects, who their partners might be and if their competitors might also be making corresponding investments. My suggestion would be for the strategists to do BOTH: develop their own sustainable development investment pathway as guided by their own strategic calculus and study the SDG framework, identify their leverage points, publicly declare where they are willing to commit and create a platform for their partners to come on board using this framework. Such public declarations have other benefits: competitors have a better idea who within their industry is investing, so it helps mitigate against some concerns about free riding, partners and policymakers have a better idea about who within the private sector is participating and can help identify gaps and develop plans to close them and such public declarations, when accompanied by quantifiable and measurable targets can help keep the businesses accountable. One always has to worry about the SDGs becoming a tool for marketing departments and being reduced to SDG-washing operations.

I think many companies are seeing the SDGs as interesting primarily because of the capacity they might have to stimulate new partnerships, particularly partnerships that could unlock new funding streams that could enable businesses to make significant contributions to particular SDG areas at scale. In particular, I've heard many citing the example of the GAVI Alliance partnership, and how that flourished during the MDG era - Iots of companies are hoping that similar kinds of partnerships might be created for other SDG areas. 

Matthew - one of my worries is about the language barrier here.  In your experience are companies finding traction internally for the SDGs terminology?


Matthew Gitsham said:

From the conversations we've been having with companies already engaging with the SDGs, I've heard several ways in which the SDGs are already having a practical impact. For organisations reviewing their sustainability strategies, the SDGs are being used as a reference point - if a company is making a decision between which initiatives to prioritise, it is choosing those that align most closely with the SDGs (as well as their own core business), because of the legitimacy of the process that went in to deciding on these global priorities. 

Second, for individuals trying to get increased backing and buy-in internally for particular initiatives from colleagues internally across their businesses and value chains, if the initiative aligns with the SDGs, this is giving them extra confidence to really push what they're trying to do, and also helps a little with getting traction from  colleagues. Also, I've heard some people talking about being able to access increased resources internally for existing initiatives, if the company is now making public statements about these initiatives being a contribution to the SDGs.

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