How Coca-Cola, Mahindra, and more are redefining business success as delivering on the Sustainable Development Goals.
By Meghan Ennes, Community Coordinator, Shared Value Initiative
From last year’s Paris Climate Talks to the UN’s newly announced 2030 Agenda, the world is coming together on urgent issues like climate change and global health crises – and no matter the sector in which you find yourself, these issues affect all of our futures.
A perfect example of this global action is the Sustainable Development Goals (SDGs), 17 targets launched last September to solve issues from gender equality to water conservation to food security. “This is the plan that the world community has agreed upon together,” commented UN Global Compact ED Lise Kingo at last month’s Shared Value Leadership Summit in New York. “The problem is,” she continued, “that this is the plan. There is no Plan B.”
Since their launch, there have been unanimous expectations that the private sector needs to play a significant role to realize any of the goals. World Bank President Jim Kim opened the Summit with a call for cooperation between sectors; because some of these goals have “infinite costs,” he says the social sector is going to need to discard the traditional ideology of not working with corporates. He went on:
“If you're actually serious about meeting these targets… the $140B in development assistance is not going to touch it… Not only does the private sector have a role, but without the private sector there's literally no hope of getting to where we're going.”
The next day Kingo went a step further to suggest that it is, in fact, in the best interest of business to act on the global goals. She moderated a panel of five large multinational companies*, all of which are either members of the UN Global Compact or even helped to formulate the global goals themselves. In the implementation phase of the SDGs, these companies are now redefining their business purpose – and metrics for success – as delivering on these huge global challenges:
Coke has a unique potential to scale solutions to the SDGs. “We have 3500 brands, we operate in 207 countries,” said Bea Perez, the company’s Chief Sustainability Officer, “It means we have a large accountability to help insure that we’re driving our business in the most productive and responsible ways. At the same time, how do we ensure that we’re leaving a strong legacy in communities?” The company started by determining how the goals were relevant to the core business. Incorporating the SDGs into an overall sustainability framework around social, economic, and environmental well-being, Coca-Cola is now focusing on two intertwining priorities: Water and Women (Goals 5 and 6).
In the developing world, women usually bear the burden of securing water for their families – which when lifted frees up their time to contribute economically and change the cycle of poverty. To address this issue, the company’s EKOCENTER initiative, which Perez described as “community center in a box,” delivers utilities like water as well as access to electricity and connectivity which a woman can either share with her family or sell. Coca-Cola is piloting the program with 100 EKOCENTERs globally, scaling gradually to build the business model to be relevant within local communities. Learn more about an EKOCENTER in Kajiado County, Kenya, set up in partnership with AfriAqua, a local social enterprise.
As a biotech company manufacturing enzymes used by industries from food & beverage to leather production, the reach of Novozymes’ products has vast potential to scale solutions to the global goals – on which the company has built a business model. “We used the global goals as inspiration in developing our new company purpose and strategy which we launched in January 2015,” commented Claus Stig Pedersen, Head of Corporate Sustainability. “I can with pride declare,” he went on, “that Novozymes no longer has a sustainability strategy, because that is our company purpose.”
To operationalize the SDGs, the company implemented an innovative assessment tool to estimate the impact potential for individual activities, which they’re using to evaluate their innovation pipeline. And by partnering with business and non-business partners across sector lines, Pedersen reports that the move has not only made the company more relevant in a development context but also helped brand recognition with customers and loyalty among employees.
CJ Group is a Korean conglomerate that touches over a dozen industries, from food to entertainment. In 2013 CJ became the first major Korean company to establish a Creating Shared Value (CSV) management department. Heekyung Jo Min is the Executive Vice President of that department, and she sees shared value as a way to unite the various business units across CJ’s diverse organization. In fact, the company’s structural orientation around shared value is a truly practical, advanced application of the approach.
While they’re the top company in most Korean industries, CJ sees their global goals orientation as a competitive advantage beyond country borders. Ms. Min comments, “The company is looking to expand globally, and for the next 17 years, we have a common language to speak locally.”
Mahindra is $19B group of companies that stretch across 10 sectors. As part of their robust social responsibility campaign Mahindra Rise, the company has incorporated sustainability into its core business through leadership development. Rajeev Dubey, CEO of Mahindra’s After-Market Sector, says the company has identified five leadership behaviors to drive sustainability and positive change: using both right and left brain, being a multiplier, leveraging failure, practicing mindfulness, and creating trust. While philosophical in nature, the company actively encourages these traits in performance evaluation, talent management, and succession planning.
Mahindra is also operationalizing shared value through hard metrics. In a Devex interview at the Summit (below), Dubey says the group measures shared value by looking at traditional business metrics, such as a return on capital. “That is what shared value is really,” he says. “It is about creating good business out of meeting unmet needs of underserved customers in underpenetrated markets.”
Cemex is a century-old company based in Mexico with operations in 50 countries. Like CJ, they see incorporating the SDGs into their strategy as an entry point to both local and global stage. As a building materials company, Cemex sees contributing to community development as relevant to their core business: “We want to operate in places that are sustainable,” said CSR Director Martha Herrera, always asking: "How can our company strengthen that ecosystem, and how can that ecosystem strengthen our strategy?"
In practice, their Patrimonio Hoy program – started 17 years ago – pioneered an innovative model that profitably offers low-income consumers access to finance and materials for housing improvements while also integrating local workers into the sales and distribution model. And in collaborating with various stakeholders in the process, Herrera said they have developed 7 different business models to address different segments within that market.
*Coca-Cola and CJ Group are funding partners of the Shared Value Initiative.
Add a Comment