The general consensus is that the only way to meet the scale of the ambition of the Sustainable Development Goals (SDGs) and to bridge the estimated funding gap of $2.5 trillion per year is to fully mobilise business investment, innovation and expertise.
For companies, there are good reasons to engage with the SDGs. There are significant value creation opportunities—the Business and Sustainable Development Commission has identified that achieving the SDGs could create up to $12 trillion of market opportunities for companies. And it is also increasingly recognised that in today’s global context, there is pressure on companies to demonstrate a positive contribution to society—the SDGs provide a valuable framework for doing this.
One of the keys to scaling business’ contribution to the SDGs is moving this agenda from the CSR and Sustainability Departments into the very core of the business – mainstreaming an understanding of the SDGs into corporate strategy and across core operations, and engaging employees and value chain partners.
But embedding the SDGs into the core of the business and value chain in practice is not easy. SDG targets often do not directly correlate with how companies set and track performance targets and it is not immediately clear how they fit with existing sustainability strategies. We hope that sharing the experiences of companies to date will help others to understand common challenges and ways to approach them.
Our report draws on the experience to date of three leading companies: CEMEX, De Beers Group and Pearson, and aligns with the SDG Compass framework, an analytical tool developed by the UN Global Compact, Global Reporting Initiative (GRI) and World Business Council for Sustainable Development (WBSCD).
Our guide offers illustrative examples of how companies are tackling each of the following steps:
STEP ONE: BUILDING UNDERSTANDING IN THE BUSINESS OF WHAT THE SDGS MEAN
Work is required to build understanding within the business about both why and how the business could and should engage with the SDGs.
The most powerful driver for aligning incentives and capabilities in the business and supply chain in support of the SDGs is a clear, quantitative business case.
The business case for engagement with the SDGs will vary between sectors and in different operating contexts, but it will likely include some combination of the following:
Cost savings and opportunities for increased productivity and efficiency
Reinforcement and amplification of corporate values and brand
Mitigation of reputational risk
Strengthening strategic stakeholder relationships.
STEP TWO: MAPPING AND PRIORITISATION
Once a company has identified how the SDGs connect to business and sustainability priorities and the business case for engagement is clear, the next step is to conduct a baseline assessment to identify how existing business and sustainability goals and strategies in the core business and along the value chain contribute to the SDGs – both positively and negatively.
This baseline mapping can then be used to identify where impacts on the SDGs are greatest, where to focus efforts going forward, and where there may still be gaps to address.
Some companies have started with all 17 SDGs and mapped their impacts against each of them. Others have started with an analysis of their main material impacts and then mapped these to the SDGs. Some companies have initially focused on their core operations, whilst others have also included their wider value chain in the analysis.
Each company in our guide has used or is using their analysis to identify priority SDGs where the company’s potential impact and contribution is strongest. They also recognise that prioritising SDGs does not mean ignoring other SDGs, or the potentially negative impacts of business activities.
STEP THREE: SETTING BUSINESS RELEVANT TARGETS
Directly linking priority SDGs into corporate sustainability goals and targets demonstrates intent. It is a key step towards engaging and influencing colleagues across the business and the value chain, and helps to make a high level organisational commitment to the SDGs more tangible to individuals in the business. It is essential to unlocking the investment, management time and individual accountability required for meaningful action.
To make a stronger linkage between the SDGs and business targets, companies are exploring how to “adapt” specific SDGs targets and indicators for internal audiences so that they reflect the “spirit” and ambition of the SDGs but map more directly onto how the company runs the business.
STEP FOUR: INTEGRATING
Once SDG priorities have been established, and specific targets and priorities identified, the next step is to identify ways to bring them to life in the business and value chain by integrating into core operations, products and programmes, as well as social investment, public advocacy and policy dialogue activities.
Our research with companies has revealed a range of approaches to embedding the SDGs into the business, which include the following four areas:
Integrating an SDG focus into products and services – advancing the SDGs through product and service innovation.
Linking to existing initiatives to unlock new resources and momentum, and to catalyse new partnerships.
Leveraging existing management systems, structures and networks – for example, board-level sustainability committees or sustainability champion networks.
Integrating into public advocacy and policy dialogue activities.
STEP FIVE: REPORTING CONTRIBUTION
Many companies are already reporting and communicating on subjects related to different SDG goals and targets. As a start point, companies should also consult the SDG indicators being developed by the UN for opportunities to align their own reporting with the official SDG indicators. For each of the 17 goals and targets, the SDG Compass has identified relevant existing GRI indicators already commonly used by companies.
KEY SUCCESS FACTORS FOR OPERATIONALISING THE SDGS
The following success factors have been identified by participating companies as key to advancing the SDG agenda with internal colleagues and value chain partners:
Frame as core business, not a philanthropic extra
Develop tailored advice & guidance for different business units and different parts of the value chain
Translate the SDGs into business-relevant language
Develop a narrative that links the SDGs to business priorities
Harness key influencers and personal relationships to build cross-company support and engagement with the SDGs.