Sustainable Development Goals – A Business Challenge?
Maung K. Min (Global Sourcing Council)
A lot has been written about Sustainable Development Goals (SDGs). The SDGs, adopted by 193 Member States of the United Nations (UN) in September 2015, are a new set of sustainable development priorities for the world, replacing the Millennium Development Goals (MDGs). This 2030 Agenda establishes a new global framework for more inclusive and sustainable development at the global and national levels for the future. In its preamble, the UN states that the SDGs are, ”…plan of action for people, planet and prosperity. It also seeks to strengthen universal peace in larger freedom. ….We are determined to mobilize the means required to implement this Agenda through a revitalized Global Partnership for Sustainable Development, based on a spirit of strengthened global solidarity, focused in particular on the needs of the poorest and most vulnerable and with the participation of all countries, all stakeholders and all people. “1
The seventeen SDGs are comprehensive in scope, encompassing: 1.No Poverty; 2. Zero Hunger; 3. Good Health and Well Being; 4. Quality Education; 5. Gender Equality; 6. Clean Water and Sanitation; 7. Affordable and Clean Energy; 8. Decent Work and Economic Growth; 9.Industry, Innovation and infrastructure; 10. Reduced Inequality; 11. Sustainable Cities and Communities; 12. Responsible Consumption and Production; 13. Climate Action; 14. Life Below Water; 15. Life on Land; 16. Peace and Justice Strong Institutions; and finally, 17. Partnership to achieve the goal.
It has provided 169 targets to help achieve the goals. The goals apply to both small businesses and large multinationals. Credit goes to the UN for putting this comprehensive challenge together.
Business Fights Poverty2 has some good examples on how small businesses, and large are incorporating SDGs to their benefit. In supporting basmati rice farmers in India and Pakistan, MARS has committed to purchase 100% of its rice from sustainable sources. It has established goals that cover SDGs 1, 2, 5, 6, 8, 13. Here are some admirable targets:
- Goal 1 (No Poverty) and Goal 2 (Zero Hunger): By End of 2025, 50% increase in farmer net income from rice cultivation
- Goal 5 (Gender Equality): By End of 2025, Women workers and farmers’ wives have improved access to services and better livelihoods
- Goal 6 (Clean Water and Sanitation) and Goal 13 (Climate Action): By End of 2025, 30% reduction in water from water practices; Improved water stewardship management practices.
- Goal 8 (Decent Work and Economic Growth): By End of 2020, 100% basmati rice from sustainable sources, measured according to SRP standards including social standards.
PWC has compiled a resourceful guide for companies to navigate the SDGs, and the guide contains case studies on how companies from various industries have benefited from implementing them.3
As always, in order for the program to be successful, a key success factor is active leadership by the CEO and senior managers. The UN and NGOs have developed key documents focusing on implementation as this effort is a major change management undertaking.
The SDG Compass4 provides guidance for organizations to successfully implement this undertaking using their five step process (Understanding the SDGs; Defining priorities; Setting Goals; Integrating; and, Reporting & Communicating). While all these steps are critical to a successful implementation, integrating sustainability into the core business and governance is paramount, and embedding sustainable development targets across all functions within the company, is key to achieving set goals. To pursue shared objectives or address systemic challenges, companies need to engage in partnerships across the value chain, within their sector or with governments and civil society organizations. The Mars example above is a good success story.
Yet, in the past two years (and counting) corporate commitment has been, at best, lukewarm. Why so? According to Corporate Citizenship, “Two years on from the launch of the Goals, there are signs that corporate progress may be slowing. We’ve seen lots of welcoming announcements and reporting aligned to the SDGs. But the real challenge comes in application. The critical success factor is for businesses to now translate intent into action.” 5 The study also finds that one in five organizations (20%) have no plans of doing anything about the goals despite being aware of them (an uptick from 13%).5 The study shows that UK businesses lead on the SDGs, with more than two-thirds in the FTSE100 integrating SDGs in some form through their corporate communications. This compared to 38% of the largest American companies.
When addressing SDGs at a large US based pharmaceutical company my colleagues and I* engaged in interesting discussions. For one, we did not see the SDGs as drivers per se for the company sustainability goals; it was more the material issues driving the agenda. However, if the SDGs matched up with the company goals then it would be a happy marriage. In terms of goals and targets setting, our company would take SDG information along with other relevant literature, such as SASB metrics and industry best practices, into consideration in their due diligence exercise. So, it is not surprising to understand SDGs in competition with (saturated) guidelines that industry is already familiar with. US companies also appear to be more comfortable with the materiality exercise process with input of familiar issues, whereas SDGs are a late entry. Additionally, the timing of the introduction of SDGs is also critical. If sustainability goals were already established (some as late as 2015), companies typically would only consider incorporating them in the next cycle, which could be five years later. At best, leading companies would perform an alignment exercise to see how their goals and (elements of) SDGs lined up and, if so, communicate externally.
The Global Sourcing Council (GSC) is currently conducting a study on industry’s take on incorporating SDGs. The goal of this study: “Taking the Pulse of how Business Embraces Sustainability and Sustainable Development Goals, ” is to track the level of adoption of sustainability dimensions in global functions, such as: supply chains, procurement, sourcing, outsourcing, risk management and others, by industry sectors. The study, with responses from business professionals, also intends to measure the level of awareness of SDGs in business.
We hope to share our results by mid-2018.
- United Nations, General Assembly, Transforming our world: the 2030 Agenda for Sustainable Development: report of the Secretary-General, A/70/1 (25 September 2015), available from undocs.org/A/69/L.85
- sustainablefoodlab.org/reflection-and-going-forward/harnessing-sdgs-guide-long-3/. Accessed 19 December, 2017.
- pwc.com/gx/en/services/sustainability/sustainable-development-goals/mapping-the-way.html. Accessed 17 December, 2017.
- sdgcompass.org/. Accessed 19 December, 2017.
- Sustainable Development Goals: Are Corporates Stepping up to the Responsibility? 2017. http/3blmedia.com/News/Sustainable-Development-Goals-Are-Corporates-Stepping-Responsibility
* The author was previously Director at a global pharma company running Corp Sustainability Programs
Dr. Maung Min has a doctorate in business administration balancing academia with 25 plus years of corporate executive experience. He is Director of Business Programs & Faculty at Penn State University – Lehigh Valley, a visiting faculty at Rutgers University and Baruch College. Dr. Min’s multi-disciplinary research interests lie in Sustainable Business focusing on sustainability strategy, sustainable development goals, culture change, performance, as well as risk management in supply chain.
As a seasoned professional, Dr. Min has a record of accomplishment of leading initiatives in the areas of Sustainability, EHS, IM, Manufacturing, and Quality Systems (including Lean Sigma). As Corporate sustainability director for a Big Pharma, he designed and managed the development of key corporate sustainability goals (triple bottom line based) with senior leadership. Dr. Min also successfully managed the implementation of this enterprise initiative. In addition, a Chemical Engineer, Dr. Min has the experience of balancing technology and strategy.
Dr. Min is a Board Member at Global Sourcing Council. He is available for short-term consulting.