As sustainability has shifted from a “nice to have” to a “must have” corporate mandate, alignment with the SDGs has been positioned by many as a method to help boost corporate sustainability credibility.
On one hand, it’s progress that the private sector is improving its ESG (environmental, social and governance) performance and looking at its impact on the world. But at the same time, we are also seeing SDG-washing, where companies use the UN SDGs logo and claim to be sustainable. How do you prevent this?
The business case
As public opinion of business has shifted, especially in recent years, CEOs and boards now understand their responsibility is not only to their shareholders, but also to their employees, communities and the environment.
In theory, aligning with the SDGs fits within the broader responsible business movement. While a focus on the Global Goals creates opportunities to enhance a company’s sustainability strategy and disclosures, these goals were not specifically intended to fit within a corporate structure. They were developed as goals for countries, not corporations, so companies must be thoughtful in their alignment approach to support the broader national goals while maintaining a connection to their existing corporate and sustainability objectives.
A sustainability-first alignment approach
To make alignment meaningful and impactful, engagement with the SDGs must be rooted in a company’s core competencies and should be pursued as part of a strategic sustainability platform, not a substitute for one. Sustainable business creates opportunities for innovation, helps identify and mitigate risk and creates opportunities for leadership, growth and new partnerships. Stakeholders are already asking for this data. Investors want ESG disclosures to inform them on risk management and growth opportunities from all aspects of the business. NGOs review ESG reports to understand how companies contribute to social and environmental issues they champion.
Without a strong sustainability strategy in place, aligning with the SDGs puts companies at risk for “goal-washing.” It’s easy for companies to get negative publicity from this popular movement when they do not put the processes and operations in place to accomplish these crucial goals.
Following the UN’s Economic and Social Council recent review of progress (or lack of progress in some cases) against the SDGs, it’s also important to remember new Global Goals will likely be put in place soon. With just over ten years left for this set of goals, having or creating a corporate sustainability strategy that supports core business and policy objectives is critical to ensuring consistency of operations and communications for decades to come, regardless of what the next set of goals includes.
Five steps to alignment
There are several steps that corporate leaders can take to evaluate and execute to ensure aligning with the SDGs makes sense for the business:
- Perform an ESG materiality assessment. This will provide clarity on the issues that stakeholders, including investors, need to know when making decisions about a company. Although there is much debate on the methodology and cost-benefit of such analyses, they do provide important insights that help companies prioritize policies and actions and which SDGs to potentially align with.
- Stakeholder engagement is paramount. As much as we all dislike silos, it is often how we operate. It’s critical to engage internal stakeholders across your company with different points of view and responsibilities as it is to hear from external stakeholders such as investors, consumers and NGO’s. As part of this assessment or to complement a previous assessment, reach out to stakeholders. Know which SDGs are most relevant to your corporate goals and business strategy and ask for input into their biggest concerns.
- Start small. Reflect. Be realistic. Can your company really help support 17 Global Goals and their 169 targets? Being thoughtful in which goals and how many you can successfully align with will benefit you in the short and long-term.
- Use material goals and targets. Data is at the core of sustainability strategy development and communications, and sound goals based on material issue-driven data provide a consistent framework to help guide decisions about the goals and how to implement them across the enterprise.
- Be transparent about your decision making. Whether you align or choose not to align, it’s important to be honest about your decision-making process and what alignment or going a different route does for your company.
Image credit: Global Goals for Sustainable Development/Facebook; Mary Mazzoni/TriplePundit