SDG prioritisation - is business on the right track?

22 January 2018

How can companies’ best direct their considerable resources to meet the UN Sustainable Development Goals and be part of what one report estimates will be an annual US$12 trillion in business savings and revenue? Predictably, most companies are choosing to focus on the SDGs they feel are most relevant to their own business activities and where they can deliver the most value. But are they really thinking about it deeply enough?

Not according to our new comprehensive piece of research, The SDG Reporting Challenge: Exploring business communication on the Global Goals. We analysed the corporate and sustainability reports of 470 companies around the world to investigate how they were reflecting the SDGs. What we found suggests that many companies are engaging at a more superficial level, showing that they are still struggling to identify how and why individual SDGs are relevant to their business. As a result they are failing both to prioritise goals that need corporate support the most and to address those that could cause them the biggest problems in the future if left unchecked.

Nearly two-thirds (62%) of companies mentioned the SDGs in their reporting yet only 37% of the companies have prioritised individual goals. In many cases it’s clear that companies have taken the straightforward approaches of either “rebadging” existing programmes or prioritising goals that have obvious alignment to existing business strategy. It’s also clear that existing reporting structures are driving whether organisations are measuring success in some areas.

Through this lens it’s easy to see why Climate Action (SDG13), Decent Work and Economic Growth (SDG8) and Responsible Consumption and Production (SDG12) are the three most frequently selected goals.  Other goals, however, have been ignored – despite addressing pressing sustainability issues. Perhaps these goals seem too detached from core operations to be relevant. This could explain why Zero Hunger (SDG2), No Poverty (SDG1) and Life Below Water (SDG14) are the goals rated as lowest priorities by companies.

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Have companies stopped to consider the areas where their actions could be having an effect on the achievement of the goals in the broadest sense – particularly if this is negative?  And put corrective action plans in place as a matter of urgency?

Consider Life Below Water (SDG14). It might appear immaterial to companies outside of fishing, oil and gas production or global shipping – but if they emit wastewater or use plastic products or packaging, then it’s relevant.

No Poverty and Zero Hunger (SDG 1 and 2) may be low on the business agenda, but when we asked the public which SDGs were most important to them, these ranked right at the top. And while consumer opinion may not be directly addressed in current sustainability reporting, it is an increasingly important factor in setting corporate sustainability goals and in upholding brand reputation and goodwill with a wide variety of stakeholders.

A failure to consider the local context when setting priority goals can also put companies at a disadvantage as they seek to do business around the world, especially when it comes to compliance with current and predictable future governmental policy and regulation. Reporting on a few of the areas covered by the SDGs (or targets/indicators) is already a legal requirement across EU countries due to the implementation of the Non-Financial Reporting Directive. And this will increase as more governments introduce policy and legislation to ensure they are taking action to guarantee they achieve the goals in their own countries.

However, prioritising the goals isn’t as straightforward as it might first appear. It requires an understanding of the particular issues at a country or local level, combined with an analysis of business operations, sourcing and supply chain – one that many companies (especially smaller or privately held organisations) have not undertaken in the past or are perhaps under-resourced to conduct. It also requires a longer-term vision of, and approach to, business growth strategy and planning than some companies are used to employing. To have that longer term perspective requires an understanding of the risks they face if underlying SDG issues are not solved, as well as available opportunities from adapting products and services towards innovations and solutions.

Organisations need to take a much deeper and broader view of the SDGs and, most importantly, to the targets that lie beneath them. Those that don’t, could not only lose out on the economic opportunities that are waiting to be unlocked but could face losing their positive licence to operate in countries where they have previously been successful.

If you’d like to understand more about how to prioritise the SDGs that are most relevant to your business, or would like to see how your business is performing on its SDG reporting compared to the 470 companies we analysed, please get in touch.

Louise Scott | Director, Global Sustainability
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