Why Sustainable Development Goals should be in your business plan

Organizations can harness the 17 Sustainable Development Goals to drive growth, address risk, attract capital and focus on purpose.

On 25 September 2015, a process led by the United Nations (UN) resulted in the 193 Member States adopting 17 global Sustainable Development Goals (SDGs)1 seeking to end poverty, fight inequality and injustice, and tackle climate change by 2030.

The SDGs cover broad challenges such as economic inclusion, diminishing natural resources, geopolitical instability, environmental degradation and the multifaceted impacts of climate change. They define the agenda for inclusive economic growth through to 2030 and were developed with inputs from business, academia and nonprofit organizations globally.

Many companies have also been working to address environmental, social and economic issues. Leading companies have begun to recognize that they can only address the complex sustainability challenges by scaling up their efforts through collaboration with peers, industry and sector organizations, customers, governments, nonprofit organizations, and society. The SDGs provide a universal and visionary framework for this global cooperation and action, bringing all stakeholders together to proactively address and solve these challenges.

If the SDGs are to be met, business is likely to play a major role and may also have a lot to gain.

The business case

Companies are facing challenges that limit their potential to grow, such as scarce natural resources, weak financial markets, limited local buying power and lack of qualified talent. We see a clear business case for companies to harness the SDGs to create opportunities to address these challenges across four key themes: growth, risk, capital and purpose.

Drive growth

Business growth in general is tied to the achievement of the SDGs at a macro level; however, to take action at a local level, companies should identify how they can contribute to meeting the goals in a way that drives financial performance in the markets they operate in.

While SDGs Nos. 8, 9 and 12 refer directly to economic growth, employment, sustainable industrialization, innovation and sustainable production, many of the other SDGs also offer business advantages through expanding into new markets, attracting talent and reducing risk from operations.

For example, when beverage companies invest in improved watersheds by working to replenish the aquifer water they use, thereby also committing to provide access to clean water to people in those water-stressed regions, their strategy aligns with SDG No.6 – Clean Water and Sanitation. While providing water supplies to sustain their bottling franchises near those watersheds, they are also investing in their social license to operate and thus strengthen their brands in these communities.

All companies stand to gain from more resilient communities, reliable access to natural resources, and an educated and healthy population to support their workforce. By helping drive progress toward these outcomes and creating shared value, companies can help to secure their ability to generate capital and shareholder value over the long-term.

A report by the Business & Sustainable Development Commission revealed that sustainable business models related to the SDGs could open economic opportunities worth up to US$12 trillion and increase employment by up to 380 million jobs by 2030.2

Six actions that companies should take now

1. Identify and commit

A critical step for companies will be to identify how the goals directly and indirectly relate to their business. Companies should take a strategic approach and align their corporate priorities with the relevant SDGs to better engage with customers, employees and stakeholders to make a positive impact.

Companies should consider:

• Identifying the SDGs that have the biggest impact in terms of risk and opportunity over the long term and where the company has the biggest ability to contribute to the progress toward the goals
• Determining the levers available to scale impact through changes to business models, procurement strategies, products and services
• Publicly committing to the SDGs to tackle relevant goals

2. Develop targets and KPIs

The 17 SDGs are accompanied by 169 specific, global and universally applicable targets. As companies identify their priority SDGs and begin to consider their strategy, they should set their own clear targets and key performance indicators (KPIs) to monitor and communicate progress.

Companies should consider:

• Establishing targets and KPIs that are closely aligned with the relevant SDG
• Aligning any existing targets and monitoring and measurement methods with these new targets and KPIs

3. Align sustainability and corporate strategy toward targets

By working through the process of identifying the most relevant SDGs and setting targets and KPIs, it is important for companies to reassess how well existing practices are aligned with the issues and targets.

Companies should consider identifying areas where:

• Business models can be adjusted
• Products or services are developed
• Supply chains are transformed
• Innovation and R&D are refocused
• Sustainability strategies are realigned to achieve both corporate goals and the SDGs

4. Create business opportunities

The SDGs provide a framework for generating revenue, providing business growth opportunities and fostering innovation in products and services. By identifying new business models, products or services that drive progress toward the goals, it is likely that more resilient and prosperous communities will emerge, markets will expand and new ones emerge, and consumer bases will grow.

Companies should consider:

• Identifying underserved geographies and segments of society, which could benefit from innovative products and services developed in a sustainable way
• Investing in education, capacity building and work opportunities to stimulate the economy through increasing the local economic power while preserving the environment
• Reducing the link between economic growth and intense use of natural resources and materials through energy and water efficiency, lower carbon, and circular economy ideas

5. Collaborate

It is unlikely a single company can solve any of these problems on their own, and collaboration is vital, both within sectors and across different industries. Collaboration will likely be the main enabler for successfully addressing the SDGs and scaling up efforts.

Companies should consider:

• Identifying collaboration opportunities with peers, customers, suppliers, academia and nonprofit organizations, as well as across industries, to achieve mutually beneficial solutions, leverage networks, achieve scale and share responsibility
• Partnering with governments, cities and civil society to deploy the financial, technological and human resources of business to promote development, stability and trade

6. Measure, assess, report and communicate

Businesses will also likely be held accountable for the impact of their activities and, in particular, progress in addressing goals linked to the SDGs. Integrating the SDGs in the core business and reporting cycle can help companies to focus on creating visible shared value.

Companies should consider:

• Aligning existing reporting and communication with the SDGs to both discuss performance in the context of the expectations set by the SDGs, and also align disclosures with the language of the SDGs to establish a common dialogue among stakeholders
• Developing systems to integrate the management of SDG issues into everyday business decision-making

We recognize that the SDGs may require a new way of thinking. The goals are complex and interconnected, and their success likely depends on new partnerships between business, governments and civil society. However, useful tools are emerging for companies to understand better how they can contribute to the SDGs in a holistic way. We are optimistic that the SDGs offer a road map for companies to engage with their internal and external stakeholders on how to create sustainable strategies that can transform not only their business models, products and services, but also the communities where they operate.