The SDGs, corporate strategy and corporate reporting

by Carol A Adams

shutterstock_180284267Following the adoption of the Sustainable Development Goals (SDGs) by Governments in late 2015[1] a number of companies have been thinking about how to incorporate them into their integrated reports and strategies.

Novo Nordisk, an award winning integrated reporter, was one of the first to comment on the relationships between the SDGs and the Novo Nordisk business model noting that the company would focus on taking action before reporting.  Of course taking action and reporting are not mutually exclusive and in fact public reporting of a commitment puts pressure on to ensure that action follows.

Unilever coordinated a simple 10 point manifesto for the SDGs published in January 2015 and endorsed by more than 20 multinationals.  The key points to note are its call for a shared  and integrated approach approach to addressing world challenges, a call to keep things simple and clear and a call for SMART (specific, measurable, achievable, relevant, and time-bound) goals.  Given the power of large global companies, the SDG’s cannot be achieved without them, so attention will soon turn to what they are themselves doing and whether these multinationals themselves have SMART targets.

The SDG Compass developed by the GRI, UNGC and WBCSD is full of (rather obvious) advice (“goal setting is critical to business success”, p5; “It is important to define the baseline for each goal”, p 18, etc). The document does not help reporters work out how to integrate SDG reporting with the UNGC principles or the GRI guidelines/standards:

“The SDGs enable companies to report information on sustainable development performance using common indicators and a shared set of priorities.” (p5)

(So what did G4 do?[2]).  And there’s the usual smattering of jargon and ‘tools’ (“The Logic Model”, which looks a bit like the Integrated Reporting business model with its outputs and outcomes; the “inside out approach”; the “outside in approach”; “mapping”, “compass”, etc)

The document doesn’t mention integrated reporting, but the language in it (“defining priorities”; “To seize the most important business opportunities… and reduce risks” (p 5) is much closer to the materiality language of integrated reporting than the accountability language of sustainability reporting.

Reporting examples

Below are some examples of how companies are reporting their commitment to the SDGs (from most innovative to least informative). They are pretty basic and there is plenty of scope for companies to demonstrate leadership in the nature of their commitment and reporting thereon.  In particular there is a need for leadership on linking reporting on SDG activity with reporting on transformation of the six capitals.

It is perhaps through their efforts to transform the capitals to create value that companies will make a material contribution to the SDGs.  And society can reasonably expect and demand such accountability.

BT’s Delivering our Purpose 2015/6 (page 8) includes an info graphic linking their own ‘ambitions’ against the SDGs but more importantly, recognising the importance of their achievement for business note: “We’ve explored the potential impacts on our business, if the Global Goals are not achieved by 2030 in the markets where we operate”.

Grupo Nutresa use an interactive visual to link SDGs to their activities in detail.

AkzoNobel provide a visual with coloured dots showing the strength of relevance of the SDGs ‘against our company agenda and priorities’.

Solvay says its implementing the SDGs and that its material issues ‘are in line with the global Development’ (whatever that means).  Solvay, Mondi (page 15) and Unicredit (page 87) link SDG goals to key activities.

Do please let me know if you come across better examples – or leave a comment.

What have the SDGs got to do with companies and pension funds?

The primary responsibility for the achievement of economic and social development in general lies with national governments and the Report of the Open Working Group of the General Assembly on Sustainable Development Goals published by the United Nations in 2014 places a strong emphasis on the role of national policies, domestic resources and development strategies along with the effective use of financing for sustainable development (see para 12, p8).  The report stresses the importance of improving the quality, coverage and availability of disaggregated data by income, gender, age, race, ethnicity, migratory status, disability, geographic location and other characteristics relevant in national contexts in order to monitor implementation of the SDGs. “The goals and targets integrate economic, social and environmental aspects and recognize their interlinkages in achieving sustainable development in all its dimensions.” (para 18, p9).

It is clear that the SDGs cannot be achieved without collaboration between governments, private and public sector organisations and civil society organisations.   This will involve setting expectations through legislation or soft regulation and holding organisations to account.  Stock Exchanges will also play a significant role in influencing the private sector through the listing requirements that they set.

International trade has a significant impact on: the environment, particularly climate change, global wealth distribution; natural resource consumption and price stability; and, food security. UNCTAD’s role is in promoting trade which has a net positive impact on sustainable development.   UNCTAD aims to ensure that an appropriate mix of national policies and frameworks is in place to ensure that trade facilitates sustainable development[3]:

“In the design of the post-2015 agenda, we need to know better what the conditions, policy mixes and best practices are to make use of trade as a means for sustainable development.” Mukhisa Kituyi, UNCTAD Secretary-General[4]

The World Investment Report 2016 launched last week provides analysis pointing to recent and future increases in global foreign direct investment providing an opportunity for investment to make a significant contribution to sustainable development.  And UNCTAD (2011) highlights the important role of pension fund investment practices in influencing responsible investment for sustainable development.

So we can expect companies to develop and report commitments and responses to the SDGs – ahead of being ‘encouraged’ or required to by stock exchanges and company legislation.

Video interview on the future of corporate reporting and the Sustainable Development Goals:

[1] http://www.un.org/ga/search/view_doc.asp?symbol=A/69/L.85&Lang=E

[2] There is however a link on the SDG Compass website which links SDGs to a GRI indicators.

[3] See UNCTAD paper TD/B/C.I/33 published 24th February 2014 available at http://unctad.org/meetings/en/SessionalDocuments/cid33_en.pdf

[4] Source: http://unctad.org/en/Pages/About%20UNCTAD/Post-2015.aspx

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