Including Sustainable Development Goals in your Business Plan
The United Nations (UN) put forth a set of Sustainable Development Goals in 2016, and in 2019, they’re still as relevant. As the number of businesses multiplies, the economy of business is slowly drifting into uncharted waters. However, the public still tends to run a demolition job on those firms whose sustainability vision is undisclosed or non-existent. That’s no doubt because of the massive role firms play in the impacts of climate change – whether aggravating or alleviating them.
Naturally, this pushes firms to participate in upholding, working towards and realising the Sustainable Development Goals set by the UN. This could be a commitment in the open, like Shell, Volvo and Sainsbury’s among others do, or it could be by weaving these goals into the firm’s own sustainable development goals and targets(often aided by third-party firms like EcoMatcher, which enables corporate tree planting).
The UN-Outlined SDGs
Before getting into how to implement SDGs, here are the 17 goals outlined by the UN to “end poverty, protect the planet and ensure that all people enjoy peace and prosperity”1:
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
17. Partnerships to Achieve the Goal
Arguing In Favour Of SDGs In Businesses
All things considered, including SDGsin a business plan is a logical choice, despite thejourney of strategy and implementation often being long and meandering.
Improved performances:Firstly, companies that focus on environmental change, social and geo-political sustainability is likely to incur lower costs of debt and equity and have the potential to outshine their market competitors within a single decade. In fact, the MSCI added a Sustainable Impact Index to their All Company World Index (ACWI) very recently – this means the numbers are backing up the morality of acting in favour of SDGs.
Decreased costs:Contrary to popular notions, putting sustainable business practicesinplace could actually reduce costs in the long run. Benefits of these practices include a significant drop in regulatory or strategic risk, cleaner supply chains, greater customer and employee loyalty and increased avenues for product innovation.
Government policy forecasting: 193 governments have come together in support of UN’s SDGs, which means businesses that commit to the goals will potentially be looked upon more favourably. Governments have been encouraged to support sustainable practices and give out relevant information which, when flipped, means that businesses can use the chance to gain insights on potential governmental regulations and diktats.
Making A Case For Participation At The SME Level
SDGs can be included in business plans of firms big and small, even if a higher-level strategic plan isn’t in the offing. For start-ups-to-be, it’s an even better chance to start off with sustainable environmental practices — customers veer towards brands that are making a difference. Taking ownership of that can differentiate SMEs from their competitors for whom sustainable practices often fall to the wayside of profit making.
Naturally, not all sustainable goals are appropriate for everyone, not least because of the difference in industries and objectives of sustainable development. However, there are a few general goals that cater to general environmental sustainability issues, climate change solutionsand human rightsefforts that any company could support regardless of what their USP is. In fact, 65% of surveyed respondents were engaged in ‘climate action’ (Goal 13) while ‘decent work and economic action’ (Goal 8) was second at 60%.2
Here is the lowdown on how to identify the goals to pursue:
Assess Impact Across All Goals
This in itself is a daunting prospect, but don’t let that deter you from the process, as it will help identify which goals to focus on. A structured approach is required to assess impact, as a variety of factors need to be looked at, including carbon footprint, supply chain sustainability, energy-efficient facilities, human resource management and gender equality in employee dynamics.
To form an SDG strategy, an assessment of the firm’s impact across all 17 goals is key. Some goals may overlap, yet others may be interconnected or not at all related. However, the impacts of processes can spread far and wide, so it’s worth taking a magnifying glass to each department and structure to assess its impact.
Pick And Choose From Relevant Goals
It makes little sense for one firm to tackle all goals; the pitfalls are many and more intense than the benefits. Instead, firms can use their structural assessment of impact to identify relevant goals from the list that they can valuably contribute to, rather than investing resources in furthering goals that don’t directly affect their customers, industry or company in itself. Some goals are a natural fit, others take a bit more time, while yet others are universal, regardless of industry. It would do well to pick a general goal, like climate action, and a more specific goal, like clean energy for a traditional O&G firm.
Firms must evaluate how much they can bite off before they chew, not least because a failure to reach set targets could lead to reputational and financial damage. This is another benefit of picking relevant goals– by investing in something that immediately affects the company and its immediate dealings; change is felt by some, if not all.
Understand The Risks Of Commitment
Committing to an SDG isn’t without its own risks. These could be financial (diverting precious resources), reputational (failing to reach set goals) and even productive (losing focus of other business goals in favour of SDGs). Commitments could also run the risk of becoming a ‘SDG wash’ where the goals are used as a communication or marketing gimmick without actually involving them in active strategy or measuring before-after impacts.
If using the goals as only a philanthropic ‘get out of jail free’ card, chances are that a firm could cut things fine when it comes to public sentiment and brand image. The SDGs were meant to be more than that– beyond being a guidepost for the present; they were also intended as a springboard and a mould for business models of the future.
Evaluate The Rewards Of Commitment
As with everything else, some risk brings reward even the world of business sustainability. The key is to be smart with where you put your money. In working towards solving a major world problem like climate changeor poverty, businesses can create increased shareholder value and reduce the chances of ‘stranded assets’, which are assets that require resources that are dwindling or worse, no longer available. Investing in furthering a goal such as #3 on the list could have a massive positive impact on a business’ own employees, making them more productive and happier to be at their jobs every day.
A cost-benefit analysis is of utmost importance when deciding whether to take the SDG plunge or not, because commitment comes at a cost and it needs to be profitable in the long run to be justified in the accounts book.
Whether incorporating SDGs holistically or making commitments to them public and manifest, businesses would do well to invest in this universal framework for the betterment of their value, employees and the global environment.