The Sustainable Development Goals and Business
The Sustainable Development Goals and Business
The Sustainable Development Goals and Business
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Introduction
The Sustainable Development Goals (SDGs), agreed at a United Nations General
Assembly in September 2015, were described as ‘a plan of action for people, planet and
prosperity’ (United Nations 2015a). These goals are ambitious and embrace a wide range of
environmental, social and economic issues including climate change, energy, water
stewardship, marine conservation, biodiversity, poverty, food security, sustainable
production and consumption, gender equality and economic growth. The United Nations
called on all governments to develop national strategies to pursue the SDGs but also
acknowledged ‘the role of the diverse private sector ranging from micro-enterprises to
cooperatives to multinationals’ in addressing these goals. In reviewing future business
engagement with the SDGs PricewaterhousecCoopers (2015) argued that when
governments sign up to the SDGs ‘they will look to society and business in particular for help
to achieve them’ , that the SDGs ‘will herald a major change for business’ and that ‘business
will need to assess its impact on the SDGs and review its strategy accordingly.’ That said the
Institute for Human Rights and Business (2015) suggested that ‘the SDGs seem to have
quietly re-imagined a new model of business, relapsed as an agent of development,
harnessed and channelled by governments and set to work on alleviating poverty and
fostering sustainable economic growth for all.’ Further the Institute for Human Rights and
Business (2015) argued that ‘business is not an adjunct of aid’ and that ‘economic activity
cannot easily be directed to where the need is greatest’ but rather ‘it prospers when
provided with the right conditions and the right opportunities.’ With this in mind this paper
offers a preliminary review of international efforts being made to encourage businesses,
and more specifically the consumer goods industry, to address the SDGs and offers some
wider reflections on business engagement with the SDGs.
Sustainable Development Goals
The SDGs have been described as demonstrating ‘the scale and ambition’ of the
United Nations ‘2030 Agenda for Sustainable Development’ which is designed to ‘shift the
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world on to a sustainable and resilient path’ (United Nations 2015a). There are 17 SDGs, and
169 associated targets, in ‘a genuinely comprehensive vision of the future’ in which ‘little is
left unaddressed’ from ‘the wellbeing of every individual to the health of the planet, from
infrastructure to institutions, from governance to green energy, peaceful societies to
productive employment’ (Institute of Human Rights and Business 2015). The ratification of
the SDGs is the latest in the line of global sustainable development initiatives which can be
traced back to the declaration designed ‘to inspire and guide the peoples of the world in the
preservation and enhancement of the human environment’ (United Nations Environment
Programme 1972) following the United Nations Conference on the Human Environment
held in Stockholm in 1971. More recently the SDGs are seen to build on the United Nation’s
Millennium Development Goals (MDGs) established in 2001. The MDGs were described as
having ‘produced the most successful anti-poverty movement in history’ (United Nations
2015b) but other assessments of the achievements of the MDGs have been more balanced.
. While Fehling et. al. (2013), for example, acknowledged that ‘remarkable progress has
been made’ they argued that ‘progress across all MDGs has been limited and uneven across
countries.’ At the same time the involvement of the business community in the MDGs was
limited with PricewaterhouseCoopers (2015) commenting ‘business, for the most part,
didn’t focus on the MDGs because they were aimed at developing countries.’
There are some 17 SDG’s (See Table 1) with each one having a number of associated
targets. The targets for 2030 for Goal 1, namely to end poverty in all its forms everywhere
include eradicating extreme poverty, measured as people living on $1.25 per day, ensuring
that all men and women and particularly the poor and vulnerable have equal rights to
economic resources, access to basic services and ownership and control over land and
property; and building the resilience of the poor and vulnerable to reduce their exposure to
climate change related extreme events. For Goal 6, namely to ensure availability and
sustainable management of water and sanitation for all the 2030 targets include achieving
universal and equitable access to safe and affordable drinking water for all: protecting and
restoring water related ecosystems; and improving water quality by reducing pollution,
eliminating dumping and minimising the release of hazardous chemicals. Targets for Goal
12, namely to ensure sustainable consumption and production patterns include achieving
the sustainable management and efficient use of natural resources by 2030; halving per
capital global food waste at the retail and consumer levels and reducing food losses along
production and supply chains by 20130; and designing and implementing tools to monitor
sustainable development impacts for sustainable tourism that creates jobs and promotes
local culture and products.
Promoting the SDGs within the Business Community
THE SDGs are clearly wide ranging and ambitious and their successful promotion
within the global business community seems likely to be a long and challenging journey.
That said the Global Reporting Initiative (GRI), widely recognised as the leading global
framework for sustainability reporting, along with the United Nations Global Compact
(UNGC) and the World Business Council for Sustainable Development (wbcsd) have the ‘SGD
Compass’ which offers a ‘guide for business action on the SDGs’ that is designed to ‘assist
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companies in maximizing their contribution to the SDGs’ (GRI/UNGC/wbcsd 2015). This
guide includes ‘five steps’ (GRI/UNGC/wbcsd 2015) namely
Defining priorities
Setting goals
Integrating and
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In identifying business opportunities, for example, the arguments are that sustainable
development challenges are presenting market opportunities for companies to develop
innovative energy efficient technologies, to reduce greenhouse gas emissions and waste and
to meet the needs of largely untapped markets for health care, education, finance and
communication products and services in less developed economies. By enhancing the value
of corporate sustainability, and more specifically by integrating sustainability across the
value chain, it is argued that companies can protect and create value for themselves by
increasing sales, developing new markets, strengthening its brands, improving operational
efficiency and enhancing employee loyalty and reducing staff turnover. It is also argued that
companies that work to advance the SDGs will improve trust amongst their stakeholders,
reduce regulatory and legal risks and build resilience to future cost increases and regulatory
and legislative requirements.
The focus on defining priorities encourages companies to adopt a strategic approach
in assessing their current and possible future impacts on the SDGs with the focus being on
looking to enhance positive impacts and to reduce negative impacts. In making such an
assessment companies are advised to map the SDGs against their value chain and to engage
with both internal and external stakeholders and particularly to give due attention to future
impacts on the environment and to disadvantaged and marginalized groups. The guide
argued that mapping the high impact areas will help a company to determine its priorities,
to select appropriate business indicators to measure these impacts and to put the necessary
data collection processes in place. The third step in the guide involves ‘setting specific
measurable and time-bound sustainability goals’ (GRI/UNGC/wbcsd 2015) and here the
accent is seen to be on the selection of key performance indicators to drive, monitor and
communicate a company’s progress against its strategic goals. The guide also recommends
that companies adopt high levels of ambition that will, in turn, ‘spur innovation and
creativity’ (GRI/UNGC/wbcsd 2015). Companies are also advised to announce their
commitment to the SDGs on the United Nations business website.
The fourth step emphasises the need for companies to integrate sustainability into
their core business across the whole of the supply chain. This is seen to involve ownership
of, and commitment to sustainability goals throughout the company and clear
communication of how these sustainability goals are contributing to wider business goals.
The guide stresses the importance of embedding sustainability across all functions, though it
recognises that some functions will be more important than others, and it applauds those
companies which have established cross-functional sustainability boards or task forces and
the establishment of sustainability committees at board level. Finally the guide highlights
the importance of transparent reporting and communication mechanisms and of corporate
sustainability disclosure. The development of systems designed to integrate the
management of sustainability into strategic decision making is seen to be essential as is the
need to adopt internationally recognised sustainability reporting standards. Here the SDGs
are seen to provide a common language for sustainability reporting both within and across
companies.
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The SDGs and the Food, Drinks and Consumer Goods Sector.
While the SDGs have potentially major implications for all sectors of the global
economy in many ways the food, drinks and consumer goods sector is at the heart of the
drive towards a more sustainable future and is undoubtedly in a position to drive
sustainability goals. The Sustainability Consortium (2016), for example, recognised that
while ‘consumer goods bring countless benefits to society, dramatically improving lifestyles
around the world’ it also reported that consumer goods account for 60% of greenhouse gas
emissions, 80% of water withdrawals, 20% of industrial water pollution and 75% of forced
and child labour. At the same time ‘retailers have come to assume a pivotal role in
responding to the sustainability requirements faced by consumer goods in general and more
specifically by food and drinks products.’ Here retailers, as the active intermediaries
between producers and consumers, can be seen to be in a powerful position to drive more
sustainable production and consumption through their partnerships with suppliers and
through their regular, often daily, contact with consumers.
The Consumer Goods Forum, a global network of over 400 retailers, manufacturers
and service providers which provides a platform on a number of strategic issues including
sustainability, has argued that its work is directly related to ten of the SDGs (namely Goals 1,
2, 3, 5, 6, 8, 12, 13, 15 and 17 as in Table 1). In addressing Goal 2, for example, the
Consumer Goods Forum stressed its ‘commitment to making public company policies on
nutrition and product formulation and industry-wide implementation of consistent product
labelling and consumer information to help consumers to make informed choices and
usages’ (The Consumer Goods Forum 2105). In reviewing taking urgent action to combat
climate change and its impacts the Consumer Goods Forum drew attention to its
‘environmental sustainability work’ and to ‘approved resolutions to begin phasing out HFCs
from 2015, to achieve zero-net deforestation by 2010 and halve food waste by 2025, thus
tackling three of the most material climate impacts facing the consumer goods industry
globally.’ The Consumer Goods Forum also reported that its commitment to protect the
planet focused on the sustainable sourcing of soya, palm oil, beef, paper and pulp.
More specifically the UNGC and KPMG have published the ‘SGD Matrix’ for the food,
beverage and consumer goods industry which ‘profiles some of the most significant
opportunities, principles-based initiatives and collaborations for the Food, Beverage and
Consumer Goods Industry’ (UNGC and KPMG). The matrix looks to group what it describes as
‘the biggest opportunities for shared value-i.e. where we see the coming together of market
potential, societal demands and policy action’ as being grouped around four specific themes.
Namely enterprise development; sustainable supply; healthy and sustainable living; and
product innovation. In addressing enterprise development, for example, the aim is to
promote inclusive development by increasing the participation of small and medium size
business in developing economies which is seen to include providing training and best
practice guides, connecting small businesses and entrepreneurs to capital and creating
markets for local products through innovation and mobile technology. The theme of
sustainable supply is focused on reducing climate change impacts through a range of
initiatives including reductions in natural resource usage, increasing the use of renewable
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sources of energy, monitoring and reducing food waste and enhancing climate resilience
across supply chains.
The Matrix addresses each of the 17 SDG goals. In examining Goal 2 namely ending
hunger, achieving food security and improved nutrition and promoting sustainable
agriculture, for example, a number of initiatives are outlined. Here the importance of
companies collaborating with farmers, food processors and traders to increase productivity,
storage, logistics and market efficiency is emphasised which it is claimed will ‘empowe them
to enter/remain in the company’s value chain by producing high quality, safe and nutritious
foods at competitive prices’ (UNGC and KPMG 2016). Companies are also encouraged to
‘leverage the power of mobile networks to provide farmers with real time access to markets
and mobile payments, particularly in areas that lack a formal banking structure’ (UNGC and
KPMG 2016). Illustrative examples for a number of companies, including Diageo, Nestle,
Heineken, Unilever and Starbucks, which are said to be ‘leading by example’ (UNGC and
KPMG 2016). Here, for example, Nestlé’s 2014 commitment on land and land rights in
agricultural supply chains and its adoption of the Food and Agriculture Organization’s
voluntary guidelines on the responsible governance of tenure of land, fisheries and forests is
seen to be crucial in helping the landless gain access to land.
In looking to ensure sustainable consumption and production patterns (Goal 12) the
matrix identifies a number of opportunities for shared value. These opportunities include
striving to phase out hydrofluorocarbons and derivative chemical refrigerants and replacing
them with natural refrigerants; increasing energy efficiency across the value chain; reducing
packaging and increasing the recycling of end products and by-products of the production
process; and raising consumer awareness of the importance of sustainable consumption and
practical steps that can promote sustainably. Here again a number of illustrative examples
are cited in an attempt to demonstrate how companies are promoting sustainable
consumption and production. It is reported, for example, that Heineken has set a number of
targets to reduce carbon dioxide emissions across the value chain namely a 40% reduction
in emissions in production, a 50% reduction in emissions from fridges and a 29% reduction
in emissions in distribution in Europe and the Americas. The Lego Group is reported to be
exploring new ways of increasing the recycling of its packaging materials by targeting each
stage in the supply chain.
Discussion
The SDG’s are undoubtedly an ambitious and a wide ranging agenda and their vision
of a truly sustainable future faces a number of major challenges. In providing a briefing for
UK Members of Parliament, for example, Lunn et. al. (2015) expressed concerns that the
SDGs are not legally binding and thus ‘successful implementation therefore depends entirely
on political commitment’, that implementation may fall well short of a truly
transformational agenda and that the cost of the SDGs will considerably exceed the current
global development and aid budget. At the same time Lunn et. al. (2015) also questioned
the robustness of the monitoring, accountability and follow up mechanism, if there would
be genuine ownership of the SDGs and arguably more critically if the chosen goals and
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targets are the correct ones. While the business community is being encouraged to
contribute to the realisation of the SDGs a number of issues merit reflection and discussion.
While the headline call for greater business engagement with the SDGs can be seen
as a rallying cry it masks underlying complexities and tensions. The Institute for Human
Rights and Business (2015), for example, argued that the inclusion of businesses in global
sustainable development is complex in that ‘it assumes companies of all different sizes and
all different sectors will increasingly operate according to environmental, social and human
rights standards…... it assumes business models will be reconfigured as necessary to ensure
sustainability of products and services, sometimes at the expense of higher profits’ and ‘it
assumes that the business community , in partnership with states and civil society, will
channel a greater share of resources towards meeting SDG targets, through investment as
well as philanthropy.’
Such massive hurdles aside where businesses look to develop a genuine sense of
engagement with the SDGs they face major challenges in determining which of the 17 SDGs
(and which of the 169 associated targets) they select and prioritise and how they integrate
SDGs into their existing corporate sustainability strategies. The vast majority of large
companies employ a range of stakeholder engagement processes to determine the material
issues, namely the explicit identification and prioritization of the environmental, social and
economic issues which underpin a company’s sustainability strategy. Within this selection
and prioritisation process there is a generic issue concerning the nature of the relationship
between company interests and stakeholder interests. Where a company, and more
specifically its executive management team, is principally, and sometimes exclusively,
responsible for identifying and determining material issues, such issues seem more likely to
reflect strategic corporate goals rather than the SDG’s. Bannerjee (2008) argued that
‘despite their emancipatory rhetoric, discourses of corporate citizenship, social responsibility
and sustainability are defined by narrow business interests and serve to curtail the interests
of external stakeholders. As such the successful progressive adoption of the SDG’s may
require a fundamental change in corporate culture but as Fernando (2003) argued
‘capitalism has shown remarkable creativity and power by appropriating the languages and
practices of sustainable development.’
PricewaterhouseCoopers (2015), for example, suggested that self-interest may drive
SGD selection and businesses may be ‘set to cherry pick the SDGs.’ In addressing the former
PricewaterhouseCoopers (2015) argued that in the SDG selection process businesses will
‘see their greatest impact and opportunity in areas that will help drive their own business
growth.’ Further PricewaterhouseCoopers (2015) argued that ‘when business profits from
solving social problems, when it makes profit while benefitting society and business
performance simultaneously, it creates solutions that are scalable’ and asks ‘should we
question the motives of business if their activity and ingenuity works in the benefit of
society.’ In addressing cherry picking the SDGs PricewaterhouseCoopers (2015) argued that
‘It’s clear that business doesn’t intend to assess its impact across all the SDGs, its plan is to
look at those relevant to their business or a sub set of these. It’s less about picking the
easiest, most obvious or positive ones and more about picking the ones that are material to
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the business.’ These suggestions certainly strike a chord with the concept of creating shared
value developed by Porter and Kramer (2011) defined as ‘policies and practices that
enhance the competitiveness of a company while simultaneously addressing the economic
and social conditions in the communities in which it operates’ but here again such an
approach might be seen by some commentators to fall well short of the underlying ethos of
the SDGs.
Where individual companies identify and pursue a sustainability strategy that is
integrated into the SDGs they will then also need to measure their achievements and to
integrate their achievements into their sustainability reporting process. van Wensen et. al.
(2011) defined sustainability reporting as ‘the provision of environmental, social and
governance information within documents such as annual reports and sustainability reports.’
The SDG Compass, for example, emphasised to companies that ‘It is important to report and
communicate on your progress against the SDG’s continuously in order to understand and
meet the needs of your stakeholders’ (GRI/UNGC/wbcsd 2015). In some ways sustainability
reporting has become an ‘industry’ in itself and a number of private companies and
voluntary organisations offer sustainability reporting services and frameworks. The United
Nations Environment Programme (2013), for example, identified a number of ‘reporting
frameworks and protocols, reporting systems, standards and guidelines’ but reported that
the Global Reporting Initiative ‘has become the leading global framework for sustainability
reporting’ and cited its comprehensive scope, its commitment to continuous improvement
and its consensus approach as being important in contributing to its pre-eminence in the
field. Originally founded in 1997 the Global Reporting Initiative reporting framework has
progressively evolved from the original G1 Guidelines launched in 2000 to the current G4
Guidelines introduced in 2013. The external assurance of sustainability reports is seen to be
of central importance within the new guidelines.
While many large companies currently claim that their sustainability reports follow
GRI G4 guidelines their approach to independent external assurance is often limited and/or
confined solely to carbon emissions data. While this is currently not a problem per se as
sustainability reports are themselves voluntary and accompanying assurance statements are
not subject to statutory regulation, the lack of comprehensive independent assurance can
be seen to undermine the credibility and integrity of the sustainability reporting process.
However for large companies capturing and aggregating data on a wide range of
environmental, social and economic issues, across a wide range of business activities
throughout the supply chain and in a variety of geographical locations and then providing
access to allow external assurance is a challenging and potentially very costly venture. It is
also one which many companies currently choose not to pursue. In looking to the future if
companies are to publicly demonstrate and measure their commitment and contribution to
the SDGs then the independent assurance of all the data included in sustainability reports
would seem to be essential. That said in providing guidance on ‘effective reporting and
communication’ the ‘SDG Compass’ simply notes ‘companies can make use of competent
and independent external assurance as a way to enhance the credibility and quality of their
reports’ (GRI/UNGC/wbcsd 2015).
The concept of sustainable consumption, which Cohen (2005) has described as ‘the
most obdurate challenge for the sustainable development agenda’ can be seen to provide a
particularly daunting challenge for companies, and perhaps particularly for retailers, which
want to engage with the SDGs. In addressing goal 12 namely to ‘ensure sustainable
consumption and production patterns’ the United Nations Development Programme (2016)
stressed the need to ‘urgently reduce our ecological footprint by changing the way we
produce goods and services.’ That said within many developed economies there is little
consumer appetite for sustainable consumption and here the European Commission’s
(2012, p.9) recognition that ‘sustainable consumption is seen by some as a reversal of
progress towards greater quality of life’ in that ‘it would involve a sacrifice of our current,
tangible needs and desires in the name of an uncertain future’ resonates. This view is
supported by Reisch et. al. (2008) who argued that although moving towards sustainable
consumption is a major policy agenda, ‘growth of income and material throughput by means
of industrialization and mass consumerism remains the basic aim of western democracy.’
The ‘SDG Compass’ couched its guidance to companies on sustainable consumption and
production in terms of shared value and stressed the overall importance of energy efficiency
and waste reduction strategies, for example, rather than a more explicit and measurable
focus on reducing corporate or individual ecological foot prints.
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Conclusion
The SDGs offer an ambitious and wide ranging global vision for a sustainable future.
While the transition to such a future demands commitments from governments and all
sections of society as well as universal changes in mind-sets and behaviours, the United
Nations has called on businesses to play a central role in achieving the SDG’s. Here the
underlying aim is to connect business strategies to global priorities for people and the
planet. If the business community is to play its part in the transition to a sustainable global
future then it faces a wide range of fundamental challenges. How businesses address and
respond to those challenges will ultimately surely determine the success or failure of the
SDGs.
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TABLE 1 THE SUSTAINABLE DEVELOPMENT GOALS
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THE AUTHORS
Peter Jones and Daphne Comfort work in the Business School at the University of
Gloucestershire and David Hillier is an Emeritus Professor in the Centre for Police Sciences at
the University of South Wales.
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