- December 8, 2017
- Posted by: CSR-in-Action
- Categories: Feature Articles, Report
Author ~ Ebuka Onunaiwu
Whether you are a multinational, a medium enterprise or a Small and Growing Business (SGB), you need to take action on the SDGs, because it presents you with an opportunity to become a driving force for value creation and also because it is good for your business’ bottom line.
The Sustainable Development Goals (SDGs) or Global Goals is one of the most popular concepts in today’s world, adopted by the United Nations (UN) in 2015 to end poverty, ensure prosperity and equity, build better communities and tackle climate change. In another way, you can say that the UN-SDGs was developed and adopted to drive the international community towards the common goal of ensuring a better world.
The SDGs are pertinent to business objectives as they integrate the social, environmental and economic aspects of a business, thus making the private sector a crucial player in its achievement.
However, the important question is, how can businesses take action that will result in value creation and addition for their business and external stakeholders, as well as contribute to the Business and Sustainable Development Commission’s (BSDC) approach of “Better Business, Better World.”
For the purpose of explanation, I have categorised the process of integrating the SDGs to a business into 5 steps and have termed it “the 5 steps for the Global Goals”.
- Leadership commitment to build a sustainable business (Top-bottom approach)
Whether it’s an organisation, nation, idea, or a house, it is a popular theory that nothing stands on a faulty foundation. The leadership, management and board, of any organisation is the foundation of the business. Therefore, every business looking to act on the global goals will need to commit from the top. The major decision makers of the business will need to be in tune with, and direct the course of any action taken to integrate sustainability into every or any aspect of the business. Once this is achieved, the business may then choose to use either the top-down or the bottom-up approach to drive individual sustainability initiatives.
Leadership commitment to sustainability involves integrating the SDGs into the business strategy. It also involves building a sustainability competent management or board. This might involve holding SDGs training session(s) for the C-suite of the business, employing sustainability experts on the board and management, or obtaining the services of independent sustainability consultants. In the case of Ericsson, the company integrates the Global Goals into its strategy and top team decisions by assigning an ambassador from the executive leadership team to each of the 17 Goals. The result is the identification of new market opportunities and the alignment of profit with public good by Ericsson.
- Adopt a sustainability management system
A sustainability management system is a framework that defines an organisation’s approach to sustainability. It highlights the guiding principles and commitments of the business, how it identifies its material sustainability matters, how it manages these matters, set targets to reduce footprint and increase handprint, implement programs and engage stakeholders. The first step here is to setup a sustainability department or desk, depending on the size of your business. This should be followed by a sustainability assessment of the organisation’s activities (to identify material economic, governance, environmental and social risks and opportunities). ‘Material’ as used here, simply means the most relevant and significant issues for an organisation and its stakeholders. The findings will enable the business to identify areas of its business with the high impact and itemise what I call its high priority Goals with regards to the SDGs.
A functioning sustainability management system will include frameworks such as the United Nations the SDGs, Global Compact (UNGC) Principles, ISO 14000 Environmental Management System, ISO 26000 Social Responsibility Management, ISO 9001 quality management system, AA1000 Assurance Standards, AA1000 Stakeholder Engagement Standards, and the Global Reporting Initiative (GRI) Standards. However, this list is not exhaustive.
- Measure the right metrics
Again, it is popular saying that “you can’t manage what you don’t measure.” For the purpose of understanding, analysing and tracking the status of a particular project, there is need to measure the right metrics. If you are in the business of manufacturing, say the Fast Moving Consumer Goods (FMCG) sector, some of your major footprints will come from resource utilisation (water, raw materials and others) and emissions generation, which borders on Goals 9, 12, 13 and 15. Before you can take action on these Goals, you need to know your current usage (energy), emissions (gases), consumption (materials), and generation (waste), these will enable you to benchmark your performance against local and global regulations. This practice is often a win-win for the business as it provides an opportunity to reduce footprints as well as identify avenues for increasing revenue due to reduced operational costs.
However, this does not in anyway portend that metrics measurement is only essential for the environmental aspect of a business, it is equally important to measure economic and social metrics, in other to incrementally add value to the business. Metrics measurement is also a key component of monitoring and evaluation, impact assessment, and targets setting, all of which are key aspects of SDGs integration. With the right metrics, businesses can set achievable targets for each of the Global Goals.
- Influence your value chain
Every business has its value chain made up of a web of small, big, local and/or international businesses. A typical value chain includes partners, vendors, sponsors, competitors and regulators. Businesses have the opportunity to go beyond their internal processes and integrate the SDGs into their sector by working with third parties in their value chain particularly their vendors, partners and regulators.
For instance, Olam’s high priority Goals are SDGs 1, 2, 3, 10, 13, 15, (Please read about the SDGs to find out what these goals represent). One of the ways Olam acts on some of these Goals is by provide training, access to input and pre-finance to farmers. This has helped to increase the farmers annual revenue by 500% since 2008, and has in turn positively affected Olam bottom line. Also, by adopting better farming practices, both the farmers and OIam are able to collaboratively tackle climate change which poor agricultural practices largely contributes to. By acting on the Global Goals businesses will transcend from just profit generation to value creation in the immediate and long-term.
In some cases, the key players in a sector may decide to identify the high-priority Goals for the sector and collaboratively take action towards the Goals.
This is the final stage of the sustainability management process or the SDGs integration process. After a business must have taken action on the Global Goals, the business needs to articulate its actions and communicate them to its internal and external stakeholders using recognised non-financial reporting frameworks such as the GRI. The reporting process could be demanding but with creativity and commitment from the reporting team, the resulting report would add value to the reporting organisation. Also, the reporting process provides the reporting team with deeper insights about the sustainability activities of the organisation and the organisation’s contribution to the common goal.
Most organisations utilise the services of sustainability consultancy firms to assist in the preparation of the report. Also, reports are usually in hardcopy or softcopy format, but it is advisable to go with softcopy, so as to reduce cost as well as footprint.
By integrating the SDGs to a business’ strategy and processes, businesses set themselves up for long-term value creation. They show that it’s no longer business as usual, that they care for the larger society as much as they care for their financial position, and that they are willing to act responsibly as a good corporate citizen by taking action.
It is also important to state that the scale, simplicity and complexity of the integration process depends on the size of the business, and the level of commitment by the organisation. Therefore, this 5-step process is not exhaustive of the myriads of ways with which the SDGs can be integrated into a business.