Week of 29 June 2020
With a decade left to achieve the 2030 UN Sustainable Development Goals, businesses have made progress in creating internal awareness and setting goals on climate and decent work, but struggle to integrate the SDGs into their core business strategies and create ambitious, targeted goals for social goals. The UN Global Compact launches an urgent call to action with specific asks of all companies for the next ‘Decade of Action’
The UN Global Compact (UNGC), in collaboration with DNV GL, published its 20-year progress report, Uniting Business in the Decade of Action: Building on 20 Years of Progress. The report marks the 20th anniversary of the UNGC and the 5th anniversary since the launch of the UN Sustainable Development Goals (SDGs). In light of these milestones, the UNGC reports on progress towards its vision “to mobilize a global movement of sustainable companies and stakeholders to create the world we want,” including progress towards meeting the objectives of the SDGs.
Based on a variety of data sources, including interviews with 40 different business leaders (most at the Chief Sustainability Officer-level) across sectors and countries, the report shares findings on business contributions to the SDGs across all sectors, including the below takeaways:
Business leaders call for an operating environment that “incentivizes SDG action”:
- Policymakers should develop regulatory frameworks to level the playing field for businesses and “distribute the cost of innovation more fairly among actors in the system.”
- A key obstacle for companies to take action on the SDGs is a lack of “science-led regulation and public policy.” Interviewees say companies need to be involved in policy decisions that affect them in order to ensure that targets are both achievable and sufficiently ambitious.
- Consumer demand for sustainable business practices could “generate the right market signals for businesses to respond to across the value chain.”
The finance industry is needed to incentivize and fund innovation and action towards the SDGs:
- “More engagement by the finance industry to incentivize and fund innovation that supports business SDG action is required.” Companies operating in the telecommunications and technology, mobility and transport, and healthcare and life sciences systems in particular noted the need for specific financing to support the delivery of the SDGs.
There is a gap between company commitments to the SDGs and company implementation:
- Although 84% of respondents are aware of “the scale of the challenge and the ambition required to meet the SDGs by 2030,” only 46% say that their core business strategy is aligned with the SDGs.
- Many companies find it challenging to set appropriately ambitious commitments towards the SDGs, in part because SDG targets and indicators are directed towards governments and are not easily translated and operationalized by the private sector.
- Companies are also “unclear on how their individual actions and outcomes contribute to wider sector-level progress and ultimately relate to systemic progress towards the SDGs,” suggesting that there is more to be done to help businesses understand their contributions.
Companies prioritize SDGs that have a clear link to business, but struggle to set targets for SDGs without a clear connection to their business:
- According to the UNGC survey, most companies prioritize goals on Climate and Decent Work and Economic Growth, as they are easily quantifiable and clearly linked to business activities.
- Less tangible goals (such as Life on Land, Reduced Inequalities, Zero Hunger and No Poverty and other social goals) are not as commonly taken up by companies. A number of surveyed companies, particularly in the financial services sector, called for “more clarity and simplification of sustainability frameworks to measure impact on delivering the SDGs, especially if action on social goals is to take place.”
The UN Global Compact concludes that “businesses urgently need to accelerate transformation towards a sustainable future and address the interconnected and growing challenges to health and well-being caused by inequality and climate change.” They issue an urgent call to action for the next “Decade of Action” to meet the 2030 SDGs, and call on all companies to (1) fully integrate the UNGC principles, (2) raise SDG ambitions and (3) advocate for ambitious policies and engage in collective action.
Here are the ten business benchmarks for the upcoming Decade of Action:
When it comes to collective action, the UNGC states that “the change we need to see in the Decade of Action will not happen through incremental improvements and adjustments to ‘business-as-usual’. Along with these ambitious changes, we need more CEOs to advocate for SDG-aligned policies and influence national plans to deliver the Paris Climate Agreement by illustrating their own ambitious commitments. Only by working together — across business, finance, civil society, UN and Governments — will we be able to tackle the world’s biggest challenges.”