Business needs the SDGs, and they need business … Embracing the UN’s 17 Global Goals is a $12 trillion opportunity for business by 2030
March 13, 2020
Over the past 30 years, the world has seen huge social improvements and technological progress. We have experienced unprecedented economic growth and lifted hundreds of millions of people out of poverty. We’re benefiting from a life-changing digital revolution that could help solve our most pressing social and environmental challenges. Yet despite these successes, our current model of development is deeply flawed.
Signs of its failure and imperfections in today’s markets are everywhere. Natural disasters triggered by climate change have doubled in frequency since the 1980s. Violence and armed conflict cost the world the equivalent of nine percent of GDP in 2014, while lost biodiversity and ecosystem damage cost an estimated three percent. We continue to invest in high-carbon infrastructure at a rate that could commit us to irreversible, immensely damaging climate change. Social inequality and youth unemployment is worsening in countries across the world, while on average women are still paid 25% less than men for comparable work.
Median real wages have been stagnant in developed economies since the 1980s, generating deep anxiety about the impact of automation on both service and manufacturing jobs and opposition to more globalisation. Real interest rates are historically low, even negative, in several major economies, while total debt remains uncomfortably high. Economic views lurch unpredictably between techno-optimism and political pessimism.
The resulting uncertainty makes it hard for business leaders to see the way ahead. Rather than commit to longer-term investments, many companies are treading water – sitting on cash, buying back shares, paying high dividends. The latest global report on trust in business from Edelman shows a double-digit decline in the credibility of CEOs in 80 percent of countries.
What else can business leaders do?
There is a positive alternative: setting business strategy and transforming markets in line with the UN Sustainable Development Goals by exploring the impact on business of achieving these 17 objectives, known as the Global Goals, which UN member states agreed to, initially called Agenda 2030, in September 2015. Nations committed to focus their policies towards achieving the Global Goals.
Achieving the Global Goals would create a world that is comprehensively sustainable: socially fair; environmentally secure; economically prosperous; inclusive; and more predictable. They provide a viable model for long-term growth, as long as businesses move towards them together. The goals are designed to interact, so progress on them all will have much more impact than achieving only some. Of course, the results will not be heaven on earth; there will be many practical challenges. But the world would undoubtedly be on a better, more resilient path. We could be building an economy of abundance.
These are results that business leaders will surely support. However, they are less likely to feel responsible for delivering them: one survey shows that half the business community think this is government territory.
However business really needs the Global Goals: they offer a compelling growth strategy for individual businesses, for business generally and for the world economy. Second, the Global Goals really need business: unless private companies seize the market opportunities they open up and advance progress on the whole Global Goals package, the abundance they offer won’t materialise.
The challenge for every business leader is to embrace the Global Goals for Sustainable Development into its core growth strategies, value chain operations and policy positions. In 2017 the Business & Sustainable Development Commission brought together business leaders seeking to define the business case for action.
Achieving the Global Goals, they say, opens up $12 trillion of market opportunities in the four economic systems examined by the Commission. These are food and agriculture, cities, energy and materials, and health and well-being. They represent around 60 percent of the real economy and are critical to delivering the Global Goals. To capture these opportunities in full, businesses need to pursue social and environmental sustainability as avidly as they pursue market share and shareholder value. If a critical mass of companies joins us in doing this now, together we will become an unstoppable force. If they don’t, the costs and uncertainty of unsustainable development could swell until there is no viable world in which to do business.
The business logic for sustainable development is that core strategy gets much stronger as the world achieves the Global Goals.
Achieving the Global Goals in just four economic systems could open 60 market “hot spots” worth an estimated $12 trillion by 2030 in business savings and revenue. The total economic prize from implementing the Global Goals could be 2-3 times bigger, assuming that the benefits are captured across the whole economy and accompanied by much higher labour and resource productivity. That’s a fair assumption. Consider that achieving the single goal of gender equality could contribute up to $28 trillion to global GDP by 2025, according to one estimate. The overall prize is enormous.
In 2019, 17 of the world’s leading companies came together as the The Business Avengers to better define the role that business can play and is playing in delivering the Global Goals throughout 2019 and 2020.
Each company represented one SDG in launching the campaign, whilst communicating internally and externally the importance of the SDGs overall, the opportunities that they represent, and the work that they are doing to help achieve them.
The campaign, supported by the World Business Council for Sustainable Development, The B Team,the International Chamber of Commerce and the World Benchmarking Alliance will be dedicated to driving awareness, collaboration and action from the private sector towards achieving the Global Goals by 2030. The Business Avengers include ARM, Coca Cola, Diageo, Google, Mastercard, Nike, Mars, Microsoft, SAP, Salesforce and Unilever.
They argue that the Global Goals cannot be achieved without businesses – through their core business, financial commitments, employee networks, consumer facing platforms and high-level influence they will play a pivotal role in accelerating progress. And that the goals are intrinsically linked to the future success and flourishing of organisations and businesses around the world.
A healthier, more peaceful, and more prosperous world matters to all of us. Every organisation and every person can play a role in achieving this future. The WBCSD linked with Futerra to create the Good Life Goals which are a set of personal lifestyle actions that people can take to help support the SDGs.
Example of how CEMEX has embraced the SDGs
CEMEX, the global cement business based in Mexico City, developed a Responsible Business Strategy that seeks to understand stakeholder expectations by managing impact and creating value through three priorities:
- Design and implement inclusive business models with social impact,
- Implement sustainable community engagement plans to improve quality of life,
- Design and co-create functional responsible business practices within our operation and with our value chain.
Fernando Gonzalez, the CEO articulated the company’s commitment to the 2030 agenda in 2015 saying “Our social initiatives aim to make cities and communities more inclusive, safe, resilient, and sustainable. By building strong, high-quality infrastructure, undertaking actions to combat climate change, and offering sustainable products and solutions, we contribute to the UN Global Compact’s Sustainable Development Goals and reinforce our commitment to building a better future.”
“We execute a global multi-stakeholder materiality assessment every 3-4 year, which we have taken into account to prioritize the 11 out of the 17 SDGs to which CEMEX contributes directly. SDGs 9 and 11, are particularly more related to our core business. Through the launch of various awareness activities and pilots, we aim to gather social intelligence that helps us inform our business decision-making and generate lasting impacts. The risk of inaction is simply too large, given that a growing number of investors and analysts agree that leading environmental, social and governance (ESG) practices can generate higher profitability and may be better long-term investments.
Executives were asked to take the “SDG challenge” and write a postcard to themselves stating what action they would take to be an “SDG mover”. These postcards will be sent back by the end of the year to remind them of the commitment they made to themselves to contribute to the SDG from their day to day responsibilities. CEMEX’s Integrated Report also guides readers on how the SDGs are embedded across various functions, and throughout this year we look to better understand what we measure in each geography in which we operate. The tracking of the SDG progress is supported by specific KPI’s.
Here is how CEMEX aligned itself to each SDG where relevant:
Are we making progress?
The 17 SDGs are defined in more detail through a framework of 169 SDG targets. Progress towards these targets is agreed to be tracked by 232 unique indicators. You can see a fabulous online tracker at Our World In Data, a resource created by Hannah Ritchie and Max Roser and run by the University of Oxford.
What can business do now?
The Business Avengers have created a Business Guide to help business leaders understand the actions you can take to support the Global Goals. Answer the questions and you’ll be guided to the right resources for you. They also recommend these steps:
- Step 1: Your Company … Assess the impact of your company against the seventeen SDGs, and identify related risks and opportunities across your entire value chain.
- Step 2: Your Leaders… Hold a meeting of the board (or the executive management team) to set goals and targets specific to your company that align with sustainable development.
- Step 3: Your Shareholders … Tell shareholders and other stakeholders the goals your company has set to contribute to the SDGs and progress made, also analysts and other influencers.
- Step 4: Your Employees … Engage all your employees in advancing the Goals through their own work and distribute responsibilities across the entire organisation for achieving progress.
- Step 5: Your Customers … Show your commitment by including SDG education and branding in your products, communication materials, and annual report.
- Explore the WBCSD’s CEO Guide to the SDGs
- Read the BSDC business case in their Better Business Better World report
- Explore more details and dilemmas in 15 Global Challenges
- Watch these inspiring videos Global Goals Films
- Use the Business Avengers’ Business Guide
- Use the WBCSD and UN’s SDG Compass
- And the WBCSD roadmap to 2030: SDG Essentials Roadmap
- BCG on the Total Societal Impact of SDGs and competitive positioning
- Morgan Stanley’s Institute for Sustainable Investing
- Track progress towards the 232 SDG Indicators at Our World in Data
- See benchmarks and rankings at World Benchmarking Alliance
- On inequality and poverty see Business Fights Poverty
- Align your efforts with Impact 2030
- More resources at the SDG Hub
- And there’s also my own book People Planet Profit