How Firms Can Use the Sustainable Development Goals to Inform EH&S and Sustainability Practices
In late-September 2015, the United Nations General Assembly of 193 countries formally adopted 17 Sustainable Development Goals covering 169 targets. The SDGs and related targets aim to tackle ambitious global sustainable development challenges and replace the Millennium Development Goals which are set to expire at the end of 2015. With a 15-year time frame and a diverse set of ambitious targets, what are the potential implications for business strategy?
First, filter the sustainability goals to prioritize issues relevant to each of your stakeholder audiences. In recent years, materiality assessments have encouraged firms to focus on issues that are most likely to impact financial bottom-line and societal well-being. Verdantix believes that firms should push materiality further to better understand how each stakeholder group perceives and prioritizes different issues listed. For example, a bank reporting on its carbon footprint via CDP questionnaire can be seen as an essential and positive step by NGOs, but leaves an equity analyst cold since there is no material financial impact to the firm’s cash flow.
Second, use the UN sustainability targets as inspiration for long-term stretch goals. Witness firms such as Dow Chemical, Mars and Unilever who have recently announced goals covering workplace gender equality, use of clean energy and the valuation of natural capital to name a few. The World Resources Institute has also introduced science-based targets to help put firm footprint reductions in the context of climate science.
Third, translate sustainability-inspired brand values into tangible short-term outcomes. This is what most firms will likely find most challenging. To ground the target-setting process with data-driven facts, firms should adopt a centralized EH&S software system to run forecasts, automate data collection and improve operational excellence. With steadily increasing voluntary and mandatory reporting requirements, Verdantix anticipates that EH&S IT strategies will increasingly be leveraged by sustainability counterparts to fulfill communication and programme needs such as tackling survey fatigue.
Thoughtful review of the sustainable development goals will help firms consider the full issues they can address within their sustainability and EH&S practices. While terminology for ‘sustainability’ issues can be confusing, firms should seek to simplify the jargon and categorize efforts into four segments: 1. The NGO-driven agenda of reducing negative environmental and social impacts on society, 2. The management of brand and financial risks as well as regulatory compliance, 3. Revenue generation from potential new market opportunities and 4. Maintaining a long-term license to operate.