Sustainable Development Goals – What are they and why do they matter to your business

Sustainable Development Goals – What are they and why do they matter to your business

Luiz Beltrami

Sustainable Development Goals – What are they and why do they matter to your business

The Sustainable Development Goals pulled together governments, society, and the business sector in an unprecedented way to walk the same path – in the search for a more just, equal, and sustainable world. What do you think that really means ?

27 August, 2020

You likely have already heard of the Sustainable Development Goals or SDGs. It has been five years since their definition and a series of actions have been put in place to make them well-known and understood all over the world. Despite that, we still see some confusion about their meaning and their relevance to our daily lives, particularly to businesses. In this article, we will shed some light on that quest, from both a theoretical and a practical point of view.

Let’s start with a metaphor

If you have already checked our website you probably came across a depiction of a lighthouse. This visual metaphor is quite effective to understand the topic of the SGDs – No wonder we like it! A lighthouse’s main role is to mark dangerous areas and help boats navigate through them; the same way the SDGs were established, to guide governments and businesses towards the right direction, away from an unsustainable future, a result of climate change and social disparities.

The lighthouse as a metaphor to help us better understand the purpose behind the UN Sustainable Development Goals

Governments have the role of “regulatory bodies”, dictating the path where we are going and how. Businesses, on the other hand, should drive their vessels following these guidelines avoiding danger, towards sustainability. And when it comes to boats, we mean boats of all sizes – from huge transatlantic cruisers (representing large companies) – moving slowly although with a huge impact potential – to modern, agile and innovative sailers (start-ups), including those with fewer resources, but that can count on the strength and collaboration of their crew to row and get far together (the case of small businesses).

With this metaphor in mind, let us dive a bit deeper into the topic the SDGs.

Before the Sustainable Development Goals, there were the Millenium Development Goals

It is common for us to look back at our development as a society with a level of pessimism. Issues such as climate change and the current Covid-19 pandemic – which not only exposes but also exacerbates social inequalities around the world – may blur our vision even more for a better future.

However, it is undeniable that in recent decades we have made great progress. The Millennium Development Goals, a commitment made by 189 nations and 23 international organizations during The Millennium Summit, held in 2000 by the United Nations (UN), played a major role in that progress. The MDGs were 8 goals, with 21 targets and 60 indicators focusing on improving the living conditions of the poorest populations on the planet.

The Millenium Development Goals

There were, of course gaps in it, but with The Millennium Development Goals Report, the UN proved a series of positive achievements that is worth highlighting here. For instance, 20 years ago, when the MDGs were established, almost half of the developing world lived in extreme poverty. This number dropped by more than half, falling from 1.9 billion to 836 million in 2015, the final year of the proposed time frame for achieving the goals. Some other success stories of the MDGs are listed below:

  • The proportion of undernourished people in the developing regions has fallen by almost half since 1990
  • The primary school net enrolment rate in the developing regions has reached 91 percent compared to 1990
  • There were many more girls in school compared to 1990
  • Women have gained ground in parliamentary representation
  • The global under-five mortality rate has declined by more than half, dropping from 90 to 43 deaths per 1,000 live births between 1990 and 2015
  • The maternal mortality ratio has declined by 45 percent worldwide, and most of the reduction has occurred since 2000
  • New HIV infections fell by approximately 40 percent between 2000 and 2013 and there was a significant reduction in death rate by malaria and tuberculosis

In fact, in the last few decades we have shown progress on multiple fronts, among them the unprecedented level of economic growth. However, the same development model that has brought us here, also brought great environmental and social degradation. Despite the significant achievement, poverty reduction has been unbalanced in different countries, putting the next big goal in front of us – tackling inequalities. With the same urgency we have the responsibility to preserve our natural environment, that has been continuously threatened due to the relentless search for continuous and short term growth, as well as quick financial gains.

The emerging post-2015 development agenda, including the set of Sustainable Development Goals, strives to reflect these lessons, build on our successes and put all countries, together, firmly on track towards a more prosperous, sustainable, and equitable world.

Ban-Ki-moon, Former UN Secretary-General

Thus, from this positive experience of the adoption of common goals as a strategy of action, the Sustainable Development Goals were created, following from the MDGs. With a broader and more inclusive agenda, as well as the idea of ​​leaving no one behind, the 17 new objectives seek to eradicate poverty and promote a dignified life for all, within the limits of the planet.

This diagram presents the SDGs in relation to the concept of sustainable development Illustration: Azote for Stockholm Resilience Centre, Stockholm University

How do we come to this?

It all sounds almost utopian, and maybe you find yourself wondering what to do with all that information. We are absolutely on the same page with you, what has been written above might sound to be far away from your daily business reality. Knowing the history of the Goals helps us grasp their magnitude and importance but does not teach us much about the role we play, as individuals or businesses, in their success.

So, let us start with two important points

  • The creation of the Sustainable Development Goals is unprecedented in terms of collaboration. Its definition was based on a combination of open consultations and global research, coordinated by the UN. More than 1.4 million people have contributed in person or using the online platform My world. They were from more than 190 countries, between governments, civil society, the private sector, universities, and research institutions.
  • The SDGs, unlike the Millennium Goals, explicitly include the private sector as fundamental stakeholder in solving sustainable development challenges. This is no surprise since the private sector is a driving force for economic development and job creation, being responsible for 84% of Global GDP and 90% of job opportunities. On the other hand, it is also a major exploiter of natural resources, generating social and environmental impacts, both positive and negative.

Why are the Sustainable Development Goals important for business?

We need business leaders to use their enormous influence to push for inclusive growth and opportunities. No business can afford to ignore this effort, and there is no global goal that cannot benefit from private sector investment.

António Guterres, Secretário Geral da ONU

It is easy to see how the SDGs can benefit from companies. Based on the motto “leave no one behind”, the UN reinforces the idea that this agenda is for all and that no single sector will be able to achieve it alone. We need to think of the private sector as what makes “the wheel spin”, not only economically, but due to the great power it has to influence habits, behaviors, and trends. It is also the sector with the greatest potential for disruptive transformation and innovation.

And the other way around, how can businesses benefit from the Sustainable Development Goals?

In my view there is a vision for the world that stands out from all previous proposals and should be the main mission of all affected parties: the construction of a more just and equal world, with dignified life and opportunities for everyone within the limits of the planet. Unfortunately, that is still not the dominant language in the business world. The most obvious advantage companies ride is the positive image and the strengthening of relationships with the different stakeholders (employees and consumers, mainly). However, it should not end here. Taking it on a  more ‘businessy’ narrative, there are vast financial and market benefits for businesses if they adopt the SDG as strategic guideline.

A report published by the Business and Sustainable Development Commission in 2017 shows that the SDGs could provide 12 trillion dollars per year worth of market opportunities for the private sector until 2030, generating more than 380 million jobs along the way. Also, a recent McKinsey study suggests that mobilizing €75 billion to €150 billion of capital for a post-pandemic green recovery could yield €180 billion to €350 billion of gross value added, generate up to three million new jobs, and enable a carbon-emissions reduction of 15 to 30 percent by 2030. Not to mention that investors are increasingly focusing on companies’ Environmental, Social, and Corporate Governance (the famous acronym ESG) performance along the financial results during their decision-making process.

Another benefit that must be considered is the reduction of risks. Any negative impact a company may induce on the planet or society can cause damage to the brand’s reputation, in the form of regulatory fines (compliance with laws and regulations), or risks arising from the effects of climate change (droughts, floods, forest fires etc). Imagine a scenario where the resources your business relies on are increasingly scarce, by looking for innovative and more sustainable alternatives for raw materials (leather, rubber, etc.), you will become less exposed to price fluctuations and shortages, thus create more resilience.

But how do I do it?

Lastly, and possibly more importantly, how do I link my company’s strategy with the SDGs? There are several guidelines, researches, case studies available online discussing the path towards sustainability. The greatest reference might be the SDG Compass Guide, developed by the Global Reporting Initiative (GRI), the UN Global Compact, and the World Business Council for Sustainable Development (WBCSD).

According to this guide, there are 5 steps for a business to align its strategy with the SDGs. The good news – if you managed to read this post up to here, you have already completed step 1. Well done! Starting by understanding what the Sustainable Development Goals are, as well as their relationship with the business environment is important to recognize the opportunities and responsibilities related to your business.

5 steps for applying the Sustainable Development Goals to your business strategy
The five steps of the sustainable path according to the SDG Compass

In step 2, Defining Priorities, to determine which SDGs should be your priority the Compass suggests to focus on the negative impacts first as part of your analysis. It also highlights the importance of sector and country context, do your research where your business can do more harm and have opportunity for positive impact. You can also prioritize the Goal (or Goals) that is closest to the company’s core business, which might make immediate sense for social businesses, but it works well elsewhere, too. A standard practice to make sure you tackle the issues that really matter is to use a materiality matrix (impact vs effort), this step is crucial for the successful implementation of sustainability measures at small and medium size businesses, since their limited resources (time, money, people) might call for the most feasible actions only. The above is the exact approach we propose at the 4D Sustainability Canvas during our workshops.

Our methodology was developed based on the approach of the Compass Guide, just presented in a more hands-on way. In addition, it includes collaborative elements in the first step – mapping the company’s impacts with the 4D Sustainability Canvas –, as well as, at the time of definition of goals, so the responsibilities are distributed by and within the team and not top-down on a leadership level.

Targets and Indicators

There are many possibilities for creating strategic actions. Here are some examples:

  • Designing a policy for the selection of suppliers with environmental and social responsibility criteria, among those waste management, use of sustainable materials, respect for human rights, diversity should be taken into account. In this case, the impacts can relate to several SDGs (#5, #8, #10, #13); It depends on the established criteria. The specific indicator would be the creation of the policy itself, which can happen inclusively, taking the voices of different employees (especially those from minority groups) into account;
  • Increase the number of women in the company in general, and/or make it equal to the number of male employees; Increase (and/or make it equal) the number of women in management positions; Equal and transparent wages for men and women. All these initiatives concern SDG 5, Gender Equality. Progress can be measured from the ratio of men to women (initial and desired);
  • Implementation of circular design principles during production. Control can take place on several fronts, such as tons of reused waste or quantity of products made from reused material sold (SDG 12);
  • Reduction or total elimination of plastic material from products and/or packaging, a goal directly linked to SDG 14. It can be easily measured by the amount of plastic (in % or Kg, for example);
  • Creation of affirmative policies for recruiting processes, prioritizing the hiring of people from minority groups (black, LGBTQI+, refugees), with a focus on reducing inequalities (SDG 10)

You can find other possible tips by exploring our Action Cards with the SDGs.

The Sustainable Development Goals List

The 17 Sustainable Development Goals
The 17 UN Sustainable Development Goals

To conclude, here is a list of the 17 SDGs. Click on each goal to know a bit more about them.

  • Goal 1. End poverty in all its forms everywhere
  • Goal 2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture
  • Goal 3. Ensure healthy lives and promote well-being for all at all ages
  • Goal 4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
  • Goal 5. Achieve gender equality and empower all women and girls
  • Goal 6. Ensure access to water and sanitation for all
  • Goal 7. Ensure access to affordable, reliable, sustainable and modern energy
  • Goal 8. Promote inclusive and sustainable economic growth, employment and decent work for all
  • Goal 9. Build resilient infrastructure, promote sustainable industrialization and foster innovation
  • Goal 10. Reduce inequality within and among countries
  • Goal 11. Make cities inclusive, safe, resilient and sustainable
  • Goal 12. Ensure sustainable consumption and production patterns
  • Goal 13. Take urgent action to combat climate change and its impacts
  • Goal 14. Conserve and sustainably use the oceans, seas and marine resources
  • Goal 15. Sustainably manage forests, combat desertification, halt and reverse land degradation, halt biodiversity loss
  • Goal 16. Promote just, peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
  • Goal 17. Revitalize the global partnership for sustainable development

We hope you enjoyed the reading and that you gained a better understanding of the 17 UN Goals. Moreover, that you are now able to navigate your boat on the ocean of SDGs with more confidence. Do not worry if you feel like you’re not ready to take these steps on your own. We are here for you! Just get in touch and we will support you on your sustainability journey. Share Receive our news