Updated: Dec 29, 2020
Businesses are a reflection of society and a volatile world is forging a new sort of business enterprise. Businesses are no longer expected to be vehicles of profit but co-weavers to a desired social fabric.
This social fabric is intended to be the enabler of sustainable cities and communities and is expected to be woven with reinforced threads that secures the viability of the world’s future. Business like people, require a hospitable world to survive. Its role in an collaborative effort must therefore be underscored.
In 2015, all 193 Member States of the United Nations unanimously adopted Agenda 2030, which contains 17 Sustainable Development Goals (SDGs).
These goals were intended to improve the lives for all and focus on social issues, such as injustice, poverty and education, and environmental issues, such as climate change and biodiversity. They also focused on economic growth, reduction of inequalities, and innovation.
The business enterprise is one of the main actors in sustainable development. Its impact is felt in how its returns value to its shareholders and stakeholders.
Its mission, location, output of operations, values, hiring practices and even how it rewards, or disciplines staff sets the tone for whether the company is having a positive or negative impact on its community. It is therefore incumbent on business to align their policies with the sustainable development goals.
"The art of life lies in a constant readjustment to our surroundings.” Kakuzō Okakura, The Book of Tea
Businesses do not only benefit from an improved reputation. They benefit by improving stakeholder relationships, reducing costs and gaining a deeper understanding of its markets. They also benefit by generating new sources of revenue.
As consumer preferences shifts to responsible products, business have an opportunity to adjust their offerings to match that need. 91% of global consumers believe that it is companies’ responsibly to address social and environmental issues.
They are likely to switch brands to one affiliated with a good cause if the quality and price are similar.
As such it is also incumbent on companies to choose suppliers that are also managing their social impact.
Corporate Citizenship is also a criterion being used in the talent market. By adopting the right value, businesses are better positioned to compete for scarce technical and professional skills.
It is also easier for them to access financing through impact investing and mitigate against political and regulatory risks.
Here are 4 ways that businesses can pursue the SDGs?
1. Take Responsibility
Businesses should first accept that they have a role to play in the word achieving the sustainable development goals. The UN Sustainable Development Goals (SDGs) are important tenets that can ‘transform the world for the better’. It is therefore appropriate that businesses first understand then embed these considerations into their strategy and demonstrate that they support the global community’s priority objectives.
2. Self Analysis
The Business must then understand its business model and map it to the SDGs. Self Analysis should yield an understanding of its value chain capturing its internal and external processes. In this way, the business would understand how its actions are contributing positively to the SDGs. It would equally understand through the mapping exercise how it is compromising its achievement.
Employers take for granted that they are managing their operations responsibly. However, if they map their operations to the SDGs, their perspective will change. Let’s take for example the rights of their employees. When mapping their employment practices to the SDGs, they would now be more constructive in how they improve labour conditions, craft diversity policies and determine fair wages.
Instinctively businesses also understand that child labour is wrong but when SDG considerations are embedded into their strategic process, they would now be incentivized to look further along their circle of influence. They will be better positioned to screen potential partners and probe their supply chains to ensure there are no human rights breaches.
3. Choose a goal
Business should then prioritize and identify the most appropriate goal for their businesses and allocate resources to ensure that sustainability efforts are progressed. The goals must not only make sense for the business but also authentically align to the company’s brand, core values and stakeholders.
In choosing the goal, the business must be able to articulate how their response to the goal is being reflected in their services and operations. It must also be able to demonstrate how implementation of the goal will enhance their business operations and community. As a priority, it should link to the most material impact the organization is having on stakeholder and wider community in terms of scale and scope.
Scale being indicative of the level of severity and scope implying the number of individuals affected. For example, a petrochemical company may want to focus on how it manages its waste. It can therefore develop a program to increase feedstock utilization to reduce generation of waste. A clothing company may want to focus on sustainable fabrics and ensuring that its supply chain does not utilize under aged workers.
4. Practice Transparent Operations
The public including shareholders are demanding that companies declare how their operations are impacting society. This has manifested itself in security exchange filings and in corporate sustainability reports. According to the UN, 72% of global companies are now mentioning the goals their annual reports. 50% have identified a priority to the SDGs. The goals that are favored by these entities include #8: Decent Work and Economic Growth, SDG #13: Climate Action and SDG #12: Responsible Consumption and Production. Others also require need attention.
Sustainability reports should express how businesses are working to improve their negative impact. It should also reference the positive contributions that are being made. Crucial to this type of reporting is identification of current and potential risks of their operations to society and how they intend to remediate.
Companies must also be particularly careful that they are not meeting the objectives of one SDG goal whilst violating the requirements of another. It may be easy for employers to focus on renewable projects as it is topical, but they ought to be mindful they are not perhaps underpaying employees or preventing freedom of association.
Making a social impact will come at a cost but in time the value created will far exceed the pain.
Profit at the expense of mankind, is a dish no enterprise should ever be tempted to taste.
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