Think Globally, Act Locally: Four Steps Private Enterprises Can Take towards Contributing to Achieving the SDGs

Introducing suggestions on how firms of all sizes, SME and regional firms in particular, can engage with the 2030 Agenda for Sustainable Development

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This guide provides suggestions on how firms of all sizes, SME and regional firms in particular, can engage with the 2030 Agenda for Sustainable Development. It offers a four-step process for creating meaningful alignment between core business operations or corporate giving strategies with the United Nation’s 17 Sustainable Development Goals.

Key Takeaways

  • The 17 SDGs may signify global aspirations, but they are to be achieved through localized action that, when aggregated, yields large-scale results. Companies of all sizes and across all industries can, and must, engage with the agenda to create the grassroots momentum that becomes the foundation of large-scale progress towards the goals.
  • Progress towards achieving the SDGs starts with firms acting in a responsible manner. Firms can then further contribute to achieving the SDGs through creating alignment between their own activities and the goals themselves.
  • The four-step process to align corporate practices or giving with the SDGs includes: 1) familiarise, 2) prioritise, 3) integrate, 4) communicate.
  • Real contributions are made by creating alignment at the detailed target level. To obtain a true sense of what is to be achieved, firms must invest time and effort in gaining an understanding of the underlying SDG targets and the current local situation.
  • Most firms begin the alignment process by first creating a subset of SDGs and targets that will drive initial efforts.
  • Firms then integrate the priority SDGs into corporate practices or philanthropy by either 1) identifying benchmark policies, strategies, programmes, and procedures and adjusting what is already implemented, or 2) by innovating and implementing new ones.
  • As SDGs are integrated into corporate operations or giving, firms should set their own internal targets and establish a means of measurement in a way that is locally relevant to the global target.                               
  • Communicating should be done internally and externally, and can include progress reporting of interim and final results, advocating for the engagement with the goals, highlighting partnerships and collaborations, etc.

Introduction

In 2015, the United Nation member states drafted the 2030 Agenda for Sustainable Development and voted unanimously to adopt the 17 Sustainability Development Goals (SDGs). Unlike previous efforts, the SDGs are much more than a collection of siloed efforts to improve economic, human, and social development in low-income nations. The current 17 goals are interconnected, and together they form a comprehensive framework laying a clear path for the global community, rich and poor nations alike, to move towards lasting peace, prosperity, and a sustainable shared future. The SDGs are characterised by 169 ambitious associated targets set to be achieved by 2030. Progress is periodically measured via 200+ indicators.

Figure 1: The 17 Sustainable Development Goals
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Although the SDGs were ultimately agreed upon by government stakeholders, they were developed through the most inclusive consultative process ever carried out in the history of the UN, and achieving them requires similarly broad multi-sector ownership and strong commitment by all. It is a widely-held misunderstanding that the private sector is merely a bystander in the march towards the SDGs. Many firms are under the incorrect assumption that they can only peripherally contribute towards the SDGs by donating to NGOs that work directly in the 17 areas addressed by the goals. Further, many smaller firms often assume mistakenly that without large philanthropic budgets they cannot contribute towards achieving these goals at all. This simply is not the case.

The proceeding guide offers suggestions how firms can contribute towards meeting the goals.

Fundamentals

The Millennium Development Goals (MDGs), predecessors to the SDGs, featured 8 goals focused almost exclusively on solving issues facing developing nations. They were developed primarily by a small group of experts and relied heavily on funding provided by governments and institutions in high-income countries. Unlike the MDGs, the 17 SDGs are expansive and relevant to stakeholders in both high and low-income nations. They are less about mobilising resources from rich to poor nations and more about catalysing systemic change at all levels of the global community.

The SDGs are simply too big to be achieved by government alone. They were crafted through a vastly inclusive multi-sector consultation process and are, by design, intended to be achieved through engagement of the entire global community. More importantly, the SDGs are meant to be achieved from the ground up and not from the top down. Achievement depends most heavily on small contributions from many actors. Even progress monitoring for the goals is inclusive and casts a wide net. The SDG monitoring system aggregates self-reported contributions from thousands of sources, further signalling that the goals were meant to be won primarily though the actions of smaller non-government actors.

A major actor driving private-sector support for the development agenda is the UN Global Compact. The Global Compact was established in recognition of the fact that private firms are fundamental to achieving development goals and that progress starts with firms acting in a responsible manner. The Global Compact has a dual purpose. It firstly encourages companies to align their core operations with ten principles in the areas of human rights, labour, environment, and anti-corruption. It is then charged with promoting companies to become aware of, and take action towards, the 17 SDGs.

Unfortunately, much publicly available guidance for the engagement of businesses with the SDGs is geared towards large multinational firms, leaving smaller firms out of the current conversation. This omission perpetuates the common misunderstanding that SME or regional companies can only marginally contribute towards the SDGs through donations and CSR campaigns, when in fact localised private enterprises are vital stakeholders in achieving the SDGs. These firms can contribute through creating alignment between their own activities and the SDGs themselves. There are two primary areas of alignment:

  1. Core Business Policies & Practices: Align core business policies and practices with the principles espoused by the SDGs
  2. Corporate Giving: Align corporate giving with programmes and organisations whose impact move the dial towards meeting SDG targets

Firms can then facilitate that alignment via a four-step process that will be detailed later in this guide.

Figure 2: Two Areas of Alignment Through Which Firms Can Contribute to the SDGs
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Alignment Area 1: Core Business Policies & Practices

The SDGs outline aspirations for peace, prosperity, and sustainable living. At first glance these aspirations might seem lofty and far removed from the day-to-day operations of many firms, but it is precisely the small improvements in day-to-day activities that will bring the global community closer to achieving these goals. Human resources, procurement, supply chain, production, finance, investment, and other practices are just a subset of full value-chain business functions that are prime areas for SDG alignment.

Aligning core practices with the SDGs can feel like a large and daunting undertaking, and in some cases, it is. However, rewards are equally significant given the interdependent nature of the SDGs. Similar to a ‘hub and spoke’ framework, it is often the case that a single business practice touches several goals. For example, if a firm’s HR policies are directly related to SDGs 5, 8, and 10 which respectively address gender equality, workplace protection, and reducing inequalities, it does not mean that the  HR policies can’t also touch on other goals with a less obvious relationship. For example, SDGs 1, 2, 3, 4, which refer to poverty, hunger, health, education, and working conditions, respectively, are peripherally related to HR practices because wage scales and compensation benefits offered by a firm all impact an employee’s ability to access these basic necessities.

Figure 3: Hub and Spoke Framework for Aligning Core Policies and Practices with SDGs
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All business functions offer opportunities for alignment with the SDGs. Re-evaluating the corporate travel or workplace policies to favour telecommuting can help both to limit CO2 emissions and contributes toward SDG 10 focused on sustainable cities and improved air quality. Updating procurement policies with more rigorous due diligence on supply chain partners to ensure vendors pay fair wages, avoid child labour, and offer safe work environments all align with SDGs 1, 2, 3, and 8. Simple practices like providing filtered tap drinking water instead of supplying plastic bottled water in offices, restaurants, hotels and others helps reduce the health and environmental dangers of single use plastics, and aligns with SDGs 3, 14, and 15.

Alignment Area 2: Corporate Giving

As of 2019, corporate foundations funnelled most of their SDG-aligned giving towards the goals associated with improving health, education, sustainable communities, decent work, and the eradication of poverty. While some areas garner more support than others, with such a broad array of issue areas covered by the 17 goals there are unlimited opportunities to align corporate giving campaigns with the SDGs. Aligning existing or identifying new sponsorships, grants, or even bespoke programming can drive impact towards the goals.

At the time the SDGs were drafted, partnerships were recognised as an efficient and effective means of contributing towards the goals. Sustainable Development Goal 17 was adopted to encourage partnerships, including grant-making and sponsorships, to promote multi-sector collaborations. The United Nations administers a platform to register voluntary commitments towards SDG-related programming here. Firms who engage grantees and other partners to carry-out cooperative work are especially encouraged to officially register their activities so robust pooled contributions can be counted and learning can be shared.

Aligning corporate giving with the SDGs can also follow the ‘hub and spoke’ framework previously introduced. For example, a corporate giving programme building wells in rural villages can support more than just SDG 6 focused on ensuring the availability and sustainable management of water and sanitation for all. Access to clean well water helps communities avoid water-borne diseases, and so the programme peripherally aligns with and supports attaining SDG 3, ensuring healthy lives. Local wells also negate the need for children to miss school to instead walk long distances to collect fresh water, meaning the programme peripherally supports SDG 4 by affording young people, particularly girls, the freedom to devote more time to education and attaining literacy.

Figure 4: Hub and Spoke Framework for Aligning Corporate Giving with SDGs
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Even corporate foundation endowments or investment portfolios whose sole purpose is to generate funding that sustains giving programmes can be aligned with the SDGs. Investing in mission-driven businesses, sustainable equity funds, or innovative start-ups commercialising SDG-related technology are just a few examples of how financial portfolios, no matter how modest, can be leveraged towards SDG achievement.

The Four-Step Process to Driving SDG Alignment[1]

Regardless of where the journey starts, be it aligning core business practices and policies, aligning corporate giving, or attempting both, firms can make the process more manageable and improve their chances of success by utilising a four-step process.

Figure 5: Four-Step Process to Drive SDG Alignment
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Step 1: Familiarise

True alignment does not begin and end with the 17 high-level goals. Real contributions are made by creating alignment at the detailed target level. In order to obtain a true sense of what is to be achieved, firms must invest time and effort in gaining an understanding of the underlying targets and the local circumstances. Firms who fall short on the familiarisation process can only loosely align themselves to the simplified global goals. Five years into the SDG timeline, this loose alignment is no longer acceptable. These firms, can be accused of ‘SDG Washing’ or a superficial form of engagement if they don’t have an understanding of, or link to the detailed SDG targets.

Educating and engaging employees and other internal stakeholders is also an important part of the process. Employees who are versed in the goals are key to maintaining internal commitment. Firms may wish to develop their own internal collateral clarifying the SDGs and the role the firm will play in supporting their achievement. Alternatively firms can utilise existing resources to inform and engage employees provided by the Impact 2030 platform here.

Step 2: Prioritise

While it is ideal to create some level of alignment with all 17 important goals, this is a substantial request and most firms will begin by first prioritising or creating a subset of the goals and related targets that will drive initial alignment efforts. Upon familiarisation with the goals and targets, a firm should first look to its mission and vision for areas of priority. It can then look across the entire value chain or corporate giving portfolio for opportunities to minimise negative impact or increase positive impact of the business on the SDGs. A firm can then further prioritise the SDGs by considering local needs, stakeholder interest, the level of effort involved, or resources available. Prioritisation should be treated as more than simply a list-making exercise. Employing the hub-and-spoke framework and investing effort during the prioritisation process can help a firm identify many areas of peripheral engagement or ‘quick wins.’

Step 3: Integrate

Firms then integrate the priority SDGs into corporate practices or philanthropy by either 1) identifying benchmark policies, strategies, programmes, and procedures and adjusting what is already implemented, or 2) by innovating and implementing new ones. The Global Compact, in partnership with KPMG, published the SDG Industry Matrix which illustrates how firms can integrate priority areas of opportunity. The Industry Matrix highlights success stories across many firms and all seven guides are available here. The International Chamber of Commerce also offers a guide on how businesses can integrate SDG aligned practices here.

Innovation either in terms of either commercial products and services or as and output of corporate giving is an area that is ripe for SDG alignment but also for business growth. The SDGs specifically call on the private sector to spearhead investment and technology transfer for innovation in the areas of affordable clean energy and healthcare technologies. The goals also suggest that firms extend their reach to previously underserved communities. Aligning with the goals not only promotes entry into untapped markets, but helps firms better connect with consumers that increasingly insist upon sustainable business practices.

Each of the Sustainable Development Goals has associated targets and indicators, and it is good practice for individual firms to follow suit. As SDGs are integrated into corporate practices or giving, firms should set their own internal targets and establish a means of measurement in a way that is locally relevant to the global target. Doing so supports more than just reporting. Collecting, using, and sharing information around a firm’s commitments and progress can play a central role in driving tangible contributions, raising awareness, communicating success, and calling for partners. Firms may be tempted to set targets based on past performance or industry standards; however, targets should be set based on the needs within the community. Issue areas that are particularly problematic should be assigned ‘stretch goals’ to hasten progress.

Step 4: Communicate

Communicating about SDG commitment and alignment is essential to creating and maintaining momentum towards achieving the goals by the 2030 deadline. Communicating should be internal and external, and can include progress reporting of interim and final results, advocating for the engagement with the goals, highlighting partnerships and collaborations, etc. Sharing progress and recording data is not only important to track contributions but also to establish a baseline for the next round of goal setting scheduled for 2030.