The SDGs are a ‘lens’ through which business can translate global needs into viable business solutions. The guide leverages heavily on the Business and Sustainable Development Commission’s report titled Better Business; Better World. You can find the key points of the report in this post. Essentially, the report makes a compelling business case for businesses to capitalize on the $12 trillion a year opportunity presented by achieving the SDGs.
At the very least, businesses should strive to not hinder the agenda of the SDGs, for example, ensuring that operations do not infringe on human rights, etc. Despite all the calls for business to work towards achieving the SDGs, the World Business Council for Sustainable Development (WBCSD) recognizes that business alone cannot achieve it. What is needed is cross sectional collaboration, good governance, economic incentives and appropriate legal and institutional frameworks.
There are four key options for businesses when it comes to their response to the SDGs:
Inaction/do nothing:
Doing nothing will be costly given that the regulatory trend across the globe is slowly but surely aligning with the principles of the SDGs. What’s more, many forward-thinking companies (many of which are startups today) are bring disruptive models in the marketplace!
Capture opportunities:
Studies show that the SDGs present a $12 trillion a year opportunity in markets across food, cities, energy and materials, and health and well-being. And other markets will present additional opportunities. Companies that can access these markets are likely to grow economically while addressing some of the world’s biggest problems. Also, companies that can show clearly how their strategies are aligned with the SDGs can make a more compelling case to work more closely than competitors with governments (which brings additional opportunities). Also, such companies can improve the dismal trust the public and communities have for businesses in general (80% of Edelman’s surveyed global respondents do not trust CEOs) and thus improve their social contracts/licenses to operate.
Governance and transparency:
Companies can work towards translating the SDGs into a language that is understood by their corporate governance – e.g. by using already mainstreamed risk management models and frameworks. What’s more, companies can attempt to price and integrate externalities into their operations – i.e. taking into consideration social and environmental impacts into the costings and pricing so that they can make more accurate and well-rounded business decisions.
Collaboration:
Innovations and changes by a few companies will not achieve the SDGs. What is needed is big changes from everyone, across sectors and industries. As such, industry/sector collaborations are essential so that changes reach ‘critical mass’ and all companies remain competitive as they equally take on the costs of these changes. Partnerships with governments are also needed to drive Public Private Partnership (PPP) funding models towards the achievement of the SDGs.
Actions to take:
WBCSD clearly outlines their recommendations for business’ action towards engaging with the SDGs. These are shown in the snapshot below.
For more information, find out what the WBCSD is doing with the SDGs here, and download the full Guide here.