The Sustainable Development Goals (SDGs) ushered in a new and bold global development agenda. They provide a framework for economic growth that protects the fundamental pillars of humanity and the planet. They are also a rallying call for all actors in society, not just governments, to take shared responsibility for a better future.
The private sector can be instrumental in speeding positive social impact and reducing negative impact to the environment and society.
Business has the potential to be a catalyst and accelerator of sustainable development around the world and can contribute to the 2030 Agenda. The private sector is increasingly seen as a valuable player, awareness of the SDGs among companies is growing, and governments are looking at ways to track and measure progress on SDGs.
Also, without the support of business and the private sector, there is the potential to fall short of our global commitment to achieve each SDG. It is estimated that trillions are needed to achieve all the SDGs by 2030, which means the Goals cannot be achieved by governments or with public financing alone. According to the World Bank, current development assistance available is close to $135 billion a year (World Bank, 2015). Domestic resource mobilization (DRM) and private financing are needed to fill the gap, and monetary and human resources must be mobilized at scale, which is something businesses are in a better position to do.
One of the tools available to business is sustainability reporting. This is the practice of public reporting by organizations on their economic, environmental and social impacts. It is a process by which organizations identify their significant impacts and disclose them in accordance with a standardized framework. Reporting enables more informed decisions concerning the relationship of the organization’s activities and its impact on sustainable development.
This practice is already used by companies to improve performance, account for impact, and publicly communicate sustainability data. And the information derived from the reporting can be used to help governments understand how businesses interact with and support the achievement of the SDGs, through data on sustainable development impact. Such information can help governments in strategic decision making, to identify appropriate business models and provide support with policy incentives.
Given the anticipated scale of this contribution, the private sector’s part in carrying out the SDGs should be measured, reported and communicated at national level, and at UN settings during the follow-up and review process between governments.
Agenda 2030 of the United Nations recognizes that business has a key role to play in addressing the SDGs. As more business leaders recognize their role in creating a peaceful, inclusive and environmentally secure world, many businesses are aligning their strategies with the SDGs. When the SDGs were adopted back in 2015, 71 percent of business leaders surveyed were already planning to engage with the goals, although only 13 percent felt they had the tools with which to do so. Two years later, 75 percent of businesses participating in the UN Global Compact said they were still planning to engage with the SDGs. Additionally, investors are also increasingly interested in directing funds towards businesses that are leading the way on responsible business. These players lack concrete tools to drive action on the SDGs.
One of the SDG targets (12.6) cites the benefits of sustainability reporting and encourages companies to integrate sustainability information in their reporting cycles.
Globally accepted sustainability reporting standards create a common language for organizations and stakeholders for communicating and understanding organizations’ impacts. They provide a standardized way to describe key impacts on the economy, environment and society, and increase the quality of information for stakeholders, enabling greater accountability.
Many companies already act and report on topics covered by the SDGs, such as climate change, water management and working conditions. They take stock of their current actions and discover additional priorities to contribute to achieving the SDGs. Going beyond regular communication to stakeholders, effective corporate sustainability reporting is key to building trust and aligning investment through transparency and accountability. In addition to informing external stakeholders – including investors – corporate sustainability reporting is a powerful stimulus for internal conversation and decision-making with regard to contributing to the SDGs at all levels within a company. Reporting, however, is neither the start nor the end of a company’s sustainability strategy and implementation – it’s a strategic tool that:
- engages stakeholders
- supports sustainable decision-making processes at all levels within a company
- shapes business strategy
- guides innovation and drives better performance and value creation
- attracts investments
The SDGs are anticipated to generate at least US$12 trillion worth of market opportunities by 2030. By identifying and mitigating risks to people and the environment and by providing new products and services that support sustainable development, businesses can reap benefits for themselves and for the markets they depend upon.
The SDGs are becoming increasingly important for investors too, as they are an articulation of the world’s most pressing environmental, social and economic issues and, as such, act as a definitive list of the material ESG (environmental, social and governance) perspectives that should be taken into account as part of an investor’s fiduciary duty. There is a strong business case for investing in opportunities aligned with the SDGs, including helping investors secure stable returns, better represent the values of their clients and offer sustainable financial products that differentiate them in the marketplace.
Tools and Methodologies
The online platform provides a list of business tools to measure their impact on different SDG topics as well as listing the existing business disclosures from the Analysis of Goals and Targets.
The Analysis provides a list of potential business actions and existing disclosures from established sources that business can use to measure and report on their contribution to the SDGs at the level of the targets. For each SDG target, it indicates:
- Examples of business actions
- List of established disclosures business can use to report
- Points to disclosure gaps
The Practical Guide outlines a three-step process to embed the SDGs in existing business and reporting processes in alignment with the GRI Standards and recognized principles.
- Step 1 addresses the process of prioritization of impacts and the identification of those SDGs to act and report on.
- Step 2 addresses aspects on how to set business objectives, select disclosures and analyze performance.
- Step 3 offers tips and guidance on reporting and improving SDG performance.
This publication aims to provide guidance to business reporting practitioners so they can better align their SDG-related disclosures with investors’ information needs. It includes reporting recommendations intended to stimulate more investment in business solutions to help advance the SDGs.
Senior Coordinator of Sustainable Development