Achieving progress on Sustainable Development through Sustainability Reporting
The World Economic Forum meeting in Davos was last month and, like last year, my news feeds have been peppered with articles celebrating the successes and grand ambitions of corporate and political leaders. There are also plenty more lamenting capitalist elites and their vocal – but not effectual – support for development worldwide.
This year, my perspective on events has changed somewhat as, having left academia and started working in the sustainably industry, I now have my mind on the practical aspects of implementing, measuring and ultimately helping companies deliver corporate sustainability efforts.
With this in mind, I explore here the theme of converting leadership commitment into action on sustainable development, with particular reference to the UN Sustainable Development Goals which have received rich critique of lately.
Rhetoric on corporate sustainability is strong, but action is lagging ambition substantially
The UN Sustainable Development Goals1, the SDGs, Global Goals, or simply the Goals, are a set of 17 ambitious, interdependent targets concerning the state of the world. They are wide ranging and address arguably all of the most pressing social, economic, environmental and government issues facing people and societies worldwide. It is widely agreed that governments and individual citizens alone can not meet these targets, and that businesses engagement with this agenda is therefore pivotal to success.
Many corporate leaders today are strong on rhetoric around the sustainable development agenda, particularly since the launch of the UN Global Goals. For example, a prominent 2016 report by Accenture Strategy2 concluded that business leaders were committed to driving forward on the UN SDGs to create a stronger global business environment. Their study of CEO opinions found that 87 % of those surveyed apparently believed the SDGs provide an opportunity to rethink approaches to sustainable value creation. Indeed, the research consensus on this issue is that companies which explicitly consider sustainability topics and wider social, economic and environmental issues broaden their company’s perspective on risks and opportunities, and therefore increase long-term value creation3.
However, it is also apparent that the hype around corporate sustainability has not been converted into clear progress on delivery of the Goals – at least not to the extent many had hoped for considering the ambitious targets that were agreed upon back in 2015.
For example, a comprehensive survey of sustainability practitioners across varied organisations, including corporate organisations, consultancies, NGOs, governments and academia by Corporate Citizenship4, concluded that action on the SDGs is lagging (apart from notable action on SDGs 5 and 11 – Gender Equality and Sustainable Cities). The results of the report echo feeling amongst practitioners that efforts are fledgling. Indeed, the UN’s own progress report1 on the SDGs in 2017 concluded that the rate of progress was ‘far slower than needed to meet targets by 2030’.
This is despite awareness of the SDGs among corporate organisations apparently being high, with many large organisations having mapped their commercial activities onto the framework of the Global Goals.
Corporate Citizenship have suggested a number of reasons for the stunted development of progress on the Goals. One plausible and simple explanation is that the initial hype has faded since their launch, and another is that achieving the goals in practice is of course much harder than talking about them. More practically, they identify that many companies appear unsure as to how to set specific targets, act, measure and evaluate progress on the SDGs.
Achieving progress through sustainability reporting
Perhaps because of its association with accounting and financial statements, sustainability reporting can initially sound rather dull. But upon closer look, I think it quickly becomes apparent that sustainability reporting is a powerful tool for change, and is an essential part of the process of sustainable business transformation for any organisation.
The reporting process performs a myriad of functions, helping organisations set goals, measure performance, and implement and manage change. It allows organisations to identify and communicate their most significant environmental, social, economic and governance impacts to both internal and external stakeholders. It also makes abstract issues tangible and concrete, and it helps businesses develop sustainability-related strategies and activities. Reporting is therefore a crucial tool enabling firms to meet their commitments to the Global Goals.
There are numerous corporate responsibility initiatives out there that aim to facilitate the transformation to business sustainability through the reporting process – too many to review in this article. But of particular prominence and relevance to the SDGs is the UN Global Compact, an initiative that exists to draw businesses together under the Goals and report on their implementation. The Compact allows businesses to commit to uphold ten key principles congruent with the Goals that are focussed on human rights, labour, and the environment.
Once committed to the Global Compact and its 10 principles, the UN Global Compact Management Model helps companies ensure that their corporate sustainability strategy is aligned with the Global Compact.
Perhaps the Management Model’s most important feature is that it is an iterative, flexible process for continual improvement. After all, the pursuit of sustainability goals such as the Global Goals is a huge challenge, and such a challenge can only be met with perseverance and drive over the long term. And while strong leadership is essential in initiating and maintaining efforts to change corporate policies and practices, the Global Compact is clear that commitment alone is not sufficient to achieve results. Rather, the process of committing, assessing, defining implementing, measuring, communicating in an iterative cycle is required to achieve results (Figure UN Global Compact Management Model).
Further to the strategic and operational benefits of sustainability reporting, there is a wider issue to be addressed surrounding trust and transparency. Many millennials doubt the integrity of corporate leaders around ESG factors, and are thus sceptical about the commitments made – particularly where these commitments coincide with opportunities for good publicity and ego pampering among elites. In the regard, the transparency afforded by rigorous, consistent and honest non-financial reporting processes will be crucial to build trust in corporate leadership among millennials5 and allow big business to contribute in its crucial to achieve the SDGs.
1The Sustainable Development Goals Report (2017). United Nations.
2UN Global Compact – Accenture Strategy CEO Study (2016) https://www.accenture.com/us-en/insight-un-global-compact-ceo-study.
3UN Global Compact Management Model (2010). Deloitte/ United Nations Global Compact.
4Accelerating Corporate Leadership on the Global Goals (2017). Corporate Citizenship.
5Advancing the SDGs: Business Action and Millennials’ Views (2016). Corporate Citizenship.