The business strategy tool you’ve probably not even considered

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Diagram illustrating the five steps to using the SDG goals within business

The SDG Compass

In September, amid much fanfare, the United Nations General Assembly formally adopted 17 new global goals designed to tackle poverty, hunger, climate change and inequality by 2030. Ratified by all 193 member states, the Sustainable Development Goals (SDGs) have been billed as the most comprehensive global roadmap to tackle the world’s ills ever proposed.

What does this mean for business?

The logical question of course, is what does this mean for business? Firstly, the SDGs represent an unprecedented political consensus on the level of progress that is desired. They provide a vision of what might be possible if governments, businesses and civic society work together. Even though the goals are not legally binding, they are likely to form a framework for national policy making.

Any business keen to stay on good terms with such a key stakeholder and retain their licence to operate would be mindful to assess whether their actions are assisting or resisting the ambitions of government in such key policy areas. But that’s not the only reason.

Opportunity

The SDGs also represent an opportunity for business-led solutions and technologies to be developed and implemented that address some of the world’s biggest challenges. How do we bridge the energy gap? How do we enter new markets when 4.2 billion people still don’t have internet access? How do we make food and clean water available to all? The companies that step up to tackle these problems will likely find new customers, new markets and new income streams waiting for them.

New strategic tool

Companies like IBM, Google, GSK and Dow Chemical have already come together to find ways of using the SDGs as part of their respective strategies. Impact 2030 is a business-led coalition convened to marshal the power of employee volunteer investments to advance the achievement of the SDGs.

Unlike the Millennium Development Goals that went before them, there is a strong sense that the SDGs have been designed for implementation and we are not alone at CSC in assessing how the goals align with our current programmes and future strategy.

What business needs to do next

Much has been written about why the goals are important, but there’s a real dearth of commentary around how to use them in a business context. The one piece of guidance that does exist is the SDG Compass, a how-to guide developed by GRI, the UN Global Compact and the World Business Council for Sustainable Development (WBCSD) for the launch of the goals. In addition to the first step of understanding the SDGs and what they mean for business, it provides a sound, step by step guide for implementation.

How to use the SDGs

Defining priorities & selecting indicators: Very few companies will be looking to use all 17 SDGs within their strategies, opting instead to prioritize those that are most material to their businesses. After mapping the value chain and identifying impact areas, the next stage is to select indicators and begin the process of data collection. This is a very live issue for us here at CSC as we’re currently in the process of reviewing the SDGs to see how they align with the 18 significant aspects we identified under the GRI G4 standard.

Finding the right indicators is critically important to the success of any strategy and we need to be ever mindful that even the best standards may need tailoring to fit the needs of the business. When our materiality assessment identified four areas not covered by GRI, we looked to SASB (Sustainability Accounting Standards Board) to help us fill the gap and make sure that our reporting remained aligned with our corporate strategy. How the Dow Jones Sustainability Index will be approaching the SDGs will also be a key part of our assessment process.

Setting goals and KPIs: After identifying priorities, the next essential step is to select key performance indicators (KPIs) that directly address the impact or outcome of activities. Choosing KPIs that can be used to drive, monitor and communicate progress is also an important consideration.

Integrating sustainability into the business: Creating win-win situations requires close alignment with company strategy from the outset. If this has been achieved during the goal setting phase, then integrating sustainability into the core business and embedding targets across functions becomes that much easier. It also demonstrates how important it is to choose the right areas to focus on i.e. those areas where the company can make the biggest difference.

Reporting & communicating: The final stage in the Compass guidance focuses on disclosure and engagement. SDG target 12.6 specifically calls upon governments to ‘encourage companies, especially large and trans-national companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle’.

I have already seen some sustainability reports begin to organise their disclosure around the SDGs and I’m sure more will follow. Reporting progress against the goals will I feel become more common place and it is something that should be encouraged.

The world took a bold and some might say, courageous step last September in ratifying the SDGs. Their success, however, will rest not just on how businesses, governments and civil society focus and invest in them, but on how successfully we can make them live, not as ambitious words on a page, but as bright, inspiring visions of what we might be able to achieve.

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