Sustainability is something on the minds of many in the business world. But translating concerns about the future – and putting into action the desire to create a better world can be complicated.
Although the United Nations’ 2030 Agenda and Sustainable Development Goals (SDGs) provide a blueprint for change, it can be difficult to define a roadmap that suits a single company.
To minimize the complexity and simplify the way forward for businesses, we created this practical guide to Sustainable Development Goals.
Inside, you’ll discover:
- A full list of the UN’s Sustainable Development Goals
- The business case for aligning SDGs with organizational goals
- A step-by-step guide to setting, measuring, and achieving SDG success
Table of Contents
What Are Sustainable Development Goals?
In 2015, United Nations member states ratified a plan to address the biggest challenges facing the world’s population by the year 2030. At the core of its plan are 17 Sustainable Development Goals (SDGs). The UN describes the SDGs as “the blueprint to achieve a better and more sustainable future for all.”
These goals, each of which has its own sets of targets, address everything from poverty and public health to inequality and climate change:
- No Poverty
- Zero Hunger
- Good Health and Well-Being
- Quality Education
- Gender Equality
- Clean Water and Sanitation
- Affordable and Clean Energy
- Decent Work and Economic Growth
- Industry, Innovation and Infrastructure
- Reduced Inequalities
- Sustainable Cities and Communities
- Responsible Consumption and Production
- Climate Action
- Life Below Water
- Life on Land
- Peace, Justice and Strong Institutions
- Partnerships for the Goals
The Role of Business in Achieving SDGs
While these SDGs are the product of diplomacy, it’s not just the nations of the world that will work to implement the 2030 Agenda. Corporates everywhere have a vital role to play in leading action. Simply put, the UN’s bold vision of a brighter future is not possible without serious engagement and concrete action from the private sector.
And this activity can take many forms. As partners in working toward Sustainable Development Goals, businesses’ efforts might take the form of:
- Providing gainful employment to improve lives across society, including in developing countries.
- Fueling technology development and innovations in important fields like energy, construction, food, and mobility.
- Investing in sustainable ventures.
- Mitigating negative impacts throughout value and supply chains.
Of course, many organizations are well aware of the part they have to play in this global effort. In fact, they’ve displayed a much greater degree of awareness of the UN blueprint from the get-go. An initial 2015 PwC report from just after the Goals’ ratification found 92% of respondents in the business community were aware of the SDGs, compared with just 33% of citizens.
Still, as we’ll explore, there remains some distance between this enthusiasm and successful progress.
SDG Success Spotlight: Hilton’s Travel with Purpose
In May 2018, Hilton launched Travel with Purpose, a strategy to address the sustainability of their business. As part of the program, the company set targets to double their investment in social impact and cut their environmental footprint in half.
Crucially, each of these commitments is tied to 23 targets aligned with at least 9 different SDGs. Using their ESG management system, LightStay, Hilton can track, analyze, and report on their progress at each of their 6,400+ locations.
To date, Hilton has made significant progress against its targets, as outlined in their latest report. Their comprehensive approach garnered them a spot on the 100 Best Corporate Citizens of 2020 list—the only global hotel brand to do so.
Why Should Businesses Adopt Sustainable Development Goals?
Though much of the enthusiasm for achieving the SDGs seems based in altruism, that doesn’t need to be the only thing motivating corporates. Integrating the SDGs into their core business model can provide a range of benefits:
Unlock New Markets and Opportunities
With new initiatives come new opportunities. And that’s certainly the case when it comes to pursuing SDGs. A landmark 2017 report from the Business and Sustainable Development Commission found that efforts toward achieving SDGs could open up at least $12 trillion in new economic activities each year.
Improved Risk Management
Tackling the SDGs isn’t just about improving the future of the planet. It’s also an important part of future-proofing your business. Challenges the goals address, such as climate change and inequality, impact long-term growth prospects as well as short-term stability. Taking action can safeguard future performance.
As governments strive to achieve these goals in the decade ahead, they are likely to introduce new regulations and policies that incentivize action or penalize inaction. For example, regulations like emission pricing or taxing to address climate change would internalize previously unaccounted costs.
Fulfill Expectations and Attract Talent
Sitting on the sidelines for the SDGs is also a reputational risk. As both employees and consumers, the generations that make up an increasing majority of the workforce expect businesses to have a positive impact.
A 2019 study found that 90% of Gen Z, those born between 1997 and 2012, believes companies must act to help social and environmental issues. 75% of these will do research to see if a company is being truthful about its stances on such issues. Meanwhile, 83% of Gen Z employees and 72% of consumers consider a company’s purpose when deciding where to work or shop.
The same attitude prevails among Millennials, the generation of individuals born between 1981 and 1996. One analysis found that not only is awareness of SDGs high (90%) in Millennials but that 81% said they believed the private sector has a very important role to play in achieving them.
Challenges in SDG Adoption and Targeting
Despite initial enthusiasm and clear benefits, a range of challenges stands in the way of adoption and progress.
According to a 2019 PwC analysis, 72% of companies included mention of the SDGs in their public reporting. However, just 25% listed the SDGs in their published business strategies, and only 14% of companies mentioned specific SDG targets.
This lack of complete integration results in a lack of progress—and business leaders appear to be aware of this. A 2020 UN report found that less than a third of businesses believed their industries were moving fast enough to accomplish the goals by the end of the decade.
So what’s holding businesses back in their integration of SDGs?
At Runway, we’ve interacted with corporates who:
- May not know where to start
- Are unsure of how to measure progress against SDGs
- Don’t know whether targeting SDGs will impact their businesses positively or negatively
- Don’t know how to translate sustainable goals into long-term, sustainable change
- Worry about sacrificing short-term profits.
The clouded picture is understandable: the SDG framework calls for potentially disruptive change to existing ways of operating—a complex undertaking for any company.
Nevertheless, the business case for adopting the SDGs and aligning them with organizational goals is clear. To reduce the complexity around SDG integration, we’ve developed a step-by-step roadmap for SDG success.
SDG Success Spotlight: Kimberly-Clark Uses Value Chain Assessment to Set Ambitious 2030 Targets
As part of its 2019 Global Sustainability Report, personal care giant Kimberly-Clark unveiled a complete refresh of its sustainability goals. Central to its ambitions for 2030 was a value chain impact assessment (see Step 2 below), which can be seen in the figure above.
With an understanding of its biggest risk factors and opportunities, the company narrowed its focus to the climate and environmental areas where it can make the most impact: reducing its carbon, forest, water, and plastics footprints.
In addition, recognizing the alignment of its products’ purposes with SDGs related to health, access to sanitation, and gender equality, Kimberly-Clark set an overarching social impact target: to reach 1 billion through innovation and programs that deliver essentials to underserved communities by 2030.
Developing a Successful Roadmap
No matter where your business is in its encounter with the Sustainable Development Goals, the following steps can clarify the process and bolster your chances of making meaningful progress against the goals.
Understand the Goals and Their Relevance to Your Business
As we outlined above, there are a number of benefits organizations can capitalize on by integrating the SDGs into the core of the business model. Of course, these strengths may not be immediately obvious to all stakeholders. That’s why the first step toward SDG progress requires going back to the goals themselves.
Build consensus within your organization around the value of these goals and the responsibility your organization has to help achieve them. Holding educational workshops, brainstorm sessions, and other events can help move decision-makers from awareness to readiness.
Dig Deeper: Analyze SDGs’ Underlying Targets
When examining goals and determining their relevance to your business, it’s important to also consider the targets underlying the 17 SDGs. While the number of associated targets varies from goal to goal, there are 169 in total.
A closer look at these targets can help your business identify unanticipated action items. For instance, SDG 3, Good Health and Well-Being, possesses a diverse range of targets. This includes everything from reducing maternal mortality rate and mental health promotion to the prevention of traffic-related deaths and injuries. Examining the list in full can spring new ideas into life at your business.
Analysis of the full list also reveals how interconnected many of the SDGs are. Success against one goal might mean (or require) success against another goal.
For a full list of SDGs and their associated targets, reference the Global Reporting Initiative’s (GRI) Analysis of the Goals and Targets.
Assess High-Impact Opportunities
Use educational events as opportunities to reframe the SDGs through the lens of your own business’ priorities and goals. Not every goal will strike stakeholders as relevant to your business—and that’s okay. The UN Global Compact and GRI’s guidelines suggest using a process of “principled prioritization.”
Understanding that an organization taking action against all SDGs is unlikely to lead to significant progress against any one goal, principled prioritization is also practical. By assessing areas where a business will have the greatest impact, organizations can prioritize their actions for maximum effect.
The Value Chain Assessment
To understand available opportunities, assess the entire value chain, from raw materials all the way to product end-of-life. As in the example in the figure below, consider which SDGs best align with your business’s activities and where you may have the most impact, now and in the future. Meanwhile, divide opportunities and goals into two categories: those where your organization can increase positive impact and those where it can mitigate negative impact.
This impact assessment can be performed at the entity, product, site, or regional level of your business. Ultimately, the exercise will set your organization up to weigh and determine the best avenues for action.
Defining Social Impact Targets
While it’s now common for organizations to target environmental goals such as those above, selecting targets and indicators for SDGs related to social impact can be more challenging. Nevertheless, defining KPIs for related initiatives is crucial to measuring and achieving progress. The following example can serve as a guide:
SDG 1 (No Poverty) possesses a related target, Target 1.2, that seeks to “reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions.” Possible quantitative and qualitative indicators include:
- Total number of people registering increased productivity or revenue as a result of an initiative.
- The average yearly income of smallholders is earned through their participation in the value chain.
- An accounting of examples of significant identified indirect economic impacts of the organization, including positive and negative impacts.
Collect Data and Set Baselines
Once targets and indicators have been identified, it’s important to collect data to understand performance and potential. Stakeholders should also use current and historical data to define a baseline that serves as a point of comparison for each goal.
For example, in its Travel with Purpose program highlighted above, Hilton will measure increases in social impact investments against its 2017 baseline, the year before which its goals were announced.
However, as illustrated in the case of one Kimberly-Clark goal, baselines will not always come easily. Sometimes, further work is required to assess impact. Here, transparency is key to showing progress.
In the 2019 report that launched their goals, they describe the difficulty of defining a baseline to gauge the carbon impacts of their supply chain’s forestry activities. In the following year’s report, they evidence progress against this goal, in part, by describing their new work with a sustainability consultant to further assess the product lifecycle and determine an adequate baseline.
With past performance data against KPIs in hand—and your company’s level of ambition in mind—it’s time to put pen to paper and set down your goals.
The UN Global Compact and GRI’s SDG Compass outlines two typical methods of goal-setting:
- The Inside-Out Method: The traditional method, where a company analyzes current performance and projects trends while benchmarking against others in their industry.
- The Outside-In Method: Companies begin by assessing what is needed from a global or societal perspective. Goals are then set based on this need or on external scientific data. Rather than benchmarking against industry peers, goals are benchmarked against the needs of society that a business is best-equipped to address.
The outside-in method of goal-setting is more likely to lead to the transformational change that is the foundation of the SDGs. Setting benchmarks using this method can be more challenging, but companies may turn to resources like those provided below for support:
Integrate Goals within Your Organization
To achieve sustainability goals, integration across the entire organization is crucial. Though many companies rely on teams dedicated to sustainability to lead efforts, support across all business functions is critical to success.
Building up widespread support, however, starts with strategy. As we stated in Step 3, it’s essential that the SDGs are integrated within a company’s purpose, values, policies, and code of ethics. This sort of inclusion and advocacy can keep the SDGs top-of-mind across the organization and fuel practical action against goals.
After objectives are identified, managing action requires determining internal stakeholders. Analyze which departments play a pivotal role in achieving progress against each goal and determine which actions should be delegated to these departments’ leaders.
For example, if one goal is the reduction of waste in the supply chain, responsibilities should be delegated to leaders in this department. Additionally, accountability measures for key supply chain management stakeholders should be put in place.
Measure, Report, and Improve
With operational and accountability structures in place, it’s time to get to work on achieving your sustainability goals. Ongoing and annual reporting is an essential piece of the puzzle. Crucially, it can:
- Promote transparency and accountability for internal stakeholders and investors.
- Offer a window into a company’s progress against objectives related to high-priority SDGs. By highlighting performance gaps, ongoing progress reporting can help prioritize opportunities for improvement.
- Stimulate internal interest and motivation in achieving sustainability goals.
- Continue to underline the business case for taking action against SDGs. When integrated with wider financial and performance reporting, the positive impact of sustainable investments can be better (and more widely) understood.
A better tomorrow depends on businesses. And, as we’ve shown in our guide to Sustainable Development Goals, a better tomorrow is also better for businesses.
Though the process of navigating and integrating the SDG framework into your organization can be complex, the resources above can simplify matters significantly.
With 2030 fast approaching, your business can take the actionable insights above and get to work building a brighter future—for your business and the world.
About Runway Innovation Hub
Runway is a Silicon Valley-based innovation company accelerating the success of global innovators and entrepreneurs. We help corporations through results-focused innovation consulting, and power the growth of startups through acceleration programs, mentorship and coworking services.
Since 2013, we have helped companies like IBM, Epson and Emirates identify their biggest growth opportunities, and built customized, hands-on innovation programs to generate real business results. Learn more about how we can help you do the same here.