This article was first published in the Huffington Post.
This was the question that I answered at a recent event at the UN in Geneva to bring business, the UN and civil society together.
Why are the SDGs relevant for business? Why should business care? How can businesses approach the SDGs? What are the challenges we face?
The goals have been welcomed by the sustainable business community, it’s an important milestone for the profession as we drive forward efforts on corporate sustainability and responsibility. The SDGs recognise and give an international platform to the fact that business can and should have a role to play in furthering sustainable development.
Why are the SDGs relevant for business?
1. The world is changing! We have finite natural resources, dwindling biodiversity and ecosystems, are in the midst of a digital revolution and we have an increasingly urbanized and migrating population. Business doesn’t just impact on these global trends but business is also impacted BY these trends. Especially in the case of changing business expectations. We don’t just expect business be economically viable anymore- one purpose of making a profit, we expect them to be environmentally mindful and socially responsibly.
2. This becomes even more apparent amongst the millennial generation who are changing the landscape of the working world as we know it. Millennials don’t want to work for organisations that exist just to make a profit but rather they want to work for businesses that have values, make ethical decisions, have responsible supply chains, value human rights, are environmentally conscious and active in the communities where they do business. They believe in purpose beyond profit. This is relevant because of the fact that millennials will make up 75%of the US workforce by 2030, the deadline by which we aim to achieve the global goals, and businesses will need to find new ways to attract, retain and engage and motivate these employees.
3. We need to think of the SDGs as a potential business opportunity, as a driver of investment. Tackle it like any business issue and take advantage of the opportunity to move the needle on Corporate Responsibility & Sustainability from the margins of business to being fundamental to business strategy, embedded in business as usual.
So what could some of these business opportunities look like?
The obvious route we look to is through formal CR or Sustainability programmes but we need to think broader! It’s a chance to look for commercial solutions to social and/or environmental problems. Of course, one business cannot save the world but should focus efforts on where they can create shared value. Reflect on; what is your business model? Where are your strategic priorities? What resources, skills, talent, finances, and networks can you deploy to have the greatest impact on society? And then, map that to the goals to identify which ones to tackle. And this is exactly what progressive businesses are starting to do.
The below goals seem to resonate the most with business;
Goal 5: Gender Equality
It will take 117 years to achieve to achieve gender parity despite the fact that the business and economic case seems clear. We know share prices have the potential to rise by 26% if a company has one or more women on the board. We know we can add $12tn to global growth if we achieve gender parity. Couple this with the fact that by 2028 the global income of women is predicted to rise from $13 to 18trn, meaning more financial independence, more decision making and importantly for businesses looking for opportunity, more spending power.
Goal 8: Economic Growth and Decent Work
A goal many businesses have identified as key and can contribute to simply by virtue of their existence, providing employment and paying taxes, etc. Entrepreneurs and SME’s are massive drivers of economic growth and development especially in emerging countries but with 50% of SME’s lacking access to finance this significantly hinders their growth. Financial products like microfinance and microinsurance can play a role here. They are commercial solutions to social and environmental issues.
Goal 13: Climate Action
Climate change is predicted to drive 100 million more people into poverty in the next 15 years unless action is taken. We know the most poor in the world will be the most affected but no one is immune. Climate change could cut the value of the world’s financial assets by $2.5tn, according to the first estimate from economic modelling, potentially propelling us into another financial crisis. And over 60% of investors are concerned about the risk that ‘stranded assets’ may pose. Capital market investment is required to invest in the transition to a low carbon economy and we’ve seen the likes of the rise of climate and green bonds driven by early adopters recognising the business value of taking climate action.
As an international community focused on achieving the global goals by 2030 there are also challenges and questions that collectively need to be worked out:
1. We have a gap in incentives from investors, action varies widely from goal to goal, in the most drastic of cases from 78% for Goal 13: Climate Action versus 20% for Goal 10: Reduce Inequality in and among countries.
2. Secondly, will government pick up the slack? Despite private sector involvement the onus is still on governments to OWN the goals and they can also play a role in influencing business through regulation for example. Business is just one part of the eco-system!
3. SMEs. Most businesses in the world are SME’s. How do we engage them with the SDGs?
4. And lastly, I wonder, will companies simply align their current activities or will the goals galvanise business to act and create impact on the back of the SDG’s?
Nicola Ruane is passionate about sustainable capitalism and finance as a mechanism to change the world for the better. Moving from the trading floor to a role pioneering the CSR programme of a major global bank in EMEA, Nicola is now leading Corporate Sustainability Reporting in financial services within a Big 4 firm. A One Young World Ambassador, UN speaker & yoga student, she blogs and tweets about sustainable business, millennials, women, purpose & finance.