This is where the United Nations’ Sustainable Development Goals (SDGs) are an important consideration.
But what are they? More importantly, why are the SDGs important for business?
How can the SDGs and businesses align to help end poverty, protect the planet, and achieve prosperity?
Exploring Global Businesses & UN SDGs
- What are the SDGs?
- Why are the SDGs important for business?
- What are businesses doing to communicate their SDG efforts?
- How to measure and report on SDG performance
- Engaging stakeholders in SDG implementation
- Overcoming barriers to SDG integration in business operations
- How can small businesses promote SDGs?
1. What Are The SDGs?
This plan aims to end poverty, protect the planet, and ensure peace and prosperity for the world’s population by 2030—and the SDGs play a key role.
The 17 SDGs are:
- No poverty
- Zero hunger
- Good health and wellbeing
- 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
Each SDG has specific targets and indicators to measure progress toward achieving them. They are intended to apply to all countries, regardless of their level of development, and are interconnected, meaning progress in one goal can support progress in others.
Why Is Sustainable Development Important?
It’s easy to look at the SDGs as an unattainable ideal created for large scale entities like governments, but in reality, everyone—individuals, small businesses, and corporations alike—should recognize the importance of sustainable development:
- Environmental protection: Sustainable development seeks to balance economic growth with environmental protection and conservation.
- Social equity: Sustainable development aims to promote social equity and reduce poverty. This means ensuring that all people have access to basic resources, including sustainable food brands, water, shelter, and healthcare, while also promoting social justice and equality.
- Economic prosperity: It recognizes that economic growth is important, but it must be balanced with environmental protection and social equity, and thus promotes the use of renewable resources, sustainable practices, and the development of green industries.
- Long-term planning: By taking a long-term, holistic approach to development, we can ensure that future generations inherit a healthy and prosperous planet.
Overall, sustainable development is important because it recognizes that economic, social, and environmental factors are interconnected and must be balanced to promote long-term sustainability and prosperity.
2. Why Are The SDGs Important For Business?
The SDGs allow businesses to create, drive, and share their sustainability goals and initiatives, aligning them with a shared and specific purpose. They can even guide sustainability marketing efforts.
By placing strategies alongside the SDGs, companies can engage consumers, stakeholders, and staff, find inspiration for products and services, address their image, future-proof the business, and partake in corporate social responsibility (CSR).
Benefits Of Aligning Business Strategies With The SDGs
It’s incredibly relevant for businesses to align their aims and actions with the SDGs.
Using the SDGs and setting sustainability goals for companies presents a wealth of opportunity and fantastic benefits.
1. Business Opportunities
As consumers seek more eco-friendly and ethical items, the value of the sustainable market is only growing.
The SDGs are an excellent framework on which to base new products, services, and business models that address global sustainability challenges. Organizations can tap into new markets, attract customers, and increase profits.
2. Improved Reputation
By aligning their strategies with the SDGs, businesses can improve their reputation, build trust with stakeholders, and differentiate themselves from competitors.
Failing to address the SDGs could cause reputational damage, regulatory penalties, and supply chain disruptions. By using the framework of the SDGs, businesses can mitigate these risks and protect their long-term viability.
3. Cost Savings
Adopting sustainable practices highlighted by the SDGs can lead to significant cost savings in the long term.
Waste reduction, renewable energy, and efficient transport can minimize business costs while attracting more conscious consumers, who will pay more for a sustainable product or service.
One of the critical components of global businesses and the UN SDGs is a partnership—working together to achieve a peaceful and more prosperous world.
By collaborating with other charities and organizations, businesses can achieve innovation. Partnerships allow companies to engage in more extensive conversations and reach a wider audience while engaging in sustainability efforts.
Challenges For Global Business & UN SDG Integration
For businesses not part of traditional ‘green’ or sustainable industries, aligning with the SDGs can require significant changes in practices, supply chains, and stakeholder engagement.
These risks should be considered to achieve a smoother and more efficient transition.
The SDGs are a complex framework requiring businesses to simultaneously address various social, environmental, and economic challenges.
Juggling these elements can be challenging and require new management or outside advice. Organizations should ensure they have adequately planned for the scale of their operations, especially if crucial alterations are required.
Integrating the SDGs into business strategies requires significant changes in operations, supply chains, and stakeholder engagement.
Company structures may change, new talent or technology may be required, and stakeholders may need to be convinced. Organizations should plan for teething problems in integration and implementation and address concerns or issues swiftly.
Measuring progress toward the SDGs can be challenging, as it requires the development of new metrics and indicators.
While some goals, such a climate action, can be more or less effectively measured using the Science Based Targets Initiative (SBTi), others, like zero hunger, are almost impossible to quantify.
Establishing a way of measuring and communicating achievements is integral to tracking progress, ensuring brand image, and engaging stakeholders and staff. One of the significant benefits of corporate SDG reporting for investors is that they’re more likely to understand and engage with it.
While collaboration can be helpful for businesses and is essential for addressing the SDGs, establishing good partnerships across sectors can take time and effort.
Finding suitable organizations to work with can be lengthy; maintaining these relationships requires communication and consideration. Businesses should approach this element cautiously and sensitively, thinking carefully about which companies, brands, and people they want to work with.
SDGs As A Framework For Corporate Social Responsibility (CSR)
The SDGs provide a framework for CSR that goes beyond traditional philanthropy and compliance-based approaches.
CSR is a business approach that creates long-term value for stakeholders by integrating social, environmental, and economic considerations into business operations and decision-making.
The SDGs offer a robust framework for CSR because they provide a shared language, vision, and roadmap for global sustainability. By aligning their CSR strategies with the SDGs, businesses can contribute to achieving global sustainability goals while also creating value for consumers and stakeholders.
Organizations can use the SDGs to support their CSR in areas including:
- Goal-setting: A basis for setting sustainability goals aligned with their core business strategies and values.
- Stakeholder engagement: By using the SDGs as a basis for dialogue and common language, businesses can build trust, enhance transparency, and identify shared priorities among stakeholders.
- Reporting: SDG-related metrics and indicators allow businesses to demonstrate their progress toward global sustainability goals and identify areas for improvement.
- Collaboration: Collaboration with governments, civil society, and other stakeholders helps businesses leverage their resources, expertise, and networks to drive sustainable change.
3. What Are Businesses Doing To Communicate Their SDG Efforts?
Communication helps build trust, enhance transparency, and demonstrate their commitment to global sustainability goals. Fortunately, businesses already communicate their SDG efforts to consumers and stakeholders in several ways.
1. Sustainability Reports
Many large-scale businesses publish annual sustainability reports detailing their progress toward the SDGs.
These reports typically include performance metrics, case studies, and stakeholder engagement activities.
Reports should be readily available to consumers and stakeholders and clearly outline how the company is doing to meet sustainability goals and how close they are to achieving them.
2. Social Media
Social media is a fantastic way for businesses to communicate their SDG efforts to a broader audience.
Organizations may implement social media sustainability campaigns to share progress updates, highlight partnerships, and engage with the broader community.
Businesses can use the SDGs to launch specific environmental and social equality campaigns to raise awareness about a particular issue, highlighting their effort to address it.
For example, a fashion brand (even a traditionally unsustainable one, such as Adidas or H&M) might launch a campaign to promote sustainable clothing in support of SDG goal 12: responsible consumption and production.
4. Investor Communications
Investors are increasingly interested in the sustainability performance of a business, including its progress toward the SDGs.
Businesses, therefore, need to tailor their communications, using annual reports and investor presentations to share their SDG efforts.
Many businesses encourage employees to volunteer their time and skills to support SDG-related initiatives, such as building homes for low-income families, partaking in beach cleans, or assisting in a meal center.
6. Charitable Donations & Partnerships
Businesses may also make charitable donations to support SDG-related causes or partner with non-profit organizations to boost funding for specific issues. These can include raising money for clean water and sanitation and donating profits to environmental charities.
Memberships to organizations such as 1% for the Planet signify to customers they’re making efforts to hold themselves accountable to such pledges.
7. Employee Engagement
Engaging employees helps build awareness and support for an organization’s sustainability efforts.
Businesses can use workshops, training exercises, retreats, and other activities to help employees understand the importance of the SDGs and their role in achieving them.
Communicating these events and initiatives through PR avenues helps boost brand image and entices stakeholders, consumers, and potential employees.
4. How To Measure & Report On SDG Performance
Measuring and reporting are essential to implementing the SDGs in business operations. It allows companies to track progress, identify areas for improvement, and effectively communicate their efforts to engage stakeholders.
Organizations can measure and report their SDG performance using several key indicators and tools.
- SDG indicators: The UN developed a set of 231 global indicators to track SDG progress—including poverty, health, education, gender equality, and climate change—which businesses can use to measure performance and report progress.
- GRI standards: The Global Reporting Initiative (GRI) provides reporting standards across several areas, such as environmental, social, and governance (ESG) issues. They guide how to report these issues effectively.
- Integrated reporting: Integrated reporting is a framework that provides a holistic view of a company’s performance by combining financial and non-financial information. This approach can help businesses communicate their sustainability efforts more comprehensively and transparently.
- Impact assessment: Evaluating the social, environmental, and economic impacts of a business’s operations, companies can use impact assessment tools to identify and measure their activities’ positive and negative impacts and develop strategies to mitigate and enhance negative impacts.
- Sustainability ratings: Independent rating agencies can conduct a sustainability assessment of a business and give it a rating. Having a recognized and impartial review of the company’s sustainability efforts helps stakeholders and builds trust and credibility.
5. Engaging Stakeholders In SDG Implementation
Engaging stakeholders in SDG implementation is crucial for the success of a business’s sustainability efforts.
Collaboration and partnerships can help organizations leverage various stakeholders’ resources, knowledge, and expertise, including employees, customers, suppliers, investors, civil society organizations, and governments.
1. Multi-Stakeholder Initiatives
Multi-stakeholder initiatives are partnerships between businesses, civil society organizations, governments, and other stakeholders to address sustainability challenges.
They can provide a platform for stakeholders to collaborate, share knowledge and resources, and develop solutions to sustainability challenges.
2. Supply Chain Collaboration
Businesses can engage suppliers in SDG implementation by promoting sustainable practices and building partnerships for sustainable sourcing.
Examples include providing training and support to suppliers on sustainability issues, setting sustainability standards, and working with them to develop sustainable supply chain practices.
3. Community Partnerships
Engaging local communities in SDG implementation is critical to ensuring their success. This can be achieved by building partnerships and supporting community-led initiatives, such as investing in community development programs, providing support for education and healthcare, and engaging in dialogue with local communities to understand their needs and priorities.
4. Employee Engagement
Providing engaging opportunities for employees helps generate excitement and interest in SDG implementation.
Organizations can allow staff to volunteer, offer sustainability training and education, and aim to create an overall culture of sustainability within the company. This helps build employee loyalty and commitment and promotes sustainable practices.
5. Investor Engagement
To engage investors in SDG implementation, businesses need to communicate their sustainability efforts and performance and demonstrate the value of sustainability for long-term financial performance. This can include developing sustainability reports and engaging with investors on sustainability issues.
6. Overcoming Barriers To SDG Integration In Business Operations
Integrating SDGs into business operations often requires policies, practices, and cultural changes. This can be challenging for some organizations, especially those not usually concerned with sustainability or with outdated ways of working and historic brand images.
Pushing for business SDG integration is crucial to advancing sustainability efforts and achieving a greener and more ethical business, so it’s critical businesses employ methods to overcome each of these barriers.
1. Lack Of Awareness
Many businesses, stakeholders, or employees may not be aware of the SDGs or understand their role and importance—this stops them from integrating them into operations.
To overcome this, organizations can start by educating themselves on the SDGs and their relevance to their businesses. This could involve attending workshops, training sessions, or partnering with companies specializing in sustainability.
2. Limited Resources
Integrating the SDGs into business operations may require additional resources, investment in new technologies, or changes in supply chain practices. Dedicating time and money to sustainability initiatives can be challenging for small or less profitable organizations.
To address this, businesses can start by prioritizing the SDGs most relevant to their operations and developing a phased approach to SDG integration. This can help manage costs and minimize resource constraints.
3. Lack Of Metrics & Data
Measuring and reporting SDG performance requires metrics and data limited to some businesses.
Companies should develop a sustainability reporting framework that aligns with the SDGs and identifies relevant metrics and data sources. Tools like the UN’s SDG Indicators, GRI Standards, or working with external stakeholders to develop appropriate metrics can help.
4. Cultural Resistance
In some organizations and industries, integrating the SDGs into business operations may require changes in culture and mindset.
To prevent backlash or resistance, businesses can start by promoting a culture of sustainability, focusing on using tactics to engage employees, customers, and other stakeholders in sustainability efforts. This helps build support and buy-in for SDG integration.
5. Regulatory & Legal Barriers
Sometimes, regulatory and legal barriers can limit businesses’ ability to integrate the SDGs into their operations.
As much as possible, companies should work with policymakers and other stakeholders to advocate for policies supporting SDG integration and develop compliance strategies aligned with the SDGs.
7. How Can Small Businesses Promote SDGs?
It’s not only large organizations that can engage in sustainability issues and promote the SDGs.
Using the tips, knowledge, and insights we’ve shared earlier, small businesses play a crucial role in supporting the SDGs and can integrate sustainability into their operations.
A checklist to start with is:
- Conduct a sustainability assessment
- Set sustainable goals
- Engage employees
- Interact with customers
- Build sustainable partnerships
- Support local communities
- Monitor and report progress
By promoting the SDGs, small businesses can contribute to achieving a sustainable future and enhance their reputation and brand value.
Closing Thoughts On Why Sustainable Development Is Important For Business
As more companies recognize the importance of sustainable development, the future of SDGs and businesses seems promising, but to reiterate, how are the SDGs important to business?
Integrating the SDGs into operations is an excellent way to begin developing sustainability initiatives and ensuring the organization is working towards a shared and accepted goal.
We’ll likely continue to see advancements in how SDGs are used in business, especially as new sustainable smart technology emerges, and high carbon industries seek to adapt and utilize the goals for a greener image.
Things like working closely with governments, transitioning to a circular economy, adopting sustainable finance, and continuing to push for greater transparency and accountability, offer significant future opportunities for SDGs and businesses.
Contributing to the achievement of the SDGs is something all businesses must engage in to create a sustainable future for all.