The SDGs and Business: New Horizon or New Smokescreen?

The SDGs and Business: New Horizon or New Smokescreen?

The 17 UN Sustainable Development Goals, adopted by 193 countries in September 2017, are very fashionable now – especially among big companies. But are they really changing the way that business does business? Or are they little more than a new wave of corporate PR spin – a successor to “green-washing” that we might call “rainbow-washing” (referring to the over-eager use by companies of the colourful SDGs mosaic or rainbow wheel to enhance their brand)?

If the sustainability-oriented business groups, like the World Business Council for Sustainable Development, UN Global Compact, Global Reporting Initiative[1] and the Business and Sustainable Development Commission[2] are to be believed, the SDGs represent a massive opportunity for strategic reorientation and widespread innovation. But is that how business sees them? And how are companies actually using them, if at all? Let’s look at this through the lens of risks and opportunities:

Risk 1: Business ignores the SDGs

There is a very real risk that most businesses – other than large multinationals – will simply ignore the SDGs and carry on with business as usual. After all, the SDGs are a political agreement, with national goals for countries, not for companies. And the track record of business on sustainable development so far – 40 years after the term was coined by the Brundtland Commission[3] – is mixed at best. The UN Global Compact, a flagship standard for sustainable business, still only has 12,500 companies signed up worldwide[4].

Risk 2: Business spins the SDGs

Make no mistake: corporate affairs departments and PR agencies love the SDGs! What’s not to like, with all those colourful blocks, catchy icons and good causes. Even more alluring is the SDGs rainbow wheel linked to the UN logo. We have seen this before. After the UN Global Compact was launched in 2000, the term “blue-washing” was coined for exactly the same reason. Companies were using the blue UN logo to appear to be far more sustainable and responsible than they really were. Today, for many companies, it’s the same story all over again, but this time it’s “rainbow-washing” – 17 catchy colours for the price of none.

Risk 3 – Business cherry-picks the SDGs

Another risk is that business will adopt the letter, rather than the spirit of the SDGs. In this scenario, the SDGs become a compliance agenda, with companies doing the minimum necessary to appear credible. And since companies will argue that they should only focus on “material” issues where there is a clear business case, they end up cherry-picking the SDGs, with most remaining neglected. They see little incentive to be ambitious or innovative, so the ISO-standards approach of continuous improvement is adopted, resulting in incremental improvements that bear no relation to the scale and urgency of the problems.

Are these real risks? So far, the anecdotal evidence I have seen – and even some early academic research[5] – suggests that these three risks are very real indeed and already represent the majority of responses by business to the SDGs. But the SDGs undoubtedly represent a significant opportunity as well.

Opportunity 1 – Business adopts the SDGs

If business sees the SDGs as a systemic agenda for action, and adopts the full package, so to speak, this could really advance progress towards sustainable development. Hence, rather than only focusing on those SDGs that are convenient, cost-effective or strategic for the business, this would mean that companies commit to make some impact, directly or indirectly, on all 17 SDGs. The Port of Antwerp[6] is an example of a company that has made a commitment to this holistic approach in collaboration with the 1,000 or so companies that form part of its industrial zone.

Opportunity 2 – Business innovates around the SDGs

Another opportunity is that companies see the SDGs as an innovation, rather than a compliance agenda. For example, instead of being content with taking some climate action (SDG 13), they commit to ambitious, science-based targets, such as 80%-90% carbon reductions, or carbon neutrality, and charge their R&D departments with finding creative solutions to get them there. In this scenario, SDG 12 (responsible consumption and production) becomes the engine of innovation to achieve all the other SDGs, by embracing hybrid business models[7] like those emerging from the resilience, exponential, access, circular and wellbeing economies.[8]

Opportunity 3 – Business transforms the SDGs

The best hope for the SDGs is that business sees them as an urgent wake-up call to reform our outdated industrial economic system, which is no longer fit for purpose. In this scenario, companies adopt a collaborative approach to challenging and transforming the perverse “rules of the game” in our global markets (such as subsidies for fossil fuels) and advocate for policy reforms that raise minimum sustainability standards and internalise negative externalities[9] (such as through a carbon tax). In essence, business uses the SDGs to embrace the overarching goal of creating integrated value.[10]



About the Author

Prof. Dr Wayne Visser is Director of Kaleidoscope Futures and holds the Chair in Sustainable Transformation and is Professor of Integrated Value at Antwerp Management School. He is also Fellow of the University of Cambridge Institute for Sustainability Leadership. He is the author of 28 books – including The World Guide to Sustainable Enterprise and Sustainable Frontiers: Unlocking Change through Business, Leadership and Innovation.


Acknowledgement

Also published in Polish by Responsible Business - CSR Compendium, edition 18, 2017.

 

[1] GRI, WBCSD, UN Global Compact. (2015). SDG Compass: The guide for business action on the SDGs. New York, September.

[2] Business and Sustainable Development Commission. (2017). Better Business Better World: The report of the Business & Sustainable Development Commission. London: January.

[3] World Commission on Environment and Development. (1987). Our Common Future: The Brundtland Report. New York: UN.

[4] According to Quora, there are 45,508 stock-exchange listed companies in the world. Estimates for other companies vary from hundreds of millions to more than a billion.

[5] Bonsing, A.E.M. (2017). The relevance of a better world: the business materiality of the Sustainable Development Goals. MSc thesis, University of Amsterdam.

[6] Full disclosure: The Port of Antwerp is one of the sponsor partners of the author’s Chair in Sustainable Transformation at Antwerp Management School

[7] AMS. (2017). Challenging Business As Usual: Conceiving and Creating Sustainability Value Through Hybrid Business Models. AMS Sustainable Transformation Report Series, No. 2, Antwerp: Antwerp Management School in partnership with ING Belgium.

[8] Visser, W. (2017). Innovation pathways towards creating integrated value: a conceptual framework. AMS Sustainable Transformation Paper Series, No. 2, Antwerp: Antwerp Management School.

[9] Externalities are the social and environmental costs of economic activity imposed on society. Internalising externalities means holding companies that cause these impacts to account, through taxes or other pricing or regulatory mechanisms.

[10] Visser, W. (2017). Integrated Value: What It Is, What It’s Not and Why It’s Important. Huffington Post, September 30. Integrated value is the simultaneous building of multiple ‘non-financial’ capitals (notably infrastructural, technological, social, ecological and human capital) through synergistic innovation across the nexus economy (including the resilience, exponential, access, circular and wellbeing economies) that result in net-positive effects, thus making our world more secure, smart, shared, sustainable and satisfying.

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