Sustainability
While it covers similar ground, the ESG approach involves an analytical framework focused on risks to the company, rather than a set of global goals that provide the socioecological foundations for economies and businesses to thrive. Not adopting certain SDGs may represent a material risk to a business that an ESG framework would not identify. Yet many companies take this limited ESG, compliance-driven approach. On its own, consideration of ESG concerns is unlikely to fully achieve the SDGs. It is also important that senior leaders have a positive outlook on the SDGs and see them as opportunities, rather than simply as risks or problems. Most are not attuned to think of SDG solutions as commercial opportunities – even though they often are the very things that society and the environment need most. The provision of food, education, healthcare and green energy, for example, are essential for the world to prosper and progress, and so embody significant intrinsic value. Once the SDGs are seen as opportunities for organisations to 2 View the SDGs as opportunities add value, executives should ask how to develop the capacity to provide the innovative solutions, products, and services needed to achieve the goals on a commercial basis. 3 Align and integrate The next step moves the organisation towards being a truly purpose-led enterprise with the planet’s goals at the heart of its strategy. This means aligning the organisation’s purpose with the UN’s SDGs and integrating their policy intentions into all functional areas, including
marketing, operations, and product development. The key is embedding
17 SUSTAINABLE DEVELOPMENT GOALS (SDG S ) TO TRANSFORM OUR WORLD
consideration of the chosen SDGs in decision-making across the entire organisation and its supply chain. While this may take time and bring internal disruption, businesses need to understand the process involved so they can adapt organisational structure and resources over time to achieve the goals. Examples include setting internal targets, adapting key performance indicators, providing revised performance incentives, ensuring board representation with sustainability expertise, and revising internal values and policies to integrate the targeted SDGs. This can help dictate the strategic direction of a company. It should also help to identify other opportunities to make a positive contribution that were not previously considered. 4 Create a co-operative network Next, companies should co-operate with external entities to work towards their chosen goals. This includes academic institutions, financiers, social movements, NGOs, and regulators. Collective action will multiply any impact, as many of these will be considering their own purpose and seeking to make an increased contribution to the SDGs. Exactly who to collaborate with will depend on which goals are involved and where. For example, international supply chains have a social dimension that may benefit from interaction with non-profit organisations on the ground in a variety of countries. Supply chains also need to become much more circular, rather than linear, from a resource perspective – an area where larger multinationals can have
best to use their organisation for driving systemic change within their sector and how to instil purpose within their own ecosystem. This will depend on the size of the organisation and its position in the value chain. For instance, Danish multinational brewer Carlsberg has taken on the role of changemaker, leading the changes in its packaging and supply chain to achieve the necessary sustainability goals. Larger companies can create a purpose infrastructure based on their own approach. However, this can mean divergent approaches to the same SDG as different companies play to their own strengths and respond to their unique environments. While all approaches should move us closer to the UN goals, some may prove more effective than others. These steps are part of a long journey, but a vital one if the world is to meet its net-zero targets to save us from catastrophic climate change and bring about a just, equitable society.
a particularly big influence. Co-operation with other companies, including competitors, both inside and outside the firm’s own industry is key, and is often essential for the wholesale transformation of sectors such as packaging, where multiple actors are involved and a critical mass is required for change. Companies must also collaborate with local and national governments to ensure regulations are well designed. Policymakers must impose regulation to guard against market excesses, including behaviour that undermines the SDGs. Lobbying from businesses will be accepted by an increasingly critical public, as long as it is transparent and aligned with the organisation’s external identity (a common failing by firms). Otherwise, organisations wanting to move further and faster than policies allow may suffer a commercial penalty from the public if regulation doesn’t keep up. 5 Create a purpose ecosystem At this stage, it may also be possible for larger companies to create and co-ordinate their own purpose ecosystem, behaving in a similar way to the smaller entities found in our research. Executives need to decide how
The 17 SDGs, represented by the icons above, lie at the heart of the United Nation’ s Agenda for Sustainable Development. They were adopted by all UN member states in 2015, creating a blueprint for a global partnership to provide peace and prosperity for all. They recognise that ending poverty and other deprivations must go hand in hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and preserving our oceans and forests. Warwick Business School is committed to embedding the SDGs in its research, teaching, and day-to-day operations. Alongside each article in Core , you will see one or more of the 17 SDG icons to show you which goals the associated research aligns to.
Find out more about our research on Sustainability at Warwick Business School.
Sustainable Development Goals
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