Wake up call for businesses

"If business owners were thinking about to keep up with recent trends by undertaking a sustainability journey for the first time, they would be forgiven for getting totally confused with the plethora of acronyms that dominate the subject: CSR; ESG, CDP, GRI."

Says, Alan McDonnell founder of Good Governance Solutions, who works with business leaders on the implementation of the 17 Sustainable Development Goals, launched in 2015 by the United Nations. Alan provides an easy to digest guideline on how a small business could turn these goals into a market advantage.

Entering into the world of sustainability

The topic of sustainability has taken on many forms in recent years. It has ranged from environmental contamination including all kinds of pollution to climate change, carbon emissions and more.

By all credible accounts, we are faced with an uncertain global future that is already becoming a reality with extreme weathers events, mass wildlife extinctions and the breakdown of the biodiversity universe.

Only now these matters are not only the concerns of environmentalists but business leaders.

The business world has long had an understanding of its social role and Corporate Social Responsibility (CSR) has become a building block of most corporate strategies across all commercial sectors.

In more recent times we’ve seen a revolution in the institutional investment community with the emergence of Sustainable Finance with it's Environmental, Social and Governance (ESG) metrics influencing investment decisions on a global scale.

Since its launch, the Sustainable Development Goals (SDGs) have become the only game in town.

They should not be thought of as noble or optional aspirations. Instead, they should be looked on as necessary changes to our collective behaviour on this planet that are vital to our very existence as a species and a game changer for a business who wants to strive in this new economy.

The role of business

All of the 17 goals are binding on each member state that signed up to them but there was a realisation that they could not be achieved without active collaboration with the business and civic communities.

I would say: Immerse yourself in Sustainable Development Goals! Everything you need to know is there.

Leveraging Potential Business Opportunities

According to a report by the Business & Sustainable Development Commission (2017), the SDGs could globally generate US$12 trillion in business savings and revenue across four sectors by 2030: energy; cities; food and agriculture; and, health and well-being.

The report also estimates the creation of 380 million new jobs linked to these four sectors over the next ten years.

The main challenge for businesses is to prioritise the goals relevant to their sector, identify and mitigate its risk impacts while also spot and leverage business opportunities they present.

On the international stage, we see many multinational companies, like Unilever leverage health and well-being opportunities by aligning the SDGs with their strategy, culture and purpose.

Paul Polman, former Unilever CEO explains the rational for this approach by saying that “it’s not about putting purpose ahead of profits, it is purpose that drives profits”.

How to get started?

A common mistake many businesses make is to focus purely on SDGs related to environmental issues. This portrays a fundamental misunderstanding of what sustainability means.

At the start, it is well worth the time to glean a better understanding of the Goals and their inter-related economic, social and environmental dimensions.

The practical first step is prioritising the SDGs which requires drilling down to see which of the 169 Targets related to the 17 Goals are relevant and significant to a given business or its sector.

Having identified the KPIs and Targets relevant and significant to the business or sector, the prioritised SDGs will reveal themselves. Quality over quantity might be the best principle here: do not be concerned if they are a low number!

Materiality Analysis

Each business has to go beyond its own analysis of what is significant, also needs to consult with its key stakeholders including, of course, customers. That way you can determine which of your prioritised Goals and Targets influences their decisions.

By marrying the results of both assessments, you will have completed the Materiality Analysis process that addresses your internal and external dimensions allowing you to prioritise with confidence.

Corporate Governance

Corporate governance defines best-practices in how a board should set and oversee the achievement of its organisation’s strategic objectives.

It has become increasingly evident that those practices need to be updated by embedding the SDGs and aligning strategy with them.

Codes of Governance need to be urgently revised to set the SDGs as the future pillars of good governance. Board members should be deeply inducted into sustainability so the tone-at-the-top embeds SDGs into culture and strategy. Unless the board takes such a leading role, any effort is destined to fail. It starts and stops in the boardroom.

Boards across the public, private and non-profit sectors will become exposed to accusations of negligence if they do not embrace relevant Sustainable Development Goals to their sector.

My mission is to help boards avoid such exposure and take the leading role in ensuring the organisation is dedicated to controlling the risks and leveraging the opportunities presented by the SDGs.

It is such a delight to see the young holding businesses and governments to account on the sustainability of their world. It is they who will give your business a future 'licence-to-operate'.

Forming sectorial SDG networks in Ireland

The large corporates in Ireland have embraced this challenge very well but 96% of business falls into the SME (Small and Medium Enterprise) category with very limited time and resources. Engaging in the SDG challenge needs indefinite commitment. Greenwashing can be seen a mile away and does irreparable damage to a company’s reputation.

State bodies and Regulators are also well-positioned to play a vital part and form Sectoral SDG Networks as they preside over sectors, be that transport, food, pharma, agriculture, energy, health etc.

Local movements in Ireland

Apart from the business sector, many State bodies are active especially the Department of Communication, Climate Action and the Environment. In 2018 they reported at the UN on Ireland’s progress using national KPIs and formed the National SDG Forum which is facilitating many civil society engagements.

SDGs are now filtering down to our local communities who are embracing their three economic, social and environmental dimensions.

One of my favourite examples of this is the recently emerging Dundrum 2030 Sustainable Community. Their mission is to take practical local initiatives to meet the Sustainable Development Goals in collaboration with all relevant stakeholders.