Driving business growth and productivity through the SDGs

Lara Koritzke, Director of Development and Communications at ISEAL, reflects on the Sustainable Development Goals and how sustainable business can contribute to growth.

I grew up in Los Angeles, the last city that anyone would consider sustainable but, many years on, we know so much more and a couple of years ago the mayor released its first sustainable city plan. The point is, we just cannot afford to not care deeply for the wellbeing of our society and environment – and businesses, investors, and governments are quickly bringing the challenges of ensuring sustainable business to the top of the boardroom agenda.

At a GreenBiz event in February business leaders converged to discuss the challenges, trends and opportunities in sustainable business. While I was there I hosted a lunch table discussion on the universal truths for credibility. However, quickly, the conversation turned to the credibility challenges the business sector faces in meeting the Sustainable Development Goals (SDGs).

The 2030 agenda for sustainable development is made up of 17 goals and 169 targets, which were adopted by 193 UN member states in September 2015. The goals range from promotion of sustainable agriculture, economic growth and decent work to the sustainable management of terrestrial and marine ecosystems.

Many leading businesses have made huge commitments to help address global issues, such as deforestation and climate change. However, if we are to succeed in making a difference, all businesses need to deliver against the SDGs.

Collectively ensuring the greatest impact and most efficient use of resources

The majority of discussion was around how we can truly meet the goals and monitor progress and what the opportunities might be. And, it quickly became clear how much the private sector faces a number of challenges in meeting the SDGs. These range from ensuring transparency and impartiality to duplication of effort. Although competitiveness and individual action on sustainability are necessary, it is critical to be coordinated and work together to ensure lasting impacts. I don’t think anyone will argue that this will require huge effort over the coming years if we are to achieve the goals.

However, together we have the opportunity to develop strong partnerships where businesses, governments and NGOs can engage with each other around shared sustainability aims. Not only to set mutual targets, but also to create shared tools and map out a division of work with partners in supply chains.

Measuring impact

Where collaboration is already happening, businesses are not only creating lasting change but reaping the benefits. Many businesses work with sustainability standards because of their focus on economic, social and environmental improvements. Credible standards provide guidance on what better production looks like and the independent assurance that many businesses seek.

Overall, sustainability standards address a number of the challenges that were discussed during the GreenBiz conference, but what is key is the ability to measure progress and assess whether or not a certain level of performance on sustainability is reached.

ISEAL recently published a report, co-authored with WWF, SDGs mean business: how credible standards can help companies deliver the 2030 agenda, which shows how businesses can contribute to many of the SDGs by using credible sustainability standards to scale up sustainable practices and transform their sectors. One example in the report, highlighting contributions to SDG 3: good health and wellbeing, refers to a 2014 study which found that workers on certified tea estates in India are healthier than those on non-certified estates. Whereas workers on estates with UTZ and other certifications are absent for health reasons an average of 14 days a year, on non-certified farms they are absent for 24 days a year on average. And, there are many more examples illustrating how standards contribute towards achieving the SDGs.

Sustainability is good for business

Last month the Business Commission released a report, Better Business, Better World, which identified an urgent need for businesses to rebuild trust with society, tackle social and environmental challenges, and open up 60 key market hot spots which, according to the report, have the potential to grow 2-3 times faster than average GDP over the next 10-15 years.

The report goes on to reveal how a sustainable business model makes good business sense, with potential economic prospects worth up to US$12 trillion and an increase in employment by up to 380 million jobs by 2030.

Ultimately, the report suggests that the SDGs at the core of the world’s economic strategy could drive major development in growth and productivity. Businesses that are already working towards the SDGs are seeing advantages, from expanding into new markets to eliminating risks from their operations. The findings in this report are reinforced by a recent Unilever study, which found that one in three consumers choose brands based on sustainability commitments. And, investors are also starting to carefully study the sustainability risks of their portfolios.

Many businesses that work with or are certified by sustainability standards are already realising benefits beyond positive social and environmental impacts. For example, a recent True Price report found that certified cotton from India is 52 per cent more profitable than non-certified, and certified cocoa from Côte d’Ivoire 49 per cent more profitable. And, a 2014 study evaluating the impact of Fairtrade on smallholders and workers in the banana sector in northern Colombia found the average income for banana farming households since joining Fairtrade increased 34 per cent.

Moving forward

The year ahead is when many businesses are going to be rolling out their plans to meet the SDGs. However, unless those plans are robust, they will quickly lag behind the early adopters.

As highlighted during the GreenBiz event, there’s still a lot of work ahead of us all. For businesses that want to take a truly robust approach, they need to be thinking about targets for specific sectors and commit to annual reporting on their SDG contributions.

Higher levels of investment and new cost-sharing arrangements are needed to create sustainability impacts through sustainable sourcing. One vital element to make supply chains more sustainable will be to shape the financial sector to incentivize responsible and sustainable sourcing.

In addition, it’s essential to keep governments accountable for national progress on the SDGs, and both civil society and the private sector can play a role in this.

Finally, the private sector can help to lead research into innovations, whether this is in supply chain logistics or other areas. Already businesses are partnering with sustainability standards to investigate improved approaches to major global challenges.

Last year at our Global Sustainability Standards Conference you couldn’t help but notice the changing nature of the conversation around certification and the challenges ahead. It quickly became clear, that we must address these collectively as a movement working closely with global business leaders.

We have 13 years to meet the SDGs and it is through the commitment of progressive businesses who are aligning their strategy with global sustainability goals that we will ultimately see global impact.