As corporate claims about their contribution to the Sustainable Development Goals (SDGs) multiply, distinguishing credible action from ‘SDG-washing’ becomes more important. The World Benchmarking Alliance (WBA) is one initiative providing clarity by ranking companies on their SDG performance. ISEAL is inviting its stakeholders to join this dialogue on how a company’s SDG performance can and should be measured.
Almost two years ago, ISEAL and WWF published their joint report SDGs mean business, arguing that sustainable sector transformation is an essential driver of SDG progress and that standards have a pivotal role to play. Since then, many new initiatives have been launched, PwC recently reported that 72% of companies now mention the SDGs in their annual corporate or sustainability reports.
However, one important missing piece is private investment. While we have seen a growing awareness around the SDGs, recent estimates by UN Environment indicate the current SDG financing gap is close to 2.6 trillion USD a year. It is also clear that to ‘unlock’ private investment, finance actors will need accurate and reliable metrics that capture sustainability impact. This is a challenge - data from PwC shows that only 23% of companies have developed and publicized meaningful SDG performance indicators.
The potential of corporate benchmarks
One way for investors and others to have a more accurate picture of corporate SDG performance is through benchmarking. Many types of sustainability benchmarks exist which rank or score companies. Some are part of advocacy efforts by leading NGOs (eg. Oxfam’s ‘behind the brand’), others have been created by specialised companies or consultancies such as RobecoSAM.
A promising new effort in this space is the World Benchmarking Alliance (WBA). It aims to translate the SDGs into a set of industry- and goal-specific benchmarks, and then apply them to a selection of the most influential companies active in a particular sector. Styled after the Corporate Human Rights Benchmark, which scores 101 of the largest publicly traded companies, the WBA’s benchmarks will be developed through open consultation. Importantly, the underlying data and methodology behind the process will be freely available.
Several finance actors, such as Aviva Investors, are supporting the WBA’s benchmark development and have indicated they will make them part of their investment policies.
Integrating credible standards: how to engage the WBA in 2019
The WBA is currently planning to develop five benchmarks, covering food and agriculture, gender equality and empowerment, seafood, climate and energy, and digital inclusion. These are important opportunities to coordinate action on the SDGs. However, whether the benchmarks will accurately reflect performance and reward the right type of corporate behaviour, such as credible certification, depends on how they are developed
ISEAL invites its members and stakeholders to engage with ongoing and upcoming WBA’s consultations.
If you are part of the ISEAL community, sign up for our two community webinars:
Thursday, 24 January 2019, 2:00pm - 3:00pm GMT
Thursday, 24 January 2019, 3:00pm - 4:00pm GMT