How Businesses Can Create Value Supporting the Sustainable Development Goals
The United Nations developed a proposal for society to solve some of the world’s greatest challenges with the objective of achieving a sustainable world by 2030. To this end, they have developed 17 Sustainable Development Goals (SDG’s), which are broken down into 169 goals. Though the goals are set separately with their own targets and indicators, they cannot be treated as independent. Developments in one goal affect others.
Why should companies work towards achieving these global goals?
Governments, international organizations, and businesses recognize the benefit of pursuing a better future for all of us.
A system perspective is key to understanding the complexity of these issues.
It’s a way to look at the world where we recognize that economic, social, and environmental systems are interconnected, and they affect one another. Understanding the interconnections between the goals allow synergies and trade-offs to be identified.
Synergies occur when advancements towards achieving one goal also advance progress towards achieving another goal. For example:
Imagine a friend of yours telling you how his/her company is successfully working towards some of these goals. In developing countries, more than 800 million people are still living on less than $1.25 a day. While investing in these countries your friend provides jobs to reduce poverty (SDG 1).
The improved economy has also opened new business opportunities. Moreover, the extra food produced by his/her factories helps relieve hunger (SDG 2). Your friend feels strongly about fair employment. The average working woman earns 24% less than men globally, by practicing gender equality (SDG 5) the female staff are much happier, and the company performance has greatly increased.
A sustainable business model is necessary for sustainable profits. Understanding these challenges and aligning business strategy with the goals reveals important market opportunities, creates value and enhances reputation.
Hitachi’s Social Innovation Strategy to Create Value in Support of the SDGs
Hitachi Social Innovation.
Hitachi started 110 years ago in a small repair shop in Ibaraki (Japan). Their mission is to contribute to society through the development of superior original technology and products. Hitachi had society at the center and forefront of their business. It hasn’t changed over the 110 years that they’ve been operating.
If you have the right culture in your company it really allows you to take great strides forward.
They have five key strands of mobility, smart life, industry, energy, and I.T. And they ask how they can build an increased social environment and economic value for their customers.
They started by going out to all the business groups. They got everyone involved, they got every business to consider the SDGs, look at the goals, what it meant for them, and asked them to identify those that were most critical and key to them (not just in terms of where they could deliver business opportunity but also where they impacted on Hitachi as a business) at the end they came up with five SDGs which they linked to their business strategy and another six SDGs that they felt linked to their corporate commitment to society that also has a huge impact on them in the long term.
The ones Hitachi has identified are those where they felt their business can have an impact and deliver products or services that can help achieve those SDGs.
They have developed it in four phases:
- Phase 1 and 2 (FY 2017): Understand sustainability and the SDGs, clarify how key businesses are linked to the SDGs.
- Phase 3 (FY 2018): Incorporate sustainability perspectives in their management strategy.
- Phase 4 (FY 2019 and beyond): Explore new business possibilities based on the motives of solving social issues.
Embracing the SDGs can help businesses prepare for the future by innovating sustainable business models and solutions. But how can businesses create value with a corporate strategy that successfully contributes to the SDGs when they are so multifaceted?
It’s not easy.
Managers all over the world from small entrepreneurial startups to large multinational corporations are grappling with the complexity of achieving the goals. As the leaders of tomorrow, it’s crucial that you are aware of the broader context of business and think about how you can contribute to a better society.
How businesses are contributing to achieving the SDGs
The Evolution of Carbon Finance Projects
Imperial College London did some research that assessed the value of what would still be called co-benefits aligned with the SDGs. The research calculated that for every tonne of carbon emission reduction approximately six hundred and sixty-four dollars is delivered in additional values through things like employment, financial savings, and biodiversity conservation.
For example, Taylors of Harrogate, which is a tea and coffee company based in the UK, is supporting carbon finance projects directly in the supply chain to reinforce the small-hold farmers that are really critical to the quality of its product in Kenya.
This is through a community reforestation project that Taylors is able to offset its missions through the carbon from the trees that are planted by the tea farmers.
But more importantly the farmers are able to improve their financial and food security through conservation farming techniques, improved land productivity and new income streams from things like fruit trees and beekeeping.
Sustainable Development Goals provide the framework that enabled current to position their work and impact frequently in language that everyone else is using and provide them with a set of clear targets that helps them to evaluate those additional benefits that carbon finance projects deliver.
Climeworks Captures And Removes CO2 From Atmosphere
Climeworks is a Swiss company trying to help reverse climate change using reverse direct air capture technology, removing CO2 from the air (SDG 9).
They use a technology where direct air capture catches CO2 and removes it from the air. The air is drawn into a collector with a fan, and CO2 is captured on the surface of a highly selective filter material that sits inside the collector. Once the filter material is full of CO2, the collector closes and is heated to around 100 degrees Celsius (SDG 7).
The captured CO2 is then mixed with water (SDG 6) and pumped deep underground where it mineralizes and can be stored permanently for thousands of years (SDG 12).
Multiple climate studies published clearly state that in order to achieve climate change not only do we need to do everything we can to reduce emissions, we also need to actively remove carbon dioxide from the atmosphere.
That’s why Climeworks offers a solution by empowering people to reverse climate change by permanently removing carbon dioxide from the air (SDG 11).
Vodafone is Taking Action Through Strategy.
Vodafone is a perfect example of a company that has integrated SDG thinking into strategy. They’ve looked at how their networks, their products, and their services as well as the Vodafone Foundation, all can have an impact on specific SDGs, and they identified specifically on five SDGs. What they have done is articulate this in a strategic framework and it’s articulated and communicated on their website.
The SDGs are critical to ensure businesses get value from their programs.
Now when they evaluate potential products that might meet their science requirements they’ve added a whole new level of assessments to consider their additional activities within the context of SDGs targets.
Although their projects activities may appear to be directly aligned with the SDG, it is really critical that they understand how to measure those impacts in a robust and transparent way. Within each goal is a set of targets that provides specific direction for addressing that SDG and they’re working with their project partners to gather and monitor results against the relevant SDG targets.
- Improved Cookstoves, Kenya.
The ClimateCare Limited project employs women as cookstove entrepreneurs, with one-third of distribution businesses owned by women.
It helps to reduce indoor air pollution leading to improved health (SDG 3) and it reduces the time women and children spent collecting fuelwood contributing to gender equality which is SDG 5 and consequently alleviates pressure on local woodlands which helps to conserve life on land SDG 15.
- Forest Conservation in Indonesia
Reducing Emissions From Deforestation and Forest Degradation (REDD+) also frequently impact several of the SDGs REDD+ projects which is clearly a concern of its habitat and wildlife [SDG 15], plus implementing community-based activities that can improve food security [SDG 2], as well as creating jobs [SDG 8] and improve local infrastructure [SDG 9].
Training on the growth of cash crops such as fruit trees offers communities an alternative source of income.
When companies capture the opportunities presented by the SDGs and use the framework to integrate sustainability across the organization, the goals help the company to make decisions and serve as a core in the company’s values. Moving from short-term strategic thinking to looking at the company’s role in society in the long term helps them to create a strategy and make decisions that ensure the long-term viability of the company.
The Sustainable Development Goals represent the most pressing economic, social and environmental challenges that the world faces at the moment but we can see them as opportunities rather than as threats. It’s very exciting to see that so many businesses are committed to achieving the goals and are innovating breakthrough business models to contribute to a brighter future for all.
If you want to learn more about how innovation & technology work as catalysts for achieving the UNSDGs, please join us at the free online event called Wake-up Call for Sustainable Innovators. Date: 30/09 at 09:30 (CET).
Cool read, thanks!