As we discussed last week, only six percent of the materials we consume globally gets recycled into circular flows. But by underlining that the design of our economy and society should be restorative and regenerative, the SDGs are offering a new way for business to do business.
And there are a range of businesses across Australia embracing this challenge.
IKEA, for example, is thinking seriously about the circular economy. It has launched a take-back service at its Sydney store in Tempe, and is offering to resell used furniture.
The announcement was made at the same time as the release of its People & Planet Positive 2018 report which said that the company’s ambition is to be 100% circular and climate positive in its operations by 2030.
The Tempe store is a trial initiative but one that is sorely needed. According to Ikea, last year more than half of Australians (56%) threw away 13.5 million pieces of furniture that had the potential to be recycled, or repaired and reused. Yet one quarter would have kept their furniture if they knew how to repair or reuse it. And two-thirds – or 67% – were happy to buy second-hand pieces.
Another sector that has performed well is the Australian property sector, which has been a world leader in reducing carbon emissions. Recently a raft of our major property companies such as Stockland, GPT, and AMP Capital were among the first globally to sign up to the World Green Building Council’s Net Zero Carbon Buildings Commitment in San Francisco.
The Commitment challenges companies, cities, states and regions to reach Net Zero operating emissions in their portfolios by 2030, and to advocate for all buildings to be Net Zero in operation by 2050. The Commitment also requires these achievements to be verified on an annual basis by an independent third-party system.
An example from the financial sector is Cbus, an industry super fund for building and construction with 750,000 members and $40 billion under management. It clearly links its contribution to the SDGs with its current strategy.
BHP’s CEO Andrew Mackenzie referred to the SDGs in his message in the company’s 2016 and 2017 sustainability reports. They weren’t mentioned in his 2018 message but what was included last year was an inaugural water report, an industry first.
The reporting behavior of our largest companies often set trends for other businesses so as Mackenzie himself stated:
“We hope the disclosure of our water performance will encourage others to report on their water usage and increase corporate transparency and accountability for water stewardship.”
It’s a well-known axiom in business that you must measure what you seek to manage. In recognition of this basic assumption, companies need to understand new facts about their businesses such as the true cost of capital associated with the use of resources like water, and the true impact of their operations on society.
As demonstrated, there are some standout companies and sectors in Australia. But on the whole, business awareness and understanding of the SDGs here – and in the Asia Pacific — is relatively low right now.
And our region is not alone.
According to a 2017 KMPG Survey of Corporate Reporting:
Other findings from the study showed that:
But only 8% demonstrated the business case for the SDGs
However, as in Australia, there were some standout companies.
Samsung, for example places the SDGs in the centre of its Sustainability Strategy Framework. It identifies its potential positive and negative impacts and describes what it’s doing now and will do in the future to enhance the positive and improve the negative impacts.
Perhaps obviously, Pfizer identifies Good Health and Wellbeing as its priority goal, It provides a narrative description of how it’s addressing SDG3 and clearly sets out its progress against the specific targets for this goal.
Johnson & Johnson is focusing on three of the goals – Good Health and Well Being; Gender Equality; and Partnerships for the Goals. On the company’s website you can read about their 2030 Promise in these areas and see the progress they’re making to achieve the targets they’ve set.
Citigroup is another company that has made multiple SDG related commitments, which are detailed in its Banking on 2030 report.
A final example is Siemens, a German industrial conglomerate specialising in electrification, automation and digitalisation. The company is a leading supplier of systems for power generation and transmission as well as medical diagnosis.
Siemens explicitly uses the SDGs to determine the value the company creates for society and has developed a proprietary method it calls Business to Society.
This allows Siemens to assess its social impact around multiple dimensions, such as driving economic growth, enabling job creation and skills, advancing innovation, sustaining the environment, improving quality of life and improving societal inclusion.
Importantly, it also allows it to understand its contribution towards the SDGs and to measure its social impact on a project, on a country or on a global level.
These efforts are paying off for the company. A recent survey by Forbes asked 15,000 respondents from 60 countries to rate the trustworthiness, honesty, social conduct, performance, and quality of products and services of all Global 2000 companies. Siemens was ranked the world’s top regarded company.
For those companies who don’t know where to start with the SDGs there are a host of tools available to help.
There is the SDG Compass developed by GRI, the UN Global Compact and the World Council for Sustainable Development.
GRI and the UN Global Compact have also developed a publication called Business Reporting on the SDGs which suggests actions a business can take to contribute to the goals.
Future Fit, a not-for-profit UK-based organisation, collates and curates credible and robust third-party resources into one unified self-assessment tool: the Future-Fit Business Benchmark, that any business can use to guide, measure and report on their progress.
Finally, the University of Cambridge’s Institute for Sustainability Leadership has come up with a ten-year plan called Rewiring the Economy.
It starts from the principle that the economy can and should be delivering the outcomes demanded by the SDGs.
The plan offers the three key actors in the economy – business, government and finance – a set of ten interconnected tasks to guide the structural and cultural changes that will be necessary in the economy to do this.
For business leaders the four tasks it suggests are to:
Quite obviously business is a vital actor in the achievement of the Sustainable Development Goals.
But as the latest report released by the Intergovernmental Panel on Climate Change emphasised, radical changes are required in all aspects of society if we’re to stay within 1.5 degrees Celcius warming. Which means we should all be thinking about the individual roles we can play.
Last year the global change agency Futerra, and one of the UN’s sustainable lifestyle programs, with support from a range of others, launched a joint project to help billions to take personal action on the SDGs.
This project was inspired by a hackathon Futerra held on the SDGs and personal actions. The result went viral with thousands of people, business leaders and activists sharing the idea and suggesting additional actions and consumer behaviours. https://www.youtube.com/watch?v=i8aymVzOU0A
So let’s remember, that while our institutions have the responsibility to change the world, they need the individuals that work in them to get there.
They need you and me to play our role in defining the future and making tomorrow better than today.