Business and Sustainability: Achieving the Sustainable Development Goals (SDGs)

In recent decades, climate change has caused catastrophic impacts on natural and human systems – from ecosystem destruction to deadly heatwaves. Mitigating and adapting to these changes through sustainable business development, staying within the ecological thresholds of the Earth, and achieving the Sustainable Development Goals (SDGs) is now more important than ever.  

But what are the SDGs, and what part can enterprise and individual business professionals play to help achieve the goals? We explore these questions and more below. 

 

What are the Sustainable Development Goals (SDGs)?

The SDGs are a set of 17 interconnected goals addressing a range of social and economic issues, from poverty and inequalities to economic growth and responsible consumption and production. The United Nations General Assembly adopted the goals in 2015 as part of the 2030 Agenda for Sustainable Development. Measurable change is important, so attached to each of the goals is a varying number of subordinate targets. 

1. No Poverty
2. Zero Hunger
3. Good Health and Wellbeing
4. Quality Education
5. Gender Equality
6. Clean Water and Sanitation
7. Affordable and Clean Energy
8. Decent Work and Economic Growth
9. Industry, Innovation, and Infrastructure
10. Reduced Inequalities
11. Sustainable Cities and Communities
12. Responsible Consumption and Production
13. Climate Action
14. Life Below Water
15. Life on Land
16. Peace, Justice and Strong Institutions
17. Partnership for the Goals

Read the full descriptions for each of the goals on the SDGs section of the UN website. 

 

What are the global net zero emissions goals?

SDG 13 is particularly relevant for organisations and businesses who wish to mitigate their climate impacts and make a positive contribution to sustainable business development efforts to stop global warming.  

Sustainable Development Goal 13 aims to “take urgent action to combat climate change and its impact”, while acknowledging that the United Nations Framework Convention on Climate Change (UNFCCC) is the primary international, intergovernmental forum for negotiating the global response to climate change. 

Goal 13 links directly to the net zero goals, which were developed in 2015 as a global commitment to climate action. Nearly 200 countries negotiated the Paris Agreement, pledging to limit the global temperature increase to below 2°C and pursue efforts to keep temperature change to under 1.5°C above pre-industrial levels. For the earth to stay below 1.5°C of warming, global anthropogenic CO2 emissions need to reach net zero around 2050 (IPCC 2018). Global progress towards achieving this goal can be seen on the Climate Action Tracker website. Achieving net zero within the agreed timeframe will help ensure that achieving the SDGs will remain within the planetary boundaries and thresholds that have been identified. 

 

How well are governments and businesses committing to the SDGs and net zero emissions goals? 

Achieving the multiple targets included under each of the SDGs is a ‘wicked problem’ of global proportions and complexity. It will require the concerted effort of government, civil society and business organisations and, for the latter in particular, will depend on sustainable business leadership.  

While there has been a significant commitment to the SDGs and net zero around the globe, the degree of commitment varies widely, and the pace of change is slow compared to what is required. You can learn more about individual countries’ commitment on the Energy & Climate Intelligence Unit’s Net Zero Scorecard.  

However, many local governments and businesses have integrated the SDGs successfully into their strategies and actions and are leading by example in their relevant sectors and environments. The C40 Cities Network showcases cities addressing climate action and sustainability while the World Business Council for Sustainable Development (WBCSD) is a comprehensive source of knowledge about sector wide initiatives towards net zero 2050 and the SDGs. 

Another one of many changes being made to help drive sustainable business development is that many organisations have recognised the importance of the SDGs and net zero and begun to address the sociotechnical challenges within their operations and planning. They are mobilising staff, innovation and resources accordingly, and creating specific sustainability roles within their workforce as well as empowering all employees to step up and take on the responsibility of championing sustainability within their individual teams, wider business or sector. 

To discover how aligned the world currently is on the global path to net zero, take a look at the University of Oxford’s Global Net Zero Progress tracker. 

 

Why are the SDGs important for businesses?

In addition to showing leadership and commitment to the global agenda of change articulated in the SDGs, there are many other core reasons why business and sustainable development should go hand-in-hand.  

Here’s how businesses can benefit from making the Sustainable Development Goals part of their culture, strategy and profile:

 

1. Innovation and opportunity 

The SDGs can serve as a catalyst for innovation and new business opportunities. Companies that develop products and services that address the SDGs can tap into new markets and attract new customers. A good example of such innovation is the Green Standards platform that repurposes office furniture – what they define as sustainable decommissioning – where furniture is resold, donated or recycled, thereby avoiding more landfill and encouraging circular thinking.  

 

2. Cost savings and resilience 

Adopting sustainable practices can also lead to cost savings for companies and future resilience to change. Energy-efficient buildings and processes can reduce energy costs, and sustainable supply chain practices can reduce waste and improve efficiency. 

Although there is a tendency to focus on short-term gains, such as renewable electricity, addressing emissions across the whole value and supply chain is both possible and a good strategy, as reported by the World Economic Forum. 

This is highlighted in an Oxford Smith School report on net zero emissions and the economy which notes ‘sharp reductions in the cost of renewable and resource efficient technologies,’ and that ‘green projects, such as renewable energy infrastructure lead to higher numbers of jobs created […] and long-run cost savings.’ 

 

3. Risk management 

Companies that consider and address environmental, social and governance (ESG) risks can improve their resilience and enhance their long-term sustainability. The SDGs can provide a useful starting point to frame and explore these issues. 

Discussing integrating ESG into the boardroom, Ranjita Rajan, Executive Chair of the Oxford Global Partnership and Business Fellow at Oxford Smith School, notes: ‘Environmental, social and governance criteria have become shorthand for the non-traditional, extra-financial factors considered by businesses as crucial to managing opportunities and risks … Today, an asset manager who doesn’t communicate around their ESG capabilities is deemed a pariah.’ 

 

4. Reputation and brand value 

Companies that actively integrate the SDGs into their culture and operations can build a positive reputation and brand value among their customers, employees and investors. This can lead to increased customer loyalty and retention, employee satisfaction and retention, and investor confidence. 

However, businesses should be careful not to greenwash, which is the practice of over-selling their sustainable practices and misleading customers. In an article on corporate greenwashing, Dr Benjamin Franta, Senior Research Fellow in Climate Litigation on the University of Oxford Sustainable Law Programme, notes that ‘Companies that lead the way in developing true green branding – backed by meaningful action – may see rewards, while those putting image over substance may face legal liability.’ 

 

5. Regulation and compliance 

Governments around the world are increasingly introducing regulations, standards and policies that address net zero and the SDGs. Companies that make a genuine commitment to net zero are better positioned to comply with these regulations and policies. The litigation and penalties for corporate greenwashing are rising and companies who ignore this risk suffer reputational and financial losses. 

 

Overall, the SDGs and net zero provide a roadmap for businesses to become more sustainable and responsible, while also creating new opportunities for growth and innovation.

 How can businesses incorporate SDGs into their strategies?

• Assess current operations: To begin with, businesses should review their current operations and identify any negative impact they may have on the environment, society or economy. This analysis will show businesses where they stand with respect to achieving SDGs and identify areas where they can improve. An inventory of business tools for assessing this can be found on SDG Compass platform. 

 

• Prioritise SDGs based on business activities: Once a business has analysed its impact, it should prioritise achieving SDGs that are most relevant to its activities. For example, a company that produces and sells solar panels may most obviously identify SDG 7 (Affordable and Clean Energy) as their most appropriate goal but perhaps looking at their materials and supply chains could identify SGD 12 (Responsible Consumption and Production) something to aspire to encourage looking at improving their supply chains and end of life of their products. 

 

• Set specific and measurable goals: Businesses should set specific and measurable goals that align with the SDGs they have prioritised. These goals should be integrated into the company’s overall strategy and sustainability plan, and regularly reviewed through sustainability reporting, to ensure progress is being made and accountability to customers, shareholders and society is transparent. In turn, this communication can help to build trust and enhance the company’s reputation, both in sustainable business development and as a whole. 

 

• Collaborate with stakeholders: Collaboration with stakeholders such as suppliers, customers, employees and local communities can help businesses to pursue SDGs. For example, businesses can work with local communities to improve access to education, healthcare and clean water, which can help to achieve SDG 3 (Good Health and Well-Being) and SDG 4 (Quality Education). 

 

• Integrate sustainability into the supply chain: Businesses can encourage sustainability throughout the supply chain by working with suppliers to reduce their environmental impact and improve social and economic conditions. This can also help in achieving SDGs, such as SDG 8 (Decent Work and Economic Growth) and SDG 5 (Gender Equality).  For example, many organisations have signed up to anti-slavery standards. 

 

What are some examples of businesses successfully implementing SDGs?

One of the core business challenges the SDGs pose is the energy transition to renewables. A company leading the way in this area is Italian electricity company Enel. Saïd Business School’s case study report on Enel states that the company’s business model ‘prioritises addressing climate change, a just energy transition and continually ethical, transparent relations with all our stakeholders’. 

Consequently, Enel has accelerated the decarbonisation of its energy generation assets and developed new product offerings that assist customers in transitioning to a low-carbon economy. For instance, the company has invested heavily in shoring up renewable energy projects while simultaneously divesting thermal generation assets. 

Another great example is the 50L Home project, a collaboration engaging multiple private, public sector and civil society actors to deliver clean, safe water to communities in need. Focused on an equitable distribution of an increasingly scarce resource – water – to homes, this project highlights multiple SDGs and the collaboration required to deliver sustainable solutions to a growing global water crisis. 

 

What are some challenges businesses face when trying to implement SDGs?

• Lack of awareness: Many businesses are not aware of the SDGs, their importance, or why they should integrate them into their operations. This lack of awareness can make it challenging to get buy-in from employees and stakeholders and can slow down progress towards SDG implementation. If you are a business decision-maker with a knowledge gap in sustainability and the SDGs, explore our online short courses in sustainability.

 

• Integration into existing processes: Integrating the SDGs into existing processes and operations can be challenging and may require businesses to re-examine their operations and make significant changes. For example, a business may find it testing to rethink its existing business model across its entire value and supply chain. However, doing so is essential for that business’ future survival and creates an opportunity for innovation. 

 

• Cost and resource constraints: Achieving SDGs can require significant investments in new technology, employee training, and sustainability initiatives. Smaller businesses (SME) may face budget constraints that make it difficult to allocate resources towards implementation. As outlined by the OECD, SME make a huge contribution to sustainable change whether directly as social enterprises or though their role in supporting local employment. Ultimately, commitment now provides opportunities for business to flourish in the future. 

 

• Measuring progress: Measuring progress towards SDG implementation can be challenging, especially if the company does not have robust monitoring and evaluation systems in place. It can also be difficult to attribute changes in social or environmental impact to specific SDGs. This concern has given rise to a shift towards ESG frameworks and reporting as well as generally greater sustainability reporting and strategy visions, including commitment to reduce scope 3 emissions. While capturing and monitoring supplier emissions is harder, it is becoming a mark of sustainable business leadership. 

 

• Balancing multiple goals: Businesses may face trade-offs when trying to achieve multiple SDGs simultaneously. For example, reducing greenhouse gas emissions may require significant investments in renewable energy, which may impact profitability in the short term and reduce funding available for other initiatives.  

 

• Regulatory environment: Some businesses may face regulatory barriers that make it challenging to implement SDGs. For example, regulations may make it difficult to use recycled materials in manufacturing or may limit the use of renewable energy sources. On the other hand, the EUs Industrial Emissions Directive (2011) which helped clean up the air pollution from coal fired power plants has also been part of the story of the climate benefitting from less coal burning. The right regulations and policies are essential to create an enabling environment for action on the SDGs.