Combining Ambition and Realism: 4 steps for business to leverage the SDGs and maximize their impact
By Jennifer Morton, Analyst at NewForesight
Companies today are looked to more than ever to drive the sustainability agenda, at a time when such challenges are increasing in complexity and scale. This leaves organizations which seek to lead in sustainability facing the balancing act of having to set ambitious goals while being mindful of the reputational risks that can make or break their business. Yet, solving tough sustainability challenges is not up to one company alone. Meeting the SDGs requires different sector stakeholders joining forces and aligning their resources and efforts to drive lasting impact together.
The UN Global Sustainable Development Goals (SDGs) have emerged as an essential tool for creating a common frame of reference for global sustainability efforts. Using the SDGs, different actors can set targets and track their progress and impact according to an internationally recognized sustainability framework, using collaboration and shared learning to create lasting change.
In this context, how can individual companies play their part in the collective efforts that are needed to achieve the global goals? Our experience working with clients across diverse sectors has shown us that following these 4 steps can help companies derive the most value from the SDGs–for the wider good and for their business:
- Aligning with the SDGs in focal areas of sustainability
- Translating SDG-aligned goals into quantifiable targets
- Implementing robust credibility frameworks to communicate real impact
- Collaborating to go further, together
Align with the SDGs in focal areas of sustainability
The SDG framework is one of the most powerful tools companies have to ensure their sustainability efforts are aligned with, and understood as part of, a broader improvement agenda. Yet, the SDGs are often considered too high-level or generic for companies to engage with, and no company alone can solve all the global goals.
To uncover the value of the SDGs, companies should focus on select elements at the core of their sustainable business activities, and map (or even quantify) how these translate into progress towards specific SDG targets. Ensuring such linkages are communicated in the common language the SDGs provide is important for ensuring companies can more directly attribute any progress achieved to the result of their activities.
Translate your SDG-aligned goals into quantifiable targets
To turn this mapping exercise into actionable progress towards the SDGs, the next step requires setting company-level goals. To be effective, such goals must be S.M.A.R.T—specific, achievable, realistic, timely—and, crucially, measurable. In a study by Bain & Company, setting quantifiable targets was found to be the most critical factor behind successful flagship corporate sustainability programs. Alongside galvanizing a sense of shared mission and ambition internally within the organization, quantifiable targets were found to instill a culture of transparency between these companies and their stakeholders. This helped to enhance the value of these firms’ sustainability impact, whilst an attitude of openness, learning, and improvement helped mitigate any reputational risks.
The challenge comes in ensuring any quantifiable targets set by companies are both relatable to the SDGs, as well as realistic for your company. This raises a number of crucial questions, such as:
- On what topic does your company possess the capacity, know-how and resources to make a credible contribution to the SDGs?
- What are realistic SDG-linked targets for your company given the wider enabling environment you operate in?
- How can you secure internal alignment for these SDG-aligned goals and targets, as well as widespread external legitimacy and support for your efforts?
As many companies today operate in complex supply chains across many countries worldwide, it can be extremely complex to find answers to these questions. A standardized method for mapping, evaluating, and monitoring sustainability interventions in a supply chain, such as the Service Delivery Models (SDM) approach, can help companies assess the wider sustainability contexts they operate in, and gain concrete data and insights about the impact of their current sustainability efforts. By using this model, which we have developed in partnership with IDH, businesses are better able to articulate areas where they can credibly contribute to the SDGs, and focus their resources in areas where they can actually have tangible and structural positive impact. In doing so, companies have the tools they need to decide on realistic targets when setting S.M.A.R.T goals.
Implement robust credibility frameworks to communicate real impact
Crucially, using the SDGs in a way that generates value and impact requires having the ability to make credible claims on impact. For this, credibility mechanisms are key. One powerful mechanism for driving this credibility is a ‘Progress Framework’ which is crucial for helping companies monitor sustainability progress, ensure credible data gathering, and provide concrete and verifiable data to communicate impact to stakeholders.
However, tracking progress without a solid Theory of Change (‘how do your activities lead to your vision of a better world?’) can lead to companies ‘disconnecting’ themselves in the process of communicating their impact. The way M&E data is communicated often has an unspecified or unclear connection to the wider landscape of sustainability. Such misalignment risks a company’s sustainability efforts not having the desired effect of engaging stakeholders and society in their initiatives, and blocks collaboration on sector-wide or global sustainability challenges.
The SDGs offer the ‘golden ticket’ for avoiding this common trap. Based on our experience designing Progress Frameworks for our clients, credibility mechanisms are most effective when SDG alignment is part of their design—starting with the initial indicator selection process, all the way to progress reporting tailored to the SDGs and their specific language. Such an approach ensures that companies can generate relatable and understandable results to ensure their sustainability efforts are part of a larger story, and that their impact is recognized accordingly.
Go far, together
Acting alone, companies can move fast in addressing sustainability issues, especially those that are limited to their own supply chain. However, the old adage rings true, that going further requires going together. The final SDG17–’partnering for the goals’–recognizes that cross-sector partnerships are critical for tackling the root causes of tough sustainability challenges, which often require the involvement of stakeholders such as local industry and government. Such partnerships should thus not be seen as separate goals, but integral in the approach to tackling any of the SDGs.
From organizing governance in sectors from cocoa, to coffee, to cotton, we have experienced first-hand the importance of creating the right incentives for stakeholders to collaborate. On a multi-stakeholder level, SDG-aligned target setting and progress reporting is vital, and this involves sector-wide goals, targets and Progress Frameworks. The CocoaAction Roadmap which we worked on with the World Cocoa Foundation, one of our long-term partners, is an example of these crucial components put into practice.
For a sector-level initiative to make sense for individual businesses, companies have to see the value in being part of a multi-stakeholder sustainability solution. In implementing transformational sustainability programs, companies are often in unchartered waters. Yet, by working together and setting long-term commitments, the weight of such a significant undertaking no longer falls on one company’s shoulders. Instead, there is an alliance of companies who are in it together for the long run, working towards a common goal with a shared, actionable strategy and a framework for progress tracking. Only then are risks and responsibilities shared and distributed between the collaborators, and the impact of their individual efforts are increased through synergy. That way, they really stand stronger together.
Want to know more on taking steps to make the SDGs work for your company?
At NewForesight, we understand the pressures and opportunities that companies in the public limelight are facing. Contact us to find out how we can help you take the steps you need to leverage the SDGs and turn your sustainability challenges into shared opportunities.