Leading Sustainably

The Path to Sustainable Business and How the SDGs Changed Everything

Trista Bridges, Donald Eubank

• Publisher: Routledge
• Year: 2020
• ISBN:
  9781000043808
• Edition: 1
• Topic: Economía
• Subtopic: Desarrollo sostenible

The business world is at an important crossroads. The age of the stakeholder is rapidly superseding that of the shareholder as climate change and political and societal shifts upend years of seeming prosperity. To move past this agitated age, business and society must learn to lead sustainably by putting purpose on equal footing with profit. The first step is understanding what's meant by sustainability and how it offers an opportunity for both business and society.

Inspired by the launch of the 2030 United Nations Sustainable Development Goals (SDGs), the book captures the ideas of more than 100 change makers from around the world about how business is putting sustainability at the core of strategy to survive, thrive, and realign its interests with society's. Leading Sustainably looks at how sustainability has evolved in a business context, offering powerful insights, key facts, and guidance on building sustainability capability within companies, measuring and managing impact, sustainable finance's transformation, and other topics critical to aligning businesses' central activities with sustainable principles.

The book introduces five vignettes profiling best-in-class companies that were sustainable from the start and international case studies on business sustainability efforts, spanning industries from hospitality to waste management, fashion, finance, and more. Finally, Bridges and Eubank provide frameworks and in-depth direction firms can leverage when accelerating their transition to more sustainable business models.

The book is a perfect guide for mid-level to senior managers seeking to understand this fast-changing business environment, how to factor sustainability into their decision-making, and why the SDGs changed everything.

1 How we got here

The story of sustainability and the SDGs

“A charter for the people and planet in the 21st century”

Let’s step back from that ideal future we just outlined and start with an introduction to all the currents that led up to the Sustainable Development Goals—commonly known by the acronym “SDGs”—and the growing movement of companies applying them to their own business models.

To be honest, you don’t have to read this chapter to understand what comes after in our surveys of where businesses are, how they are measuring and managing their progress, and what are the best corporate practices around the SDGs that we have discovered. You could skip it and still learn about what is most important to your career or your business in light of the launch of the SDGs.

But, if you want to know why the SDGs and sustainability in a corporate context are not just mere buzzwords or flashy trends, you will want to dive into this chapter at some point during your time with Leading Sustainably. Here we outline two things: why the SDGs represent the culmination of a transformation of how governments, international bodies, civil society, and for-profit businesses understand their responsibility to communities on the earth, and how businesses are embracing sustainability to improve their own operations and performance.

We’ll try not to get too wonky, but you know how it is when wading into the weeds of international treaties and conferences, or of the origins of intergovernmental organizations and such. And if you do pass by the “How we got here” section for now, and then have nagging questions about what this is all about, please come back to hear the full story later.

What are the SDGs?

First off, here’s a simple rundown of what the SDGs actually are—their structure, if you will: The Sustainable Development Goals are a “comprehensive, far-reaching and people-centered set of [17] universal and transformative Goals”¹ for society that were jointly developed and agreed upon by the representatives of all United Nations (UN) member countries in the 2015 declaration “Transforming our world: The 2030 Agenda for Sustainable Development”.

The goals can be categorized as specifically addressing the earth’s biosphere, society as a whole, or the economic sphere.

The SDGs are numbered and listed in order of their agreed-upon priority, i.e. the most pressing are ending poverty (1) and hunger (2), while peace, justice, and strong institutions (16) and partnerships for the goals (17) are important but come later (though they, of course, can help in the achievement of higher priority goals).

And the goals have a deadline, the year 2030, when the UN targets achieving each of them under the 2030 Agenda for Sustainable Development.

These goals were based on work done in a series of conferences that date back almost 50 years and were put into their final form in an inclusive UN consultation process that was held over five years. They were created by consensus and unanimously agreed upon by every UN member state.

Now it gets a little more complicated: Underneath the goals are 169 targets that elaborate on what they hope to achieve and 232 indicators that show how to measure progress. These targets and indicators are expressed at a country level, with common, standardized metrics that can be applied across all nations. In this, they act as a guide for countries on what they should be working on to improve internally and where they can create relevant policies to make progress on the goals.

The UN states that the “SDGs and targets are integrated and indivisible, global in nature and universally applicable, taking into account different national realities, capacities and levels of development and respecting national policies and priorities”.² While the organization strives to support implementation of the goals, how countries will formulate policies and actions to achieve the SDGs is left up to them to decide for themselves. Also, they are non-binding. Each country determines its own ambition, and proposed follow-ups and review processes are voluntary and country-led. Though there are no obligations or penalties, voluntary national reviews are scheduled to be held every summer at the UN’s High-level Political Forum, the annual meeting in New York to assess progress on the UN’s efforts, where countries can choose to report on their advancement on the goals.

Over the course of the countdown to 2030, the UN will assess overall progress of the agenda internally, and the structure of the goals can be updated and evolve as lessons are learned. Practically speaking then, the purpose and value of SDGs is in being a kind of framework that supports a common understanding of how countries are performing on managing the most serious human questions of our age.

Every year, progress on each goal is being independently tracked and reported on by a partnership between the German foundation Bertelsmann Stiftung and the UN’s Secretariat of the Sustainable Development Solutions Network, headed by renowned economist Jeffrey Sachs. Bertelsmann presents the performance of each country ranked in comparison with each other, with an analysis of their individual progress on every goal within their own borders.

And to be honest, as of 2020, countries individually and as a whole have been failing to make the necessary progress on the targets of the SDGs to achieve the goals by 2030. This recognition, only five years into the effort, should goad countries into upping their ambition and reaching beyond their borders through financing, new technology applications, capacity-building, and better trade and policies. Which leads us to the seventeenth and final goal: global partnership.

The seventeenth goal is considered essential to success in that it should bring “together Governments, civil society, the private sector, the UN system and other actors … mobilizing all available resources”.³ These partnerships are necessary to share knowledge and assist in practical implementation efforts, and to share the cost for achieving the goals by 2030, which is estimated to be between $5 trillion and $7 trillion according to the UN Conference on Trade and Development (UNCTAD).⁴

Currently there is an investment gap in developing countries of about $2.5 trillion. While a large percentage of that gap can be made up from sources within those countries, the remainder will have to come from private investors or from Overseas Direct Aid, which at present annual levels is at a tenth of what is required. UNCTAD has proposed that the gap can be closed by the partnership between the home countries of private investors, state-owned firms, and sovereign wealth funds, and host countries, transnational corporations, and multilateral development banks.⁵

In our research for this book, we have discovered that investors of all stripes—social impact investors, insurance fund managers, infrastructure funds, and more—are having real conversations about the opportunities found in investing in the SDGs and are actively and ambitiously creating targeted funds to do so. How quickly they may fill the gap we cannot say yet, but they see doing so as not only helping themselves to avoid business risks caused by failures to achieve the goals, but also as a chance to develop new profitable business opportunities based on them.

We have seen that such managers of capital have the interest and will to invest, and that at the same there are projects that want to be in investors’ pipelines, though it appears that there is some disconnect between the two sides that needs to be bridged. This is a matter of communication, expectations, and acceptance of risks, which will ultimately need to be explored, understood, and addressed to close that funding gap.

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While countries may be failing to move forward fast enough in their policies and actions, there are now businesses that, like such investors, are ahead in their efforts to align their strategies and operations with the opportunities and business cases for the SDGs. That is what this book is about, and we will show you how industry leaders, backed by enlightened capital, are making sustainability a priority and driving the implementation and success of the SDGs.

And to be honest, this is not necessarily a new trend—there has been an acceptance of sustainability as being a powerful tool for businesses to improve their operations dating back to at least the 1990s. It is just now, with the launch of the SDGs, that the importance and uses of sustainability thinking have become easier to recognize and discuss in the public sphere.

So, let’s see how we got here.

The path to the Sustainable Development Goals

The rise of international consensus, environmental consciousness, social development, and business-for-good

The origins of the SDGs at the UN can be directly traced back to the UN Conference on the Human Environment held in Stockholm in 1972. While the conference was originally designed to focus on humans and the natural environment, the conversation among national delegations quickly delved into issues of human rights and the relationships between developing and developed nations. This tension between human concerns and environmental concerns has been at the core of all subsequent conversations on the subject of development, including the 2019 round of the UN’s Paris Agreement negotiations held in Santiago, Chile.

At the conclusion of the 1972 Conference on the Human Environment, the convened parties produced a final document that outlined 26 principles and 109 recommendations for action specifically on environmental issues, and supported, as well, fair international and domestic policy developments. In its essence, this endeavor already encapsulated the main themes that would be woven together into today’s vision for the SDGs: progress, inclusion, fairness, and prosperity in addressing environmental, social, economic, and developmental subjects.

The full back story of the SDGs, though, is one of multiple threads of twentieth-century social, economic, environmental, and business developments coming together at an international level to create powerful new ways of understanding and taking action in our world. A combination of philosophical and political ideals, market initiatives, environmental movements, new economic and social thinking, humanistic moral imperatives, and historical reassessments of empires and colonies fed into an evolution of the mission at the UN.

Broadly speaking, you could say this evolution represented a global movement at the UN away from international peacekeeping as a first priority, to a shared vision of progress for all—a recognition that peace is only possible when society is fair for everyone and communities manage their natural resources as stewards to prevent environmental degradation.

At the same time, the global consensus represented by the launch of the SDGs is intertwined with the evolution of corporate philosophy and practices, in particular with a specific understanding of the responsibilities of business that goes back to the mid-twentieth century. In reaction to rapid industrialization, businesses began to reestablish social and environmental principles in their internal operations that earlier were sometimes put aside as the mechanisms of capitalism accelerated throughout the century.

Starting from an idea in the mid-nineteenth century of the social responsibility of businesses—way before the concept of Corporate Social Responsibility (CSR) as we know it today—a public discussion arose during the expansion of the industrial revolution that included a focus on environmental and community issues. These ideas coalesced in the later 1990s into a well-defined set of criteria that companies needed to understand, repo...