The UN SDGs and the triple-bottom line
The SDGs contain 17 goals, 169 targets, and 232 indicators
Key to corporate integration of the SDGs lies in the ability to prioritize and understand ESG risks
material SDGs measure your ability, awareness, and commitment to manage your potential positive and negative contribution
benefits can be top-line growth, cost reduction
Following this methodology can deliver meaningful triple bottom line results
While some pundits have suggested the United Nations Sustainable Development Goals (SDGs) are but a utopian dream of the U.N., the World Economic Forum amongst others consider them to be humanity’s best bet and guide to navigate through this complex 21st century. However, with 17 goals, 169 targets, and 232 indicators, how should companies choose relevant SDGs in order to participate in accelerating the transition towards sustainability while not losing focus on operational and financial sustainability.
It is quickly evident that the SDGs present lofty goals and were predominantly formed for action by governments to address the broad societal problems. Companies are increasingly acknowledging their role in sustainable development and the value of moving towards sustainability but are sometimes struggling with integrating and even choosing the SDGs.
Materiality, risks, and business opportunities
The key to corporate integration of the SDGs lies in the ability to prioritize and understand ESG (environmental, social, and governance) risks that are most material to a company’s operations, value-chain, and major stakeholders, i.e. are sector-specific. With this understanding your company can choose SDGs relevant to material ESG risks. The material SDGs are then a measure of your ability, awareness, and commitment to manage your potential positive and negative contribution of your business model to the SDGs.
By having in place a holistic, robust, and sector-specific ESG strategy, measurable targets and action plan, and material SDGs, companies can benefit. Those benefits can be top-line growth, cost reduction, improved communication and relief from regulators, employee productivity uplift as well as attracting and retaining talent, in addition to investment benefits. Meaning, companies do well by doing good.
Companies can and should identify and prioritize the SDGs most relevant to their operations. By being selective and going deep into the relevant targets and indicators of the prioritized SDGs, companies can focus on delivering measurable impact. Following this methodology, companies can avoid green and rainbow washing and deliver meaningful triple bottom line results - on the people, planet, and profit.
Published 30 October 2020 in Fréttabladid.
CIRCULAR Solutions is a leading independent Nordic sustainability & ESG consulting and services firm. We provide a unique approach to sustainability based on robust, in-depth, risk management, and scientific best practices across sectors and industries. We help develop strategies, sustainable services and products, impact reporting, and sustainable financial instruments.