BUS604: Innovation and Sustainability

Alongside SDG-specific mapping techniques is the adaptation of more established methods that are used to integrate sustainability considerations into the objectives and operations of organizational value chains. Pre-existing sustainability tools/frameworks are being re-purposed for SDG action. For organizational SDG mapping, the techniques of this nature are primarily being drawn from the private sector, an example being the 'Mapping to the Sustainable Development Goals' (MSDG) framework. This framework aims to re-purpose existing sustainability frameworks - primarily green and social bond guidelines - to understand how the SDGs relate to an organization's financial activities. More specifically, sustainability bonds use 'project categories' to define the type of project that is eligible to be funded by the bond. These categories are formally measured by using indicators to determine whether the outcome of the project being funded aligns with the intention of the bond. An example may be the amount of renewable energy that is produced by a project funded by a 'green bond'. Using the MSDG framework, these indicators are then mapped against the SDGs, to identify the total SDG impact generated from the financial activity. Whilst frameworks of this nature vary in theoretical approach, the unifying objective is to understand the impact of organizational decisions and investments on social and environmental issues. This impact is then linked to the SDGs, to produce a representation of the effect that organizational programs have on individual goals.

The MSDG framework is a SDG mapping tool which has been re-purposed from the finance sector. Created by the 'International Capital Market Association', the MSDG maps the goals across the pre-existing 'Green Bond Principles' (GBP) and 'Social Bond Principles' (SBP). These principles offer guidelines for projects and programs that promote sustainable outcomes for the former, and positive social impacts for the latter. As has been previously discussed, the sustainable development principles that underpin the SDGs were not conceived in a vacuum, with concerns over worsening sustainability and equality existing for some entities. The GBP and SBP were both precursor frameworks that were used for organizations to engage with some of the topics in the broader sustainable development field. As the SDGs are an amalgamation of a variety of societal concerns, the MSDG also addresses sustainability concerns as a whole, by building upon the mapping tools/frameworks that are already available. In this manner, the MSDG framework - and other adapted mapping frameworks like it - allow organizations to understand how already-established sustainability-focussed actions are related and can be capitalized upon, in relation to the SDGs.

The specific integration of the SDGs into organizational reporting is the most common type of tool/framework that is currently available (see the table in the Supplementary Materials). The proliferation of this format is likely a result of a number of factors, including the prevalence of organizational sustainability reporting in organizations. Of the 17 SDGs, there are a further 169 specific targets which are measured by more detailed indicators. The availability of such new and globally endorsed evaluation metrics prompts reporting as a method to engage with the goals, as part of business-as-usual sustainability reporting activities.

A compounding factor for the availability of SDG reporting is the diversity of sectors from which the tools/frameworks originated (see the Supplementary Materials). Alongside the typical NGO- and UN-related groups, tertiary education institutions, and consultancies are also providing a large number of SDG reporting services. The occurrence of university-based reporting is seemingly occurring due to the extensive research guidelines/indicators that are already implemented, providing an easy option for integrating them with SDG reporting. Consultancy-based tools/frameworks are also occurring due to reporting synergies, as these firms typically provide reporting as a core service to organizations. The inherent characteristics of these sectors allowed for organizational SDG reporting tools/frameworks to be conceptualized at a rapid rate within the first three years of the goal's existence.

An example of this is the 'How to report on the SDGs' framework produced by KPMG. It should be noted that KPMG's SDG and broader sustainability reporting services are diverse, with the full range and extent likely to be a purchasable service and therefore non-public, proprietary material. However, the material that is publicly available advocates for a three-stage reporting process: 'understanding the SDGs', 'prioritizing relevant goals' and 'setting/reporting on targets for prioritized goals'. This three-stage process is wholly focussed upon introducing the SDGs into the existing organization's reporting procedure, rather than changing the procedure itself. By passing through these three stages, the way in which the organization reports on performance should be linked in some way with the SDG indicators. Throughout this process, it is emphasized that direct measurement of SDG progress is required against the 169 individual SDG targets However, the ultimate method, format, and goals are left to the organization to select. This results in a framework which provides some support in navigating the structure of the SDGs without engaging with the granular details of each goal, or relating these goals to the operation or ethos of the organization. Significantly, consultancy-based SDG reporting - including an early iteration of the KPMG framework discussed previously - were offered to organizations soon after the launch of the SDG agenda. This swiftness was likely a result of the capacity for sustainability reporting within the pre-existing consultancy services. These features of the KPMG framework - and other similar SDG reporting frameworks - provide an initial opportunity for organizations to engage with the goals, but lack a formal process that can be followed and replicated.

Occurring alongside the production of new SDG reporting methods is the proliferation of more traditional sustainability reporting methods which have been adapted for SDG purposes. The SDGs inception did not occur in a vacuum, with the consistent adoption of 'sustainable development' principles and theories - both in academia and industry - gaining momentum over the past 20 years. Due to this existing body of knowledge, tools/frameworks for organizational reporting, which integrate social and environmental factors alongside traditional performance indicators, are well-established. The two archetypal - but not exclusive - examples of this are 'Integrated Reporting' and the 'Global Reporting Initiative'. These frameworks generally reflect an organization's value creation process in relation to the external environment, with particular emphasis being placed on the societal impact of the organization. Both of these tools provide reporting standards that organizations can use to objectively measure sustainability performance. As there is a pre-existing synergy, the core structure of these tools/frameworks has been re-focused, using the SDG indicators to provide a familiar method for organizations to measure performance against the goals.

The 'Global Reporting Initiative' (GRI) is an interesting example of this type of 'adapted organizational reporting'. The GRI is a regularly used set of standards for economic, environmental, and social organizational reporting. Launched in 2000, the standards provide a template for 'sustainability reports' or 'corporate responsibility reports', so that the reporting methodology remains consistent. As with other tools/frameworks of this nature, the GRI benefits from the existing foundation that was present before the SDG's introduction. This pre-existing foundation results in a well-rounded framework which was quickly available, due to the possibility of adapting pre-existing material, rather than creating completely new tools/frameworks. As GRI is a reporting-based framework that covers most possible organizational activities, it provides a framework that, at least somewhat, contends with the broad scope of the SDGs. Evidently, the GRI and similar frameworks only allow for a single form of action, but its broad scope - borne from the pre-existence of the framework - allows for reporting that contends with the large scale of the SDGs.

The previously discussed areas characterise a reasonably simple approach to organizational SDG action. However, alternative, more holistic techniques have started to emerge. These usually center upon redefining the organizational practice itself, to act as a vehicle for SDG action. Due to the complexity of this objective, the current tools/frameworks are evolving from academic fields already aligned with organizational operation. An example of this is the use of sustainable business practice as a form of competitive advantage, which in recent years has tried to integrate the SDGs as guiding principles to achieve this advantage. Competitive advantage can be generated from a variety of sources for a business. A common theory in business scholarship is that environmental and social responsibility can be an advantage because of improved public perception, subsequent supply chain innovations, or the forced shift in internal mind-set, among many other factors. The SDGs can be used as a specific reference point with which to pursue such a competitive advantage. This significantly differentiates alignment tools from those previously discussed tools, as alignment tools seek to re-define the organization as an entity to achieve the goals, rather than simply measuring end-state performance.

Another example, and a closely related approach, is the application of industrial ecology principles to create sustainable industrial systems. Of particular interest, this approach seeks to combine responsible business practice with the industrial model that guides said practice. Effectively, it is exploring the way in which the SDGs can be integrated into industrial processes. Whilst still in its infancy, this approach uses the SM process to progressively change an organization's industrial activities to be explicitly in alignment with the SDGs and their indicators. This application is the most 'strategic' of SDG tools/frameworks, as it seeks to modify the organizational practice itself, rather than only measuring or mapping the operation with the SDGs.

The application of 'sustainable business models' to the SDGs is a particularly prominent method for adapting pre-existing sustainability alignment tools/frameworks. A specific example of this in the academic literature - although there are similar tools/frameworks from the private sector - is the 'Sustainable Value Exchange Matrix' (SVEM) proposed by Morioka et al. in 2017. This framework seeks to provide a visual tool for organizations to identify how their supply chain/logistics, value proposition, and value capture relate to both a competitive advantage and the SDGs. The user works through a number of SDG and sustainability-related questions or propositions. These questions are represented in the tool as 'sustainability challenges', 'value creation & delivery system', 'sustainable value capture', and 'sustainability inspirations'. By progressively working through these topics, the organization can use the SDGs to improve the performance and sustainability of regular operation. The breadth of this framework is largely a result of the utilization of existing research, and the organizational elements drawn from the substantial sustainable business literature. The SVEM - and other adapted tools/frameworks that encourage business alignment - offer a substantive resource for organizations, because they act as an extension of previous approaches, using the SDGs to provide a target without attempting to completely re-define an already established field.