BUS604: Innovation and Sustainability

In an increasingly interdependent world, the SDGs provide decision makers - national, corporate, and community - with a framework to think strategically across a range of variables over a fifteen year period.

Benchmark

The SDGs provide a common framework which governments and organizations can use to set a common direction, benefitting from opportunities in tackling the challenges faced and overcoming risks. As a first step, benchmarking existing policies and strategy against the 2030 Goals provides a baseline from which to build.

Governments have already started to benchmark their current planning priorities against the SDGs to identify gaps and alignments with their national short and long term strategies. For example, Bangladesh's benchmarking has shown that over 80% of the SDGs are covered by their national plan; while Colombia's assessment has revealed that of 169 targets, 91 are already closely aligned with their National Development Plan but there are some important gaps to consider.

Investors and businesses are also mapping their business models and strategic vision against the SDGs to inform their strategy and notions of 'value'. As early as 2014 Novozymes used the draft SDGs as inspiration when developing its new long-term strategy and purpose. The company benchmarks the SDGs against their innovation pipeline to determine which new solutions have the most promise to bring positive impact to the world.

Example Columbia Leads The Way

Even before the SDGs had been finalized, Colombia's President Juan Manuel Santos approved a Decree to establish an Inter-Agency Commission of representatives from across government to integrate the SDGs in national policy decisions. The Commission started by benchmarking the National Development Plan against the SDGs. Out of 169 targets 91 were closely aligned with their National Development Plan, but there were also gaps including targets in SDG10 on inequality, and specific targets on tropical diseases and the genetic modification of seeds.

Back-cast From The Future

Benchmarking is not enough if it is simply a mapping exercise against the SDGs, without undertaking a more fundamental review of policies and strategies to consider whether they are sufficient to meet the SDGs. The SDG framework calls for vision beyond corporate timeframes and political horizons. Starting from the future, it offers stakeholders a structure to cast backwards to see if their business models and national plans - and hence measures of progress - are fit for purpose.

At the national level, efforts to go 'beyond GDP' are well underway. Statistics Netherlands; the UK National Wellbeing Commission; the Canadian Index of Wellbeing; the OECD's Better Life Index are all helping policy makers understand what progress means to citizens. The agreement of the SDGs should do more than just galvanizing these national efforts to 'go beyond GDP', also helping to guide further emerging frameworks at a global level.

Example

The Netherlands Takes A Strategic Approach

Since 2007 the Dutch government has prioritized measuring societal development beyond GDP. The Sustainability Monitor is produced by Statistics Netherlands in cooperation with the Netherlands Bureau for Economic Policy Analysis, the Netherlands Environmental Assessment Agency, and the Netherlands Institute for Social Research. The set of indicators consist of three dashboards that encompass sustainable development now and into the future; 1. Quality of life (here and now); 2. Resources (later); 3. Netherlands in the world (elsewhere).

Lead Change

Setting a new direction requires leaders with the convening power and networks to drive institutional collaboration.

Slovenia has established a new Ministerial post for sustainable development. Ghana has established a high-level inter-ministerial commission that brings together sectoral working groups across ministries. Mexico, Bangladesh and Colombia have aligned SDG efforts with the President's Office to ensure the highest level of commitment.

The US has established an inter-agency organizational structure that includes foreign and domestic agencies.

High level leadership is equally relevant at the corporate level - only then can environmental, social and governance goals be incorporated into the core values, purpose, and the envisioned future. Financial services and industry associations can play a critical role in helping their clients and members align their strategies and reporting systems to the SDGs.

Example Investors Drive Change

The UN Principles for Responsible Business wrote to the chairmen of FTSE100 companies after the SDGs were agreed asking them to consider the relevance of the Goals for their strategy and performance, providing a signal to companies that investors would be starting to assess performance in the context of the SDGs.

Example New Tools To Help Investors Measure Alignment With The SDGs.

MSCI ESG Research is introducing tools and data designed to help institutional investors measure their alignment with the SDGs. MSCI ESG Research grouped the 17 SDGs into five actionable themes: basic needs, empowerment, climate change, natural capital and governance. The MSCI ACWI Sustainable Impact Index aims to identify companies that derive at least 50% of their revenues from products and services that address environmental and social challenges as defined by the themes outlined above. The index, which excludes companies that fail to meet minimum environmental, social, and governance (ESG) standards, weights securities by the percentage of revenue derived from products or services that address the themes.

Why Alignment Matters: The Challenges Of Water Management In India 

Water is in high demand in India. Half of India's rivers are polluted and poor quality water is costing the government US$600 million a year. MWM research has associated the current difficulties of effective water use management in India with inconsistencies within and between corporate and government frameworks used to report and monitor water sustainability.

Access to water and sanitation is moderately reported at government level, but there is less evidence of standardized corporate disclosure for two reasons:

1) Government accounting systems do not report levels of corporate compliance with water-related laws and legislation, creating an enabling environment for non-reporting of activities, over-exploitation of water resources and possible conflict between user groups.

2) Several of India's water-intensive sectors (agriculture, construction, retail, and hotels) reside in the informal economy so do not readily report their activities and impacts.

However, there are clear opportunities for data sharing between business and government to fill gaps in monitoring and reporting water sustainability. Indeed, India's government has already begun to explore such opportunities by mapping the SDGs and targets against business sector initiatives and government departments. The exercise hopes to improve national ownership of the SDG agenda, which is crucial as India's national development approach over the next 15 years will be decisive in determining the success or failure of the SDGs agenda globally. As President Narendra Modi notes:

"Sustainable development of one-sixth of humanity will be of great consequence to the world"

Figure 3: Levels of coverage of water sustainability dimensions within corporate and government reporting frameworks and within the water-related SDGs.