Can business step up on SDGs post COVID-19?

Our COVID-19 coverage is free. Please consider a Devex Pro subscription to support our journalism.
How can the private sector contribute to both COVID-19 recovery and the SDGs? Photo by: Elma Okic / UN Global Compact

WASHINGTON — Companies are still falling short when it comes to embedding the Sustainable Development Goals in their business but there is an opportunity to accelerate action in the wake of COVID-19, according to new data and leaders at the United Nations Global Compact Leaders Summit this week.

Over 20,000 business and sustainability leaders from more than 180 countries participated this week in the 26-hour virtual summit that marked the initiative’s 20th anniversary and a leadership transition — Lise Kingo, who has served as UN Global Compact’s CEO for five years, is leaving the post this week and Sanda Ojiambo will be starting in the position.

The summit was a moment to take stock of both the initiative and business involvement in the SDGs, and a new report sheds light on both.

“I challenge all of you to take more ambitious and comprehensive action across your operations and value chains.”

— Anttónio Guterres, secretary-general, U.N.

While 84% of the business leaders surveyed by UNGC and its partner DNV-GL said they are taking action on the SDGs, only 61% are developing products and/or services that contribute to the SDGs, with 46% are embedding them into their business.

Companies also need to be more ambitious, the report found, with only 15% of the companies surveyed having set a greenhouse gas reduction target approved by the Science Based Targets initiative.

“Where once ‘do no harm’ was a common approach for the business community, today we are arriving at a new landscape of elevated expectations and responsibilities,” U.N. Secretary-General Anttónio Guterres said at the summit.

Impact investing and COVID-19: A moment for growth or a flight from risk?

Impact investors report that, despite coronavirus-related shocks, they are still in business and seeking to collaborate to improve speed and efficiency. Here is a look at the industry's response so far and how it could change.

“Now more than ever, as big decisions are made about our future, companies need to address environmental, social and governance risks holistically and move beyond business-as-usual,” he added. “I challenge all of you to take more ambitious and comprehensive action across your operations and value chains.”

Guterres echoed remarks he made in January when he launched the SDG Ambition initiative, led by UN Global Compact, at Davos. The SDG Ambition initiative aims to give businesses benchmarks, recommendations, and guidance so they can set more ambitious goals and improve the integration of the SDGs into their core business.

This week the compact released the first set of benchmarks that all businesses should follow as part of the initiative. They include: 100% of employees across companies should earn a living wage, gender balance in all levels of management, science-based greenhouse gas emissions reductions that align with the Paris Climate Agreement’s 1.5 degree Celsius target, and zero incidences of bribery.

In this time of great change, companies must embed these objectives in the changes they make, said Julie Sweet, CEO of Accenture, which is a partner in the initiative. CEOs are talking about speed — companies had to react quickly in the crisis and many of them don’t want to go back to a slower pace, which could create an opportunity, she said.

“But what hasn’t changed is that to achieve objectives you have to have a goal, you have to have an execution plan, the ability to measure progress and accountability,” Sweet said.

Through the SDG Ambition initiative, UN Global Compact and its partners will try to help at least 1,000 companies do that — both by laying out the targets they should aim for and by providing them with the management tools to implement them and measure progress.

While some businesses may think there are tradeoffs between working on environmental, social, and governance issues and succeeding financially, Natura & Co CEO Roberto Marques said that they’re “not that hard.”

But to him, it’s not really a question, “We can’t run a business on a dead planet,” he said.

Marques may be bought in, but there are others who are not, and part of that lack of sustainability leadership might have to do with how top-level executives and board members are hired.

In an examination of 4,000 specifications for C-suite leaders and board roles, only 15% of them refer to sustainability, according to a new study from UN Global Compact and Russell Reynolds Associates on the characteristics of sustainable business leaders. Sustainability experience or a sustainability mindset was a requirement in only 4% of those cases, the study found.

“To make progress we need sustainability leadership in business … change starts at the top,” Clarke Murphy, CEO of Russell Reynolds Associates, said at the summit.

One question asked at the summit, and more widely, is how COVID-19 would affect efforts to get companies and investors to focus more on the SDGs and integrate them into their business.

While companies that have strong ESG scores fared better through the pandemic and economic crisis, that hasn’t necessarily translated to a rush to ESG investing or for businesses to improve their performance on those factors, Evan Harvey, global head of sustainability at Nasdaq, said at the summit.

The gap between the believers in ESG and the nonbelievers has widened, he said.

“Those who bought in are doubling down,” Harvey said, adding that those who aren’t have pushed it to the bottom of their priority list.

What is changing though, among responsible investors and service providers is that there is a shift in focus to more of the social factors in the ESG investing space, several investors and finance professionals said at the event.

While in the past the environmental factors were most prominent, the conversation has evolved in the past few months to put social factors on the map, raising questions about how to quantify those metrics and creating a moment where the industry can refocus on data collection.

“The right time to incorporate ESG into investment strategy was probably yesterday,” said Anna Zubets-Anderson, vice president at Moody’s Risk Assessments.

An event about the private sector’s role in development wouldn’t be complete without a discussion of partnerships, and UN Global Compact assembled a panel of U.N. agency heads to discuss COVID-19 and the role of companies in the response and recovery.

UNICEF’s Henrietta Fore, UNAIDS’ Winnie Byanyima, U.N. Development Programme’s Achim Steiner, and World Food Programme’s David Beasley all spoke about how they’re now partnering with private companies in the response, and put out a call for more collaboration.

Byanyima called for companies, particularly in the pharmaceutical space, to commit to making future COVID-19 therapeutics and vaccines accessible to all. Beasley spoke about work with several companies to try to keep food supply chains moving and a partnership with Ethiopian Airlines on logistics, and Fore asked for partnerships around supplies, diagnostics, and artificial intelligence to track diseases.

“We can use all the help we can get,” Fore said.

It’s important that the U.N. makes it easier for the private sector or those with private finance to engage so that opportunities aren’t missed, Steiner said.

UNICEF has been able to speed up its timeline in response to COVID-19 and the agency now has a 20-day turnaround for partnerships, Fore said, adding that the agency can look at how to learn from this crisis and improve the pace at which it can collaborate.

About the author

  • Adva Saldinger

    Adva Saldinger is a Senior Reporter at Devex, where she covers the intersection of business and international development, as well as U.S. foreign aid policy. From partnerships to trade and social entrepreneurship to impact investing, Adva explores the role the private sector and private capital play in development. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.

Join the Discussion