The tail end of 2020 marked an array of significant milestones for the United Nations. Just last month the U.N. observed five years since taking historic action in negotiating the Paris climate accord. That anniversary came on the heels of a series of other milestones for the world’s most powerful intergovernmental organization: 75 years since its founding and 10 years until its self-imposed deadline for its Sustainable Development Goals, 17 societal and environmental challenges the global body has set for the world.
Such milestones suggest there’s a great deal for the U.N. to be proud of — historic achievements and mobilization on a global scale to address the world’s ongoing challenges. Yet for all the progress the U.N. has made, it has a glaring blind spot: it has failed to effectively engage with the world’s businesses. Without taking necessary steps to change this, it is doubtful the U.N. will be able to achieve the noble and necessary goals embodied in the Paris accord and SDGs.
The world is very different today than when the U.N. was founded in 1945, particularly regarding the influence of large corporations. It has been argued that corporations rule the world now, not countries. After two world wars and the Great Depression, 1945 was a low point in terms of business’s global influence.
Yet today, thousands of huge multinational corporations span scores of countries; the revenue of some dwarfs many major nations’ gross domestic product. Coca Cola and Western Union, for example, operate in over 200 countries, more than the U.N.’s 193 member nations. And in 2017, Walmart had greater revenue than Belgium, placing it among the world’s 10 largest economies.
The corporate sustainability landscape has changed a lot since the UN Global Compact was launched 20 years ago. Can the organization adapt to stay relevant today?
The U.N. has been slow to adapt to this new world; its plans for implementing its goals focus on the roles of global organizations; national, regional, and city governments, and bottom-up “people action.” Multinational corporations are just not in the U.N.’s plan.
This is not a new problem, as earlier U.N. missteps in engaging business also revealed this blind spot. The United Nations Global Compact, for example, was founded in 2000 to help companies align their strategic decisions and business operations with 10 universal principles in the areas of human rights, labor, the environment, and anti-corruption. This initiative had good intentions, but very poor execution and, as a result, tarnished the U.N.’s image. Any company could sign up to this voluntary accord, but particularly early on, there was weak oversight and accountability.
UNGC has become more rigorous over time, but the program still is often labeled as “blue washing” whereby companies sign-up to bask in the U.N.’s light blue glow, but are not required to follow through on their voluntary commitments.
Many business leaders have told me that while the SDGs have gained significant global traction, they are not operational for business.—
There are a number of ways the U.N. can improve its business engagement to achieve the goals in the Paris Agreement and the SDGs. Such work is all the more important given recent reports that the world is on track for a 3 degree Celsius increase.
First is formalization of a comprehensive corporate NetZero program. The Paris agreement focuses on the world achieving net-zero carbon emissions by 2050, and there must be proactive and formal systems put in place for business leadership to commit to the same goal or even better. The U.N.’s 21st climate conference in Paris was the first U.N. climate conference that invited business to the table as a nonstate party, and since then, corporations have promoted voluntary commitments schemes such as the Climate Pledge, the SME Climate Hub, and B Corp Climate Collective Net Zero 2030. All provide tools to help companies meet climate goals.
But given the global power of business today, a more formalized and coordinated program aimed at all companies in the world — especially multinationals — should be developed. This would put pressures on all companies to publicly commit to different NetZero goals such as 2030, 2040, and 2050. The collective effort would also enhance learning across companies on limiting greenhouse gasses, create peer pressure to do better, and importantly such a program would enable scrutiny of companies’ progress.
More generally, bringing business to the table means better aligning the SDGs with business operations. Many business leaders have told me that while the SDGs have gained significant global traction, they are not operational for business, making it a challenge for companies to productively work toward them. There needs to be more detailed information and metrics for business to understand how to help achieve them.
Learning from the UNGC experience, the U.N. must also develop systems to better facilitate corporate accountability to the SDGs. A recent positive in this direction is a new tool called the SDG Action Manager introduced in early 2020 by the UNGC and B Lab, an American nonprofit that certifies companies’ social and environmental performance. This tool helps companies to see how their operations line up with the U.N. goals, measure progress against them, and report to interested constituencies and it also helps companies work toward NetZero goals.
In addition to the NetZero initiatives mentioned above, many companies, both large and small have individually begun taking up these challenges. For instance, global dairy giant Danone’s corporate mission is to bring health through food to as many people as possible, so in addition to committing to NetZero by 2050, it is working toward achieving SDG 2 on zero hunger, SDG 3 on good health and well-being, and SDG 6, clean water and sanitation, identifying specific targets and deliverables for each one.
At the other end of the size spectrum, digital marketing agency Mightybytes has committed to Net Zero by 2030 and is following the SDGs, working on SDG 1, no poverty; SDG 2, zero hunger; and SDG 8, decent work and economic growth, by paying a living wage and offering optimal employee benefits. Many more companies would be able to act similar to these pioneers if there were more systematic programs in place.
With widespread COVID-19 vaccination on the horizon, the mantra of “building back better” takes on more urgency; no longer just a rallying cry, business must step up and deliver on creating a more sustainable and equitable economic system. Will the U.N. seize this moment to modernize itself and recognize the reality of the world today? We’ll know in 10 years, when assessments of SDG progress are in; to meet these ambitious and important goals, it had better start acting quickly and globally.