Private sector on a 'journey' to engagement with the SDGs

NEW YORK — The private sector’s role in achieving the Sustainable Development Goals has been firmly embedded in the rhetoric around the goals, but companies have embraced them — or not — to varying degrees.

During the high-level meetings of the United Nations General Assembly and the surrounding events, there was private sector participation and several announcements, from a set of Principles for Responsible Banking to climate commitments. But many of the businesses that were front and center were familiar names, leading some to question whether business commitment to the global goals is actually increasing.

“It is a huge problem in terms of narrative because there is fatigue in seeing the same companies because it creates a sense this isn’t a movement that is expanding,” said Andrew Wilson, the International Chamber of Commerce’s permanent observer to the U.N.  

U.N. Global Compact released the findings of a CEO survey that found that 71% of those surveyed believe that with increased commitment and action business can play a crucial role in the SDGs, though only 21% said they believe it is happening today.  

“That’s the challenge and that’s where we are today. We have very good awareness, a very good start but definitely need [to] speed up now and begin to see tipping points particularly in climate and social inequalities,” said Lise Kingo, the CEO and executive director of U.N. Global Compact.

Wilson said he was disappointed to see a continued pattern of aspirational comments, nice soundbites at the U.N., celebrations of individual projects but a lack of discussion about how to create systemic change.

Companies familiar with the SDGs largely fall into three categories, according to Wilson: a small number who have integrated the SDGs into their core business or purpose of their enterprise, a larger group that has an initiative, project or partnership tied to the goals and a third group that talks about corporate sustainability but their actions don’t match their words.

“The SDGs are bold aspirational objectives in response to which many made aspirational statements to corporate voluntary commitments. It doesn’t add up to what we need if we really do want change,” Wilson said.

Many business and development observers watched with interest as the Business Roundtable released a statement in August expanding a corporation’s mission from serving shareholders to serving all of its stakeholders, including communities, but the test will be in how that action is operationalized.

“I recognize there needs to be a transition, but what’s the pace? How can we accelerate the pace?” Wilson said.

For some a journey, for others an identity

Several companies described engagement on the SDGs as a journey, different companies have made it further down the path than others.

“It’s a journey, you take one step forward and two steps back,” Christine Daugherty, PepsiCo’s vice president of global sustainable agriculture and responsible sourcing, told Devex. Every company has its own time horizon, she added.

There is growing recognition from development partners about the importance of business supply chains, and how linking into those mechanisms can help lift communities, Daugherty said.

“If you don’t have a way for the community to be economically viable, for people to make a living, it will be a short term fix and it won’t stick,” she said.

PepsiCo is working with farmers to improve their practices and become more sustainable, an effort that also helps improve productivity yields and makes the operation more resilient, which in turn is good for the company, Daugherty said. And while PepsiCo is working to improve the nutrition of some of its products, it doesn’t expect to discontinue popular snacks due to health concerns or a potential lack of alignment with health-related SDGs.

The approach is a bit different at Novozymes, a biotech firm, which has developed a tool that uses the SDGs as a framework that it uses to make business decisions, particularly what will be in its innovation pipeline.

“It has become who we are and what we do as a company,” said Claus Stig Pedersen, head of corporate sustainability at Novozymes, adding that the company now has SDG governance boards.

As companies go down the road of aligning with the SDGs they need to integrate them into their core business identity and anchor them at a high level, he said. While today the market doesn’t pay extra for sustainable products it may eventually. But movement is too slow, in part, because everyone from policymakers to regulators are just watching others, he said.

“They need help from business to de-risk the political process,” Pedersen said. “Corporations should start seeing themselves as activists.”

While big, legacy companies may have a harder or slower path to change, there is a crop of African entrepreneurs building businesses that align with the SDGs from the start, said Amy Jadesimi, the CEO of Lagos Deep Offshore Logistics Base.

“African entrepreneurs and business people are pushing forward business models and are determined to build enterprises however they can. They are not waiting to be told how,” she said.

While there are challenges for these businesses and significant funding gaps, there is a growing body of work that shows sustainability is linked to profitability.

In countries where there is high income and low growth, there is less capital to invest in new ideas and companies take longer to change, but the same is not true in high growth, low-income countries, Jadesimi said.

“In Africa, if there are no solutions today, we will not be here tomorrow,” she said. “The urgency is there, wherein the West there is much less urgency.”