As the third and final piece in this series on sustainability reporting, Adam confesses to being a bit of a reporting geek. He appreciates a well-structured report that gives us a sense that the company really ‘means it’ when it comes to doing good, or at least doing less harm.
The best reports transparently show what the company is focusing on and why, how they are improving their positive impact on people and planet, and at the same time acknowledging their limitations. They are proof that we are transitioning from shareholder to stakeholder capitalism because they acknowledge the need for accountability and transparency to earn trust from stakeholders. Done well—with useful data, compelling stories and engaging design—reports are more than records of past performance.
BlackRock is the world’s largest institutional investor with $5.7 trillion USD in assets under management. In January, BlackRock CEO Larry Fink called on companies to have a purpose linked to people’s quality of life and said BlackRock would divest from companies that did not have a social purpose—a sign that the world’s investors are coming around to share our enthusiasm for purpose-driven capital.
Great reports are public declarations that companies and communities are interdependent and that we all have a role to play in putting the world on a more sustainable footing. Companies keen to explore and engage this agenda should look at the UN Sustainable Development Goals (SDGs).
Understand your context by taking a look at the SDGs. They are the global community’s considered response to the state of the world: they’re an excellent place to start establishing the sustainability context for your business.
As I said in the first article in this series, they help a company understand its sustainability context. A great report will first establish that context before going on to articulate the company’s purpose and role it plays in addressing the needs that are most relevant to their operations. For example, a packaged goods company should certainly be aware of the contents of SDG 12, “Responsible Production and Consumption”; food and agriculture businesses should be aware of SDG 15, “life on land”; and all companies should understand the SDGs on Gender Equality, Decent Work and Economic Growth, and Sustainable Cities and Communities.
Sustainable Development Goals are your guide to stakeholder concerns
The Sustainable Development Goals apply to all countries, not just developing ones, and were written for all actors, including business, not just governments and civil society, or companies outside Europe and North America.
The SDGs (or “Global Goals” as they are also known) can be—indeed, are already becoming—the business sector’s north star. The 169 targets under the 17 goals make the whole framework very tangible. For example, “By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions.” The sheer clarity of that statement, just one of the 169 targets, makes it both aspirational and actionable.
Finalised and agreed by the United Nations, the goals and targets focus on specific social and sustainability outcomes, as well as overarching global concerns including poverty alleviation, democratic governance and climate change.
How you can use the SDGs in your reporting?
The goals have been visualised in a set of colourful identities so they can be easily and consistently shared and communicated, building their own brand, thus increasing recognition and take-up. You can leverage this recognition in your own reporting.
There are three levels of engaging with the SDGs in your report, which for ease of reference are labelled basic, intermediate and advanced.
Basic – Acknowledgement The most basic way is to use the visual symbols of the relevant SDGs in your report and make a statement of support. Several companies do this and not much more, but that’s at least a start in acknowledging them.
For example, Lego has a two-page spread in its 2016 Responsibility Report declaring how they ‘provide clear guidance for the LEGO Group on the best course of action to create a positive impact for children, the planet and society.’ Then the toymaker goes on to tell us it is focusing on Goal 4: quality education, Goal 12 Responsible consumption and production, Goal 13 Climate change and Goal 17 Partnerships.
Intermediate – Connecting to Targets Companies can also go further than Lego, which says only that ‘their work is in line with’ the SDGs in each section of their report. Link each strategic pillar of your sustainability programme to the SDGs.
Retailer Marks & Spencer does this in their 2017 Plan A report where they address nearly all the SDGs. They make it clear how each strategy outlined is applicable to each of the goals.
Ikea also shows their specific targets regarding each of the 17 SDGs and their measurable progress (48% of managers are women, for example) towards these goals and compare performance with the previous year’s attainment.
Advanced – Embedding in Strategy Beyond linking your targets to the global goals, you can use the SDGs to influence your company’s sustainability programme itself.
The Danish brewer Carlsberg Group goes beyond identifying specific targets within the SDGs in their 2016 report. They correlate four priority areas to key targets of the SDGs that they say will lead to them strengthening their business: 7.3, 6.4, 3.5, 8.8 and more general targets addressed in all overarching operations: 12.5, 17.16, 17.17.
Similarly, the Dutch technology firm Philips has gone further, stating that they are aiming for 95% of their revenue to be linked with the SDGs by 2025. That’s really embedding the global goals into their business—reorienting the company to deliver on the issues that matter to the world. Ultimately this is the response that we need to see from businesses.
From Context to Impact
Good reporting is woven together by a consistent thread:
- Defining the context
- Articulating purpose
- Demonstrating innovation in sustainability planning and programs, and
- Showcasing impact and the difference the company is making.
Context is readily framed and clearly understood through the SDGs. It is the global community’s considered response to the state of the world: it makes an excellent place to start when establishing the sustainability context for your business. More than that, as we have seen with more ambitious adopters of the SDG framework, they can also influence your corporate purpose, how you innovate and the evidence you provide for the impact you are making.
Whatever level feels comfortable, the SDGs can help you produce a more compelling and meaningful sustainability report.
Adam Garfunkel is an owner and Managing Director at Junxion. He’s been involved in corporate sustainability and social responsibility for more than 20 years, writing award-winning reports and supporting the advancement of social responsibility on three continents.