We’re almost halfway through our timeline for the Sustainable Development Goals. Focusing on reporting, supply chains, SMEs and accountability are crucial.
By Holly Secon
February 22, 2022
Heather Clancy (l) interviews United Nations Global Compact CEO and Executive Director Sanda Ojiambo during GreenBiz 22. Photo by Louis Bryant III
In 2015, when the 193 countries in the United Nations pledged to achieve the 17 Sustainable Development Goals by 2030, they committed to a transformational global shift for a healthier, more peaceful, more prosperous planet and population. However, in 2022, we’ve found ourselves in the middle of a different kind of great transformation: The COVID-19 pandemic has taken a devastating toll on human life and livelihoods and threatened global systems that had previously been taken for granted, from food systems to supply chains to public health.
At the same time, the pandemic presents the opportunity to build these systems back in a more resilient and sustainable way. Many innovative solutions to these problems already exist in the private sector, specifically with members of the UN Global Compact, a network this includes more than 15,000 companies committed to sustainable and responsible business practices.
On the mainstage at GreenBiz 22, GreenBiz’s annual conference on the business of sustainability in Scottsdale, Arizona, UN Global Compact CEO and Executive Director Sanda Ojiambo sat down with GreenBiz Editorial Director Heather Clancy to discuss the private sector’s progress on the SDGs at this critical time. The pandemic undoubtedly slowed progress on the SDGs, Ojiambo noted, but it also provides a new way of thinking about them.
“I think what has shifted, and it probably shifted for a lot of business leaders in the room, is the urgency and the need for real ambition and bold leadership,” Ojiambo said. “The pandemic really provided an opportunity for business to step up, for business to partner and for business to innovate.”
So what will it take to achieve them? Ojiambo outlined four main areas for business at large to focus on.
Corporate reporting on sustainability measurements is gaining a foothold around the world. Many companies are creating a veritable alphabet soup of reports, from the Science Based Targets initiative (SBTis) to the Task Force on Climate-related Financial Disclosures (TCFD) to broader environmental, social and governance (ESG) metrics. Reporting on SDG progress is equally important, Ojiambo noted.
Ojiambo called for context and broad frameworks for reporting: “We’ve moved beyond the concept that the success of a company is just grounded in its financial health,” she said.
The SDGs cover far more than material financial issues — they include poverty, water issues, gender equality, human rights and renewable energy.
To begin reporting, Ojiambo said companies have to ask themselves a few questions. “First, what are we reporting for? Because that initial motivation is very important — are you reporting for reporting’s sake or because you firmly believe it’s important to establish a benchmark and work towards continuous improvement and be transparent about your reporting?”
“The second is, what do we do with all of this data when we have it? Do you use it to make better decisions, to drive resourcing or actions in a better way, that lends to your company and ecosystem’s success?” she added.
On that note, the UN Global Compact has its own reporting system, called Communication on Progress. It helps member companies with benchmarking and reporting to make sense of where they are in the industry and their sector. Companies can look to others’ successes and learn from their business behaviors. Ojiambo said that this communication is also crucial for the Global Compact to show that a company can demonstrate measurable progress by being part of our network.
Last year, as a consequence of the pandemic and economic shutdowns, the world experienced a supply chain and labor crisis. Manufacturing and shipments slowed, causing global goods and services shortages and affecting consumers.
“During the years of the pandemic, the supply chain was probably one of the most fragile areas, in terms of [business] not really fully grasping how all the changes globally were going to impact the supply chain,” Ojiambo said. “Closing borders, changes in movement of traffic and goods back and forth, and not really understanding what was going on maybe from a human rights or labor perspective … Sustainability and success rely on the supply chain.”
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She noted that businesses need to think through SDG strategies across their business ecosystem, given the delicate situation. “Really for us, it’s an opportunity for reflection on the supply chain and how to be really building in sustainable business principles that will allow yourselves to be sustainable in the long term,” she said.
Taking a corporate strategy perspective is key. “Your supply chain is not incidental — your externalities are not incidental to how you do your core business,” Ojiambo said. “Businesses need to take their whole ecosystem into consideration: Look at who your stakeholders are, and the impact of business as a whole. So for anything that you would do at your headquarters, my question would be, can you take an analysis of the importance of that work and run it through your supply chain and see what it looks like there? Where do you have gaps? Where do you have improvement opportunities? And how do you leverage your supply chain to truly build resilience in your supply chain for the long term?”
Engaging suppliers and buyers is crucial for businesses to make tangible progress on their SDG goals and to enable this system-wide transformation.
“We often talk about Scope 3 for emissions, but you probably need to have a Scope 3 for everything,” she explained. “What is your Scope 3 around bribery and corruption? Around human rights and labor?”
It’s not just about big partners — it’s all of them, Ojiambo noted.
“There’s immense opportunity for business growth and sustainability right now,” she said. “The challenge looks different from across the globe.”
In most economies, especially emerging ones, small and midsize enterprises (SMEs) play a major role. The World Bank estimates that SMEs represent about 90 percent of businesses and more than 50 percent of employment worldwide. Plus, they serve as at least a part of most big businesses’ supply chains.
If SMEs are not taken into consideration, Ojiambo noted, they could be the weakest point of SDG success. The UN Global Compact is developing new programs and strategies to support SMEs, specifically by leveraging digital tools and value chains to reach scale. Ojiambo pointed to one notable initiative: a new intersectional gender and responsible procurement program.
How do businesses ensure that they’re taking action on SDGs, and that this action is driving real change? Ojiambo said that the answer is accountability.
“Any business leader first needs to be accountable to self,” she said. “You’re running a business for the long term. So the very essence of accountability needs to start within the company itself. I think the second essence of accountability is to look at your broader stakeholders and see who you need to be accountable next to. It’s important to be able to address customer need, regulatory need, shareholder needs. Accountability for me is broad-based and taps into the elements that an ESG framework brings to bear.”
Ojiambo noted that accountability is especially crucial right now. “We live in a divided world and there’s a trust deficit,” she said. “And a lot has to be done to bring all that back to harmony.”
This is especially important in the face of the ongoing climate crisis. “All of our future depends on having an environment that is in harmony with the way we produce and consume,” she said. “So to the extent that we run the risk of leaving a future world very different from the one that we live in. That is extremely urgent.”
As the clock ticks towards 2030, the challenges are mounting, but the opportunity is immense. There’s already been “a lot of good work and intent around understanding sustainability and SDGs, but now we need to see the business and the outcomes,” Ojiambo said. “And business can play a key role in that.”
View the discussion thread.
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