MIT Sloan Management Review: Supporting sustainable development goals is easier than you might think (February 2018)

It is possible for business to be both sustainable and profitable — but some sectors have a smoother path than others.

Companies and investors are being asked to support the 17 Sustainable Development Goals (SDGs) for 2030 — what some have described as “the closest thing the Earth has to a strategy”— since the public sector alone does not have the resources to do so. At the same time, companies must create value for their shareholders to create the returns they need for their ultimate beneficiaries.

In essence, both are being asked to do good and do well at the same time.

This raises a number of obvious challenges:

  1. Unlike with financial performance, there are no universal standards for how to measure a company’s environmental, social, and governance (ESG) performance.
  2. As a result, there is a large ecosystem of nongovernmental organizations (NGOs) and data vendors attempting to solve this problem—so many that both companies and investors struggle with which ones to use.
  3. Companies remain sceptical about whether their shareholders will reward them for ESG performance over the long term.
  4. The 17 SDGs, which have 169 targets, are about improving the planet, whereas ESG metrics are about a company’s performance. What is missing is a way to show how these are related to each other.
  5. Investors remain frustrated with companies that do a poor job of explaining how their ESG performance contributes to financial performance.
  6. Without strong support from the investment community, the corporate community cannot make the contributions necessary to achieve the 2030 goals.

These challenges are surprisingly manageable!

The key lies in leveraging the work of the Sustainability Accounting Standards Board (SASB) in the context of the SDGs.

Read more here or go to MIT Sloan Management Review here.

Posted in CSR, bæredygtighed og samfundsansvar, CSR-strategi, SDG - Sustainable Development Goals.