Business’s approach towards Sustainable Development Goals: self-interest and cherry picking

Many businesses are profiting from a push for sustainability and ignoring bits they don’t like.

It has been over a year since the all 193 members of the United Nations adopted its 17 Sustainable Development Goals (SDGs).

From eliminating poverty to climate action and consumer responsibility, the SDGs represented businesses around the world with a framework to contribute to sustainability. Upon their adoption, companies from across the globe announced plans to integrate their business models around these targets.

Inevitably, an approach of enlightened self-interest has been taken towards these goals. Unilever CEO Paul Polman dubbed the SDGs as “the greatest economic opportunity of a lifetime.” Companies have zeroed in on SDGs that demonstrate the greatest potential impact and opportunity in areas that will help drive their own business growth. If there is room for profit in solving social problems like gender equality (SDG 5) and promoting decent work and sustainable growth (SDG 8), businesses are more inclined to cooperate.

Indeed, companies have long understood the benefit of being socially responsible. It is no longer enough to sell a decent product and offer good service. Customers are increasingly flocking to businesses which use their money for good. In fact, 78% of consumers from across the globe said they would be more likely to use the goods and services of an organisation who had signed up to the SDGs.

Most attractive to businesses is the potential to expand their global market share when adopting SGDs. Huge corporations like Google have long sought new customers in developing regions; places where there is more scope to make gains for the SGDs. In these regions, small and medium sized enterprises (SMEs) will play a crucial role in their countries’ development. Therefore, large multinationals are seeking to expand their brand by providing the necessary resources for SMEs to grow. In India, Google set a target to get 20 million SMEs online by 2017 by using the mobile app Google My Business. It’s part of the internet giant’s plan to get the ‘next billion’ of internet users working with its products.

Even when working under the goal to poverty elimination, big companies are finding ways to reach new markets. MasterCard has worked with financial institutions and governments to make the financial system more accessible to more than 180 million previously excluded people. By 2020, the service provider hopes to raise that number to 500 million. One example of MasterCard’s work was collaborating with the South African Social Security Agency to deliver government funds on 10 million debit cards. Thanks to this scheme, five million of the 16 million South Africans on benefits now have access to a formal financial tool for the first time. By expanding its market, the financial service provider has also given millions a tool out of poverty.

But to avoid losses, companies have set out to cherry pick SDGs they thought to be most relevant to their business. The result of this means that some SDGs are left out in the cold. Businesses see little opportunity in goals to reduce inequalities (SDG 10) and conserving marine life (SDG 14) and saw little opportunity. As a result, there is little initiative for businesses to act.

One manager from a Colombian mining company said: “As a socially responsible organisation, we will respond to the SDGs and apply ourselves and implement those that impact the business and can be most effectively implemented for the common good.”

And although businesses see the big gains to be made from adopting SGDs, there is little convergence between companies and citizens on which SGDs are most important. People generally place quality education (SDG 4) and zero hunger (SDG 2) highly. Again, few businesses see much opportunity here.

This cherry picking also leads to an imbalance between regions. Rich regions are focusing primarily on climate action (SDG 13), while poorer regions are prioritising development challenges. Quality education (SG 4), came out top in Africa, for example. Indeed, respondents in Africa, Latin America and the Middle East are engaging most with the goals.

Worse of all, many businesses have chosen to ignore SDGs all together. According to two surveys, businesses are failing to integrate their plans to focus on sustainability, despite agreeing to play a key role in achieving the ambitious goals. With an estimated investment gap of at least $3tn annually across the SDGs for the next 15 years, private sector involvement is vital for success. Yet less than half of global companies now plan to integrate the goals into their business approach, according to Ethical Corporation’s State of Responsible Business 2016 report.

Progressive businesses and governments must recognise the need to evolve SDGs in order to unlock more sustainable development. This means giving the goals more bite.

Malcolm Preston, global sustainability leader at PwC has called on governments to enact more laws, incentives and deterrents for sustainability issues. Another idea is for policy-makers could also consider making corporate contributions to sustainable development mandatory, says Ashoka’s Archana Sinha. India, for example, has obliged major organisations to donate at least 2% of their net annual profit to charity.

With teeth, it is more likely that the SDGs will be achieved.