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Industry’s role in attaining the UN SDGs

October 10, 2018

At the UN Summit in 2015, world leaders agreed to strive towards 17 Sustainable Development Goals (SDGs) that aim to build a better world by the year 2030. How much headway has been made on the road to realizing them? And how can companies expedite progress? 

The United Nations Development Program describes the SDGs as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. Dr. Guido Schmidt-Traub, Executive Director of the Sustainable Development Solutions Network, explains what the goals mean to you and me, and what companies need to do to help achieve them.

Businesses’ role in combating global challenges

Dr. Schmidt-Traub stresses the fact that the SDGs are not just a UN project. “These are world goals that have been agreed on by every government. They point out deep global issues that must be solved. Examples include extreme poverty, which still affects many parts of the world; inequality, which is an issue that affects rich countries as well; but also, issues relating to environmental sustainability, such as climate change, loss of biodiversity in oceans and unsustainable food systems.”

But what should the business community know about the SDGs? “A basic truth is that every country needs to realize that while we have done phenomenally well in raising average per capita incomes in many parts of the world, in developing new technologies to improve livelihoods, and also in exploiting resources that were previously thought to be unexploitable, we are on a path which is not sustainable,” he says.

According to Schmidt-Traub, businesses need to be aware of the SDGs because they are often the ones who have the solutions to overcome these problems and the ones to deploy solutions on a greater scale. Moreover, some of the problems that we face are caused by businesses. “Therefore, businesses are a critical part of this. It’s not a finger-wagging exercise­­ – it’s an invitation to work together towards achieving these very bold goals on a global level,” he states.

From rhetoric into action

When it comes to nations’ performance in working towards achieving the SDGs, Schmidt-Traub is impressed by how visible the goals have become only two years after their adoption. “The goals have been widely recognized. Most countries have issued a strategy, and a lot of companies have also taken them on,” he says.  

Even so, there’s a lot more that needs to be done. “We’re not yet on track to meeting the goals. We haven’t yet seen the deep changes that are needed to, for example, decarbonize energy systems. At this point, every country can and must do better. Europe is definitely on track to meeting its own commitments – for instance, on climate change. But the EU needs to do far more than this. The rhetoric is improving, but the challenge now is to translate it into action. That’s the hard part,” Schmidt-Traub continues.

Indeed, in his view, European countries and the EU are not as advanced on this front as might otherwise be perceived. “Interestingly, our work shows that developed countries are facing significant challenges. Addressing long-term challenges requires long-term development strategies, which most European countries do not have. Quite often it is countries outside the club of highly industrialized economies that have better strategies, with tools, procedures and policies in place. Some of the better examples of SDG implementation come from large, emerging economies,” he says, listing Indonesia and Colombia as good examples.

“Not yet driven by the SDGs, China has a very systematic long-term perspective, a very bold and ambitious set of long-term goals. We’re at a point where European automotive companies don’t meet environmental standards as well as China. It’s becoming a very interesting world.”

Schmidt-Traub describes the SDGs as a stretch agenda. “What I say to business leaders is that businesses thrive on ambitious goals. Every successful business leader sets these for their organization and then leads their team to success, using the goals to inspire everyone to go beyond what they might have thought possible on their own,” Schmidt-Traub explains.

Companies as corporate citizens

Schmidt-Traub emphasizes that the SDGs cannot be achieved without companies playing an active and decisive role. However, they cannot be met by the private sector alone. “That’s illusory. What companies can and need to do is manifold,” he points out. “First, they are corporate citizens of their countries. No one is expecting businesses to meet societal issues on their own, but they need to engage with this agenda and support it actively, educating and training their workforce.”

Moreover, to understand how they can contribute, companies need to figure out the solutions they can mobilize at a greater scale. “What are some business practices that need to change or stop outright? And more generally, how can companies work with governments and other partners to get on a path towards achieving the goals?”

“The challenge here is that any company leader focuses almost exclusively on what the company can achieve on its own. Contrastingly, what the SDGs invite us to do is to answer questions which are slightly different in nature, such as how we achieve complex goals – like ending extreme poverty or getting every child to school – to which companies may only be able to make a modest contribution.”

Schmidt-Traub sees a need to educate business leaders. “CEOs are good at running companies, but they often know very little about sustainable development, and quite often they don’t know how little they know. Today, it is no longer possible for anyone to run any organization, public or private, without quite a deep grasp of climate change, for example,” he argues. “We need a shared, robust understanding of the problems in order to work together successfully to solve them.”

The goals introduce opportunities

Schmidt-Traub asserts that both big and small companies can make a difference. “Large industrial companies, such as those in manufacturing, can contribute to all the SDGs in some form. They can provide employment and help generate livelihoods, offering decent work and thus helping to eradicate poverty,” he says. On the other hand, companies in fields like mining and paper have great environmental effects.

He identifies the energy transition as a key area where industrial companies have the biggest potential to make an impact. “Governments have adopted the goal to achieve net-zero greenhouse gas emissions by between 2050 and 2070. That means any source of emissions that could conceivably be eliminated will have to be eliminated,” Schmidt-Traub explains. According to him, what industrial companies and their customers can do is to find out what role they can play in decarbonizing the energy systems of the countries where they operate.

Efforts for achieving the SDGs also generate massive new business opportunities. “We are now dealing with completely different business models, driven to a significant extent by the imperative to reduce emissions. In the car industry, for instance, the biggest value added in the future will be in software and in batteries,” Schmidt-Traub notes, continuing, “Similar transformations will continue to happen elsewhere. Every company needs to see how it can come out ahead and seize the opportunities that are opening up.”

From his perspective, the forerunners in sustainable development represent various sizes and industries and that ­even a small enterprise can have a profound impact. “Despite being unable to shift a global supply chain, every small company should expect its larger clients to be engaged with SDGs.”

Schmidt-Traub also mentions that there is a small and important group of companies that want to take on some of the technology challenges of meeting the goals. “They sit down and work with governments, research labs, universities and other partners to define the need and to develop a strategy for achieving them. Those are the kinds of companies that are leading the pack and are ahead of everyone else.”

Embracing the difficulty

How optimistic is Schmidt-Traub that the SDGs will be achieved? “To me, this is the wrong question. The real question is what it would take to achieve them.”

He reminds us that no company thrives on easy goals. “I think this is the same approach we should take with the SDGs. I have no illusion on how challenging this is, but success will only be possible if everyone – including businesses – assumes their own responsibilities,” he says.

“None of these problems have easy answers, but companies deal with this all the time. Companies always operate in the face of imperfect information – they must constantly place bets on how the market is going to develop. We need to apply the same attitude, the same spirit and the same tools to these vastly more complex societal problems as outlined in the SDGs.”

“We are not dealing with unsolvable problems. We have tools for this and we just need to deploy them. The leaders of successful companies understand that anticipating and understanding trends is key to success. That’s what we invite companies to do,” says Schmidt-Traub, concluding, “We have been incredibly successful as a species. Businesses have also been extremely successful. What we all need to do is to just put our minds to these goals, and then we can achieve them.”

Dr. Guido Schmidt-Traub is Executive Director of the UN Sustainable Development Solutions Network (SDSN), which operates under the auspices of the UN Secretary-General to support the implementation of the Sustainable Development Goals and the Paris Climate Agreement. He leads the SDSN’s policy work on areas such as long-term pathways for sustainable land-use and food systems, financing for development and the SDG Index.

 

SUSTAINABLE DEVELOPMENT GOALS

Interlinkages between the goals

Eeva Furman, Director at the Environmental Policy Center of the Finnish Environment Institute, suggests ways for industry to accelerate progress towards achieving the SDGs.  She stresses the interlinkages between the goals and of the means of achieving them.

For example, on taking urgent action to combat climate change and its impacts (Goal 13), Furman highlights leverage points where industry can make a difference while also profiting from new business opportunities (Goal 12). These include developing green infrastructure (Goals 14 and 15) and helping create smarter cities (Goal 11) in terms of health (Goal 3) and transport, as well as optimizing the logistics of products (Goal 9).

But at the top of the list of ways industry can mitigate climate change, she calls attention to the potential for businesses to join the circular economy: “Companies can take part in the societal move (Goal 17) towards a circular economy. This can be done in direct product development and through the development of technical processes. It can also include social innovations such as developing sharing platforms for materials, collection networks for the re-use of products, for example, or by developing well-packaged products which also include service. This keeps the responsibility of energy and material efficiency (Goals 7) in the hands of the company,” Furman says.

For the full list of goals and infomation on how to take action, visit www.un.org/sustainabledevelopment

Konecranes’ response to the UN Sustainable Development Goals

Satu Kaivonen, Environmental Specialist at Konecranes

Why are the goals relevant to Konecranes?

All actors need to take part in making the UN SDGs a reality, but reaching them requires creativity, innovations and decoupling value creation from resource consumption. We believe that working towards the goals is necessary if we wish to help build a more sustainable world, secure sustainable growth and create added value for society. By boldly exploring new possibilities, we are able to make even radical changes in our business models if needed. You could say that the idea is to change the game before it changes us. 

Furthermore, the goals serve as a stimulus for us to cooperate more closely with our stakeholders. They offer a clearer framework for discussing and solving global challenges by putting all parties on the same page, making it more likely for us to achieve results.

How has the company approached the goals?

In our view, we can achieve the most significant results by focusing on the aspects on which we can best make an impact. This is why we have chosen to commit to ten of the goals, concentrating our efforts on those that are the most relevant to our business, and integrating them into our corporate responsibility targets.

These are, namely, (Goal 3) Good health and well-being, (Goal 5) Gender equality, (Goal 6) Clean water and sanitation, (Goal 7) Affordable and clean energy, (Goal 8) Decent work and economic growth, (Goal 9) Industry, innovation and infrastructure, (Goal 10) Reduce inequalities, (Goal 12) Responsible consumption and production, (Goal 13) Climate action, and (Goal 16) Peace, justice and strong institutions.

These ten SDGs are included in our corporate responsibility focus areas and their roadmaps.

In addition to striving to meet our own targets, such as decreasing greenhouse gas emissions, increasing safety, investing in diversity and managing our operations with ISO standards, we can contribute positively to reaching the SDGs beyond our own operations­ ­­– in other words, by managing our supply chains and decreasing the impacts of our products.

What are some notable ways in which Konecranes has been actively pursuing the goals?

On a global scale, we have been establishing our governance structures and management approach on many of the goals’ topics. For example, we have launched a diversity policy, renewed our anti-corruption and anti-fraud policies, and are putting an even greater effort into managing safety. Our business units are putting these guidelines into place and are supporting the corporate targets on a local level.  

In terms of partnering with other sectors, we have signed the United Nations Global Compact, voluntarily pledging to implement sustainable business practices and support the UN’s ten universally accepted principles in the areas of human rights, labor, environmental and anti-corruption. We have also started working with Nordic universities to find new, sustainable business models that facilitate the transition to a circular economy.