Agenda 2030: Scaling up collective business action to transform supply chains
How can we turn the Sustainable Development Goals (SDGs) into a truly transformative business agenda? And what needs to happen in 2018 for this to become a reality?
Over the past three years, as momentum for the SDGs builds, we’ve seen many companies come forward to endorse the Agenda 2030. However, turning commitments into concrete action is a different challenge: despite an encouraging UN report indicating that 82 out of 100 blue chip companies demonstrated commitment to the SDGs in their 2016 annual reports, other recent reports highlight companies’ lack of engagement in helping to deliver the SDGs. The UN Global Compact for example found more than one third of its signatories had not yet developed any measurable SDG targets, and a study of around 500 companies by PwC found more than 60 percent of companies were not meaningfully engaging in Agenda 2030.
The SDGs promise significant economic rewards for companies that invest in innovative solutions and transformative change. According to a flagship report from the Business & Sustainable Development Commission, achieving the SDGs could create 380 million jobs and unlock at least $12 trillion in opportunities for business by 2030. This clearly favours businesses taking action over those taking a back seat.
Business engagement is pivotal to achieving the 2030 Agenda. And sustainable sourcing is an important step for companies’ contribution to Agenda 2030. Once a company’s sourcing is sustainable – or on the way towards it – the company can chart a new, responsible course for itself and for the sector. And credible sustainability standards can be a ready-made tool to support companies in doing so.
Supply chain impacts
By understanding and mitigating the negative impacts in their own supply chains businesses stand to make a critical contribution to the realization of the SDGs. As a concrete example: progress on SDG 3 (health and wellbeing), SDG 8 (decent work), or SDG 15 (life on land), will only be effective if a company is not contributing to hazardous work environments, forced labour conditions, deforestation, biodiversity and ecosystem degradation.
These supply chain issues are not new and sustainability standards can help address these. The report advocates direct benefits for businesses using sustainability standards which can result in efficiency gains through improved management practices, increased transparency and traceability throughout the whole supply chain, and better-quality relationships between suppliers and buyers. Credible sustainability standards may not be a silver bullet, but they can help create a new ‘normal’ for more responsible practices across entire sectors.
A case for collective action and cooperation
Only through pre-competitive, collective, sector-wide action will companies achieve the sort of market transformation needed to help realize the 2030 agenda for sustainable development. Or, as the Business & Sustainable Development Commission outlined in its Better Business, Better World report “ there is an imminent need for industry-wide coalitions ready to develop and implement SDG roadmaps”.
Sustainability standards and multi-stakeholder roundtables can define better practices across sectors and help catalyse much needed collective action offering important resources, knowledge and innovative approaches.
There is an increasing understanding that companies who manage their supply chains sustainably are also “healthier and more successful” companies, and thus less risky. As such, a number of banks and investors have started to channel investments based on sustainability performance and for performance metrics, are turning to credible certification systems. The social and environmental impacts of unsustainable palm oil production for example, represent significant risks for investors, and various institutions including the International Finance Corporation, Credit Suisse and Rabobank, and HSBC require their clients to achieve RSPO certification.
Also, business coalitions have started to emerge around specific targets (such as the 8.7 Coalition) or specific sectors, products or commodities, like the Cement Sustainability Initiative, the Sustainable Coffee Challenge, or large joint efforts currently undertaken to halt deforestation. Examples include the Cerrado Manifesto which aims to halt deforestation and native vegetation loss in Brazil’s Cerrado, and is supported by more than 60 large, multinational companies including Ahold Delhaize, Marks & Spencer, METRO, Tesco, McDonald’s, Unilever and Walmart , as recently announced at the World Economic Forum (WEF) in Davos. The Collaboration for Forests and Agriculture (CFA), funded by the Gordon and Betty Moore Foundation, and the GEF Good Growth Partnership are other examples of collective actions that aim to increase demand for deforestation/conversion-free commodities and provide transparency tools for implementing supply chain commitments.
The true impact of these coalitions will depend on how supply chain approaches are implemented on the ground (eg. through a constructive dialogue with local stakeholders), and how sustainability itself is managed within supply chains (eg. by leveraging tools, developing clear and ambitious targets and having public monitoring and transparent accountability in place). The Global Salmon Initiative, with its commitment to Aquaculture Stewardship Council (ASC) certification and publicly tracking annual progress is one such example.
Time for action!
Businesses helped define the 2030 agenda, now is the time to help implement commitments through concrete, science-based targets, quantified impacts and transparent reporting, and making good use of third party verification and certification. The WBCSD and its members have been thought leaders in many areas including business’ contribution to meeting the SDGs. We hope that this will transform into a wave of action for sustainable business practices – a prerequisite for achieving the 2030 agenda.
By Kavita Prakash-Mani, Practice Leader Markets, WWF International and Karin Kreider, Executive Director, ISEAL Alliance
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Fulai Sheng, UN Environment senior economist