Developments and trends
The SDGs continue to gain momentum, inform and influence business action.
Since the SDGs were launched in September 2015, there have been several significant developments which seek to support the integration of this crucial agenda into business decision-making practices.
A number of publications have sought to advance the business case around the SDGs. Perhaps the most impactful study in this regard has been the landmark Better Business, Better World report by the Business & Sustainable Development Commission which articulated how efforts to realize the SDGs could unlock at least US$12 trillion a year in new market value by 2030.
Other business relevant studies and resources that present a strong business case and make recommendations around contributing to the SDGs can be further explored here.
Growing investor interest
In line with escalating trends around the incorporation of environmental, social and governance (ESG) considerations into investor decision-making, some investors have also undertaken efforts to integrate the SDGs into their portfolio analysis. Dutch pension fund managers APG and PGGM have developed a taxonomy to identify investment opportunities that are linked to the SDGs. Meanwhile the pension fund ABP has pledged to double its allocation to sustainable development investments to $68 billion by 2020, while Australia’s Cbus Super fund and CalPERS from the US have also announced plans to align their investment strategies with the SDGs. Most recently, Robeco and RobecoSAM have introduced a new bond strategy aimed at corporate issuers to incorporate the SDGs.
Emerging SDG finance mechanisms
We are also starting to see the emergence of new mechanisms geared towards financing SDG impact. In 2017, HSBC raised US$1 billion through an SDG bond, which will be used to support projects that are aligned to seven selected SDG targets. Similarly, the World Bank has issued bonds in collaboration with BNP Paribas that directly link returns to the performance of companies in advancing development priorities set out in the SDGs and continues to direct proceeds of all its bonds to development programs that are in-line with the SDGs.
The Blended Finance Task Force, launched in 2018, seeks to further explore how private sector finance can be more effectively channeled towards impacting the SDGs, particularly in the field of infrastructure.
Increasing demands for reporting and benchmarking
The SDGs also bring a new dimension to corporate disclosure. While many companies already report on SDG relevant topics, aligning with the goals and identifying progress made provides an opportunity to place more focus on the impacts of their activities and connect their efforts to a globally relevant agenda.
Additionally, there are also efforts underway by the World Benchmarking Alliance to establish a publicly-available global benchmark to measure and compare the performance of leading companies when it comes to the SDGs.
Business & Sustainable Development Commission
WBCSD has actively supported the two-year initiative of the Business & Sustainable Development Commission. The Commission was created to make the business case for the Sustainable Development Goals. It’s flagship report, Better Business, Better World, mapped the economic prize for companies that align with the SDGs, and how to achieve it. The Business Commission formally closed its doors in January 2018, but its work continues to drive business engagement with the SDGs.