According to the KPMG International report, How to report on the SDGs: What good looks like and why it matters1, some 40 percent of the world's largest companies reference the UN Sustainable Development Goals (SDGs) in their corporate reporting. However, there is not yet an established process, benchmark or standard for reporting on the SDGs. Which is why getting it right matters.
The 17 SDGs set out to solve the greatest economic, environmental and social challenges of our world by the year 2030.
They seek to create a world free from hunger, poverty and inequality; a world where everyone enjoys good health, education and decent work; a world where wildlife and ecosystems are protected and everyone lives peacefully together.
No one can argue against the desirability of such a world, even if the vision may seem utopian and the deadline ambitious. Yet what is the role of business in all this? And what are the communications opportunities and pitfalls?
While the SDGs were designed as goals for governments, the UN's 2030 Agenda for Sustainable Development2 specifically calls on businesses “to apply their creativity and innovation to solving sustainable development challenges…” A raft of reports and opinion pieces have suggested that businesses that contribute to achieving the SDGs will enjoy enhanced growth and productivity. Trillions of dollars in cost savings and revenue opportunities are there for the taking and hundreds of millions of jobs can be created, according to the Business & Sustainable Development Commission3, an organization created specifically to make the business case for the SDGs.
But there's a catch. The same research also makes it crystal clear that, in order to achieve the SDGs and grasp the financial prize, “business leaders need to strike out in new directions to embrace more sustainable and inclusive economic models." Business as usual is not an option, it says.
Which brings us to the dilemma faced by communications directors. At first glance, the SDGs may seem to be a tempting platform from which to promote the company as a good corporate citizen. Many communications directors may even be under pressure from their CEO or Board to publicly demonstrate what the company is doing to help achieve the SDGs.
This is a good point at which to step back and ask yourself some tough questions:
“Do we have a complete understanding of all the positive and negative impacts our business has on people and the environment? Are we prepared to be open and transparent about them?”
“Is our company really doing anything differently to help achieve the SDGs? Have we developed new programs to reduce our negative impacts? Have we launched new products, services or business models to increase our positive impacts?”
“Does our company walk the SDG talk? Do we make our investment decisions based on environmental and social factors as well as financial returns?"
If your answer to these questions is “no”, “maybe not” or even “not sure”, you should proceed with caution when it comes to communicating your company's SDG activities and performance. Otherwise your company may be exposed to accusations of “SDG washing”.
“SDG washing” is an evolution of the term “green washing” originally used to describe companies that portray themselves as environmentally friendly when in reality they are not. “SDG washing” refers to companies that use the SDGs as “window dressing” to present a deceptively positive picture of their environmental and social impacts. Examples of SDG washing include communicating a one-sided story of your company's positive contributions to the SDGs without acknowledging that - like any business - it also contributes to the very problems the SDGs seek to solve. Repackaging pre-existing sustainability and CSR programs as SDG solutions can also be considered a form of SDG washing.
If your company is accused of SDG washing, for example by an NGO, a campaign group, a journalist or a customer, then you risk damaging your organization's credibility, reputation and relationships. On the other hand, if your organization is seen to be honest about its impacts, and serious about changing the business to contribute to the SDGs in meaningful ways, then there is much that can be gained.
To support and guide communications directors in designing their SDG communications, KPMG professionals have developed nine principles of good SDG communications.
Principle 1: Show the company understands the business case for taking action on the SDGs
Without a clearly defined business case, there is a risk that your company's action on the SDGs could be limited to philanthropic programs. While helpful in building reputation and relationships, such programs are often separate from core business. Communications around the SDGs will be far more effective and convincing if the company demonstrates that it understands the business opportunities inherent in the SDGs; for example, the opportunity to develop new products and services that help to solve global problems while generating revenues and profits for the company. The lack of an SDG business case, on the other hand, could be a missed opportunity for many companies given the huge potential market for SDG-related products and services.
Communications directors can play a lead role in starting and driving the internal conversation about the business case for SDG action. That conversation would benefit from a senior champion, preferably the CEO, Chair or other board member, and should engage the company's core functions in order to explore how the SDGs can shape investment strategies and risk management, and generate returns to the bottom line.
Principle 2: Communicate from the top of the organization
Good SDG communications demonstrate leadership commitment to the SDGs as part of the company's long-term strategy. For example, discussing the SDGs in the CEO and/or Chair's annual report messages gives a clear signal that the company's action on the SDGs is driven from the very top of the organization.
It is important to remember that the SDGs have a 15-year time frame from their launch in 2015 to 2030. Achieving the goals, and reaping the business benefits of doing so, will require consistent and cumulative action over that period. Communications should therefore continue to demonstrate that the SDGs are central to the CEO and/or Chair's vision over the long term. Failure to maintain public commitment to the SDGs from the top of the organization could expose the company to accusations of opportunism, damage its credibility and affect relationships with strategic partners such as governments.
Principle 3: Take a balanced approach to communicating your company's impact on the SDGs
Communications should clearly present both the positive and negative impacts a company has on the SDGs, showing how the company is contributing to global problems, as well as helping to solve them.
Transparency leads to trust - if a company does not demonstrate that it fully understands all its impacts, communications can lack credibility. Broad narrative descriptions of impacts are a starting point, but methodologies to quantify corporate impacts are maturing rapidly. Quantifying impacts presents a more sophisticated and convincing picture.
Principle 4: Identify priority SDGs for the company
Communications should identify the specific SDGs the company considers most relevant to its business and stakeholders, and on which it can have the most impact. Not all the SDGs and their underlying targets are of equal relevance to every company, sector or geography. Companies should focus their actions on the goals on which they have the greatest actual and potential impact, either positive or negative.
Principle 5: Explain how the company has prioritized the SDGs
Communications should explain the method or process the company has used to identify the most relevant SDGs and prioritize them for action. Doing this provides all stakeholders with a window into how comprehensively and credibly your company has evaluated the SDGs and on what basis it has selected those on which it will take action.
Principle 6: Identify specific SDG targets that are relevant to your company
The 17 SDGs are broad and topline. Underneath the SDGs sit 169 individual SDG targets. If your company is to be perceived as serious about the SDGs, then it needs to show that it understands the SDG targets as well as the 17 goals. While the 169 SDG targets have been designed for governments rather than companies, corporate communications can disclose which of them the business aims to contribute to. Focusing on specific SDG targets helps a company to define and communicate its SDG-related business priorities more clearly and to implement more effective action.
Principle 7: Disclose KPIs for SDG performance
Communications should disclose how the company intends to measure its contributions to the SDGs and what SDG-related performance goals it is setting. Setting goals demonstrates that the company is serious about growing business value by meeting global needs. It can also strengthen relationships with business partners such as customers and suppliers.
Principle 8: Make sure the company's SDG performance goals that are SMART?
As with any corporate target or KPI, SDG performance goals should be SMART, i.e. specific, measurable, achievable, relevant and time-bound. By putting SMART goals in place, your business can measure, monitor and communicate its contribution to achieving the SDGs in a convincing and compelling way. For example, stating that the company aims to lift people out of poverty is not enough. You should set a target for how many people will be lifted out of poverty within what timeframe, and how success will be measured.
Communications directors are the guardians of the company's reputation and relationships. They therefore have a critical role to play in shaping their company's approach to the SDGs rather than simply communicating it. Following the principles above can help you to get it right and avoid the common pitfalls.
For further information download the report: How to report on the SDGs: What good looks like and why it matters.