We have all become aware these are times of change in our human evolutionary journey.
Traditional social constructs are transforming in a deep way, influencing household structures, religious practices and socialising habits. The current food production system is clearly unsustainable. The politics of deforestation, fossil fuels extraction and industrial pollution are accelerating the climate change problem, which in return affects food production, clean water access and mass migration of people.
It is now in the popular discourse that the economic model of capitalism needs to re-imagine itself to face natural resources limitations.
How the paradigm shift will happen is still being debated, however this idea has reached common knowledge.
Consumers are increasingly demanding companies to take responsibility for the unjust social impacts deriving from their activities. Citizens all over the world are questioning the role of governments in protecting public interests and ecological assets, with trust towards institutions on an all-time low across the board. Most of us are looking at the future with a sense of insecurity, worrying that, if we do not address environmental and systematic problems now, we will soon reach the point of non-return, and our very existence could be put into jeopardy.
The Sustainable Development Goals (SDG) have been designed as the only collective response to the serious challenges we are facing. They provide a framework for action for all society’s stakeholders: the public and private sectors, civil societies and not-for-profit organisations.
Let’s reflect further on what is happening.
BUSINESS AS 'UNUSUAL' AND THE DEMYSTIFICATION OF CSR
Consumers expect businesses before governments to take actions in implementing ethical and sustainable practices.
Ex Unilever CEO Paul Polman, talks about the importance for companies to ‘feel uncomfortable’ in the choices they take to tackle big issues, as a way to demonstrate they are making real efforts against solely pursuing PR attention. He also suggests the need for a much broader collaboration of all society’s stakeholders focused on long term objectives. This means for businesses to go beyond quarterly wins and for governments to rule on-long terms actions going beyond short-term electoral mandates.
Though 'philanthropic giving' goes back a long way in history, it was at the end of 1900 that programmatic CSR started to become a popular way for international organisations to ‘give something back’ to the communities where they did business. For instance, in 1850’s Dublin, the Guinness Family looked after their employees in a variety of ways: from offering wages 20% higher than average at the time, to providing pension plans as well as offering free meals and paid medical assistance.
Today, those genuinely driven by the desire to make a difference are going well beyond CSR, by transforming their business models to sustain societal needs. This is because CSR is not enough to support the systematic societal changes needed. Despite providing some support to recipients, CSR is effectively a marketing tool, a ‘brand enhancer’ with multiple functions to please the increasingly socially aware workforce, compliment shareholders reputation and customers expectations.
Patagonia Inc. is probably the world’s best example of a successful ‘conscious’ company. Since its founding in 1973, the privately-owned outdoor apparel maker has been a pioneer in treating its employees well, caring for the environment, and making a profit while ‘doing good’. Patagonia uses only sustainably sourced and recycled materials and it is one of the most politically engaged companies in the US, advocating climate action and having set up a $42 million fund to invest in environmentally and socially responsible start-up companies.
The UN’s GRI (Global Reporting Initiative) defines a pathway for businesses on how to adopt and report on the SDG. The first step is understanding the goals and thereafter, align them with business priorities.
BUSINESS ADVANTAGES COMING FROM THE ADOPTION OF THE GLOBAL GOALS
An increasing number of companies are using ESG (Environmental, Social and Environmental) criteria as part of their corporate culture. This is reflected in how they run their operations, in how much taxes they pay and the measures they adopt to limit carbon emissions and waste production, among many other things.
The 2030 Agenda (UNDP, 2017) has now directly linked 11 SDG to the private sector:
· SDG 3: Ensure healthy lives and promote well-being for all at all ages;
· SDG 7: Ensure access to affordable, reliable, sustainable and modern energy for all;
· SDG 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all;
· SDG 9: Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation;
· SDG 10: Reduce inequality within and among countries;
· SDG 11: Make cities and human settlements inclusive, safe, resilient and sustainable;
· SDG 12: Ensure sustainable consumption and production patterns;
· SDG 13: Take urgent action to combat climate change and its impacts.
Every goal has a set of indicators that can support measurements and report mechanisms.
Pricewaterhouse Coopers (PwC) run a study with over 700 companies to figure out which goals are the most important for businesses.
The most selected ones were identified as:
· Decent Work and Economic Growth (SDG8),
· Responsible Consumption and Production (SDG12) and
· Climate Action (SDG13).
Prioritising these 3 goals might appear the obvious ones, where a business has a role to play, however as all goals are interlinked, many more should be actively targeted. In average company prioritises 7 of the 17 goals.
The prize of aligning business strategy with the SDG are multiple:
· Market incentives – it has been estimated that achieving the SDG could unlock $12 Trillion yearly in business value across 4 economic systems (Food & Agri., Urban Mobility, Energy and Health and Well-being) creating more than 380 million jobs.
· Business supporting all society’s stakeholders, in particular the State, will grant them a better status to operate from the competition.
· The Edelman Trust Barometer is showing that trust toward companies and institutions is extremely low in particular in areas like competence and ethics. Adopting effectively the SDG will have the effects to forge new and improved social contracts.
BRINGING INNOVATION BACK INTO THE PUBLIC SPHERE
The role of governments has to change in relation to economic efficiency as well as its own productivity.
The free-market economy has thrived on the ‘liner model’ of supply and demand, whereas the sustainable model is the ‘circular economy’, where everything is recycled and the production for new goods can decrease, slowing down the resources depletion. This takes a great deal of education and understanding that must see governments and businesses working together.
Mariana Mazzucato (Founder of the European Research and Innovation Programme) is a strong advocate for Innovation and Research & Development (R&D) to be owned by the State. In fact, she highlights that all the technological and financial innovation in the US and other European countries has been heavily funded by the State but somehow have been reclaimed by the private sector. Looking at the details it transpires that, for instance the parts of the smartphone that make it smart—GPS, touch screens, the Internet—were advanced by the Defence Department. Tesla’s battery technologies and solar panels came out of a grant from the U.S. Department of Energy. Google’s search engine algorithm was boosted by a National Science Foundation innovation. Many innovative new drugs have come out of NIH research.
Thanks to the capitalism system-design, these companies have the ability to sell these innovations at high profits and retain all the wealth created, instead of fairly distribute it to the rest of society.
The SDG do provide a common framework to lead us towards a better future, however, the time at our disposal is short. As we enter the second decade of the millennium we have only 10 years to stop the climate crisis and to change the global economic structure.
It’s a good assumption to think that, if we manage to fix our carbon footprint and reduce waste, this will have a positive effect on other issues. Yet, it is a race against time. As an increasing number of businesses are looking to adopt a sustainable working model, the pressure from citizens must turn now into electing political leaders who have genuinely embraced this new way of thinking.