Is your business living up to its SDG commitments?

Early in 2020, B Lab and the UN Global Compact co-launched the SDG Action Manager. This free tool uses the impact measurement and management framework of the B Impact Assessment to help companies understand how their business practices and outputs are contributing towards the SDGs, as well as set goals for improvement and track progress. 

Nine months post-launch, after the world had been transformed by the COVID-19 pandemic, B Lab Head of Standards & Insights Dan Osusky wrote in Fast Company: 

“[The SDGs] represent an unprecedented opportunity for businesses to unleash all types of capital—financial and beyond—to build a successful future for their business and the world. Particularly in light of the challenges that our health, well-being, and economy currently face, all businesses, and all those who scrutinize them, should remember that even any approximation of achieving the SDGs requires more from all of us. That means talk of contributions to the SDGs shouldn’t just focus on what a company is already doing — but also on what else, or how much more, could be done. It’s time not just to look at velocity, but also acceleration.”

Last fall, a year after the launch, B Lab reassessed the state of business engagement on the SDGs in our SDG Insights Report, which drew on data engaged by the 20,000 users of the SDG Insights Manager during the first 17 months following its launch. The report detailed how companies have been engaging with the SDGs in practice — in general, finding that despite declarations of progress, there has been far from enough acceleration on bold and strategic business action towards achieving the Goals by 2030. 

What is holding business back? The report found companies were too focused on easy, less impactful changes over transforming business practices in a way that truly addresses the SDGs. Looking at the data from the SDG Action Manager, companies performed significantly higher on SDG-targeted actions in their internal operations — such as having gender equitable hiring practices or monitoring their own carbon emissions or water usage. On average, companies earned 41% of the points possible for SDG-targeted internal practices. Yet companies earned fewer points for actions that extend positive SDG impact beyond what happens inside their own doors. On average, companies earned 32% of possible points for SDG impact in their business model, 30% in their supply chains, and 29% in their collective action efforts. Similar trends exist when looking at the types of goals companies are setting in the SDG Action Manager: significantly more were making commitments to evolve their internal operations than were working to drive collective action on the SDGs.

Our Insights Team ran the numbers again this year, looking for a sign that things were changing. However, the trends still stand: companies overall are performing better in internal operations than any other category, and worst in collective action. As we gain more and more data on goal completion, we have also been able to find that while 10% of Internal Operations goals have been marked as complete by users of the SDG Action Manager, the rate of goal completion for Collective Action questions and Business Model questions are 1% and 5% respectively.

Why is it so critical for business to take action beyond internal practices? In the two years since the SDG Action Manager was launched, progress on key SDGs has been significantly impeded. As stated in the UN’s 2022 Sustainable Development Goals Report, COVID-19, climate change, and conflict all contribute to the “cascading and intersecting crises” that are exacerbating global poverty; food insecurity; and inequity of economic, global health, energy, and educational resources. Collectively, we only have 8 years remaining to achieve the SDGs and address these complex challenges. To support this effort, business needs to build strategies for driving outcomes outside an internal scope. What can companies do to ensure they have the resilience to keep up with the 2030 Agenda? 

New B Lab and IDRC-backed research led by Ralph Hamann, Professor at the University of Cape Town, along with a team of researchers from Lagos Business School, the University of Mauritius, Nottingham University, and the University of Edinburgh, examines why some companies strengthen their sustainability efforts in times of crisis and others restrict them. 

In their paper, titled “Strengthening or restricting? Explaining the COVID-19 pandemic’s configurational effects on companies’ sustainability strategies and practices,” the team presents findings from interviews with 25 businesses in four African countries. They show how prior sustainability investments allow companies to “build on strengths” when responding to a crisis such as the global pandemic, and that this creates benefits both for the companies and for their stakeholders — at a time when they need it most. 

On the contrary, this research finds that companies with weak pre-crisis sustainability commitments are prone to restrict sustainability efforts even further in a crisis, as managers become distracted by immediate financial concerns and lack the wherewithal and relationships to respond to societal needs or longer-term business priorities. 

As the economy and the world at large continue to weather intersecting social and environmental crises, from the pandemic to climate change, learning how companies react is essential. Research like Hamann’s shows how difficult it can be for a business to focus on sustainability, and how factors like company strengths, resource constraints, or governmental dynamics can interact to impact responses. So, how can business leaders position themselves to strengthen sustainability efforts?

While Hamann and team encourage more researchers to take this question up, ramping up sustainability or SDG-focused investments when you aren’t in crisis mode can help. “Our research shows that if a company makes judicious sustainability investments before a crisis, it creates important strengths — including well-embedded sustainability managers and helpful relationships with key stakeholders,” Hamann said in an email to B Lab. That way, when a crisis does arise, it actually becomes “an opportunity for further sustainability strengthening.”

If your business isn’t in crisis mode, now is the time to think about your sustainability and/or SDG focused investments, find your strengths, and see how you can have a higher impact on achieving the Global Goals. It shouldn’t be so hard to measure your SDG progress, see what you're doing on the SDGs, and set goals for improvement. All it takes is signing up for the SDG Action Manager, answering some questions, and learning where your business already aligns with the SDGs — and where you can be doing more. 

1. What practices does your company have in place to promote ethical decision-making and prevent corruption? [Found in: Governance; SDG 16 - Peace, Justice and Strong Institutions]

• A written Code of Ethics

• A written whistleblower policy

• We have conducted an ethics-focused risk assessment in the last two years

• We have created internal financial controls

• None of the above

• Other

2. Has your company adopted any of the following techniques for minimizing the transportation-related environmental impact of its distribution and supply chain? [Found in: Environment; SDG 11 - Sustainable Cities and Communities; SDG 13 - Climate Action]

• Train drivers and handlers in fuel efficient techniques

• Utilize clean or low-emission vehicles (e.g. hybrid, LPG, electric) to transport and distribute product

• Utilize freight or shipping methods with lower environmental impacts (e.g. avoiding air shipment)

• Utilize strategic planning software to minimize fuel usage and shipping footprint

• None of the above

• Other 

3. Does your company have any of the following policies or programs in place to promote diversity within your supply chain? [Found in: Community; SDG 1 - No Poverty; SDG 9 - Industry, Innovation and Infrastructure; SDG 10 - Reduced Inequalities]

• We have a formal program to purchase and provide support to suppliers with diverse ownership

• We have a policy to give preferences to suppliers with ownership from underrepresented populations

• We have formal targets to make a specific percentage of purchases from suppliers with diverse ownership

• We track diversity of ownership among our suppliers

• N/A - Collecting supplier data or having preferential treatment policies is illegal in my country of operations

• None of the above