Are Big Companies Walking Their Talk on the SDGs? New report digs into the evidence

September 24, 2018

     By Duncan Green     

Following my recent semi-conversion to SDG agnosticism, Namit Agrawal, Uwe Gneiting and Ruth Mhlanga introduce a new Oxfam report on business and the SDGs

Business has become a fixture in discussions around the Sustainable Development Goals (SDGs).  This week in New York we will see the familiar picture of executives of the world’s largest corporations convening around the UN’s General Assembly week for a series of high-profile events and conferences to discuss their contributions to the SDGs. If the past couple of years are any indication, we already know what we can expect – a presentation of accomplishments and high-flying rhetoric on business’s willingness and ability to help tackle the world’s most urgent challenges. But is it true?

This year’s discussions will be accompanied by more somber undertones around the limited SDG progress to date (see here and here). Even voices close to the business community have called for a reality check on whether business engagement in the SDGs to date is sufficient. Three years into the SDGs, reliable information regarding companies’ uptake of and contributions to the SDGs remains patchy.

Also, business’ engagement in the SDGs can be difficult to untangle since there are no clear SDG expectations on business (making existing efforts difficult to evaluate) and many companies are already tackling issues relevant to the SDGs through their sustainability strategies (without labeling them as such).

Analyzing companies’ SDG engagement

So we took a look at public information on the SDG engagements of 76 of the world’s largest companies across six general themes: 1) their commitment, 2) how they prioritize areas of SDG engagement, 3) their level of integration of the SDG into business strategies, 4) the level of ambitions of SDG actions and targets, 5) the degree of linkage between a company’s SDG engagements and its commitment to respect human rights and gender equality, and 6) the level of transparency and quality of SDG reporting practices.

Percentage of companies with an SDG commitment
Figure 1

Overall, the report’s findings are sobering in terms of companies (not) translating their commitment to supporting the SDGs into meaningful changes and new ambitions. Beyond this headline finding, here are four takeaways that may (or may not) surprise you:

  • Uptake: most of the companies in our sample are (around two thirds) have made a public commitment to supporting the SDGs. Interestingly, some of the companies not embracing the SDGs are considered sustainability frontrunners in their sectors, highlighting how embracing the SDGs potentially can be more attractive option for sustainability laggards than leaders due to the ease by which companies can put any sustainability efforts under the reputational mantle of the SDGs. (Figure 1)
  • Prioritization: SDG priorities of companies mirror their existing sustainability priorities instead of shaping them. Companies’ recent uptick in support for climate action is reflected in our findings as well as their growing support of gender equality. Issues at the margins of the corporate sustainability agenda, such as business’ influence on inequality or political institutions, are sidelined. (Figure 3)
Which SDGs are priorisitsed by companies?
Figure 3
  • Ambition: Most of the contributions companies list in support of the SDGs pre-date the adoption of the Global Goals. Only half of the companies committing to the SDGs appear to be doing anything new (often discrete sustainability projects or new memberships) and only two companies in our sample adopted new targets in line with the 2030 timeline of the SDGs. Instead of sparking more ambitious efforts, the SDGs appear to have so far largely remained a communications tool. (Figure 5)
  • Human rights: Despite the strong link between human rights and sustainable development, few companies are marrying their human rights commitment with their contribution to the SDGs. Only five companies in our sample display a strong emphasis on human rights in their support of the SDGs (although the vast majority of companies has a human rights policy). This finding confirms the potential risk of SDGs evolving into a diverging direction from the Business and Human Rights agenda. (Figure 6)
  • Companies with an SDG commitment versus companies who have taken action
    Figure 5

    The way forward

    The SDGs have proved a difficult framework for business to grapple with. As they are vague, failing to set out clear expectations for business, companies looking for aspirations around the SDGs are trapped between the SDG targets (which are aimed at governments) and existing sustainability standards (many of them setting a very low bar).

    To help move the discussion forward, we then went beyond our sample to identify promising practices as a guide for more meaningful SDG engagement by business. These examples range from initiatives that address core business practices relevant to the SDGs, such as the Living Wage Foundation or the Fair Tax Mark, initiatives that make human rights-focused contributions to the SDGs, such as the ACT initiative, and efforts to create universal expectations on business around particular SDGs and sectors, such as the World Benchmarking Alliance, which is launching this week.

    Companies signing with a human rights policy versus an explicit link with SDGs
    Figure 6

    The SDGs prompted hope that their ambition and collective vision would mobilize business to a new degree and provide further momentum to efforts to more fundamentally align business models and strategies with sustainable development. The evidence to date doesn’t seem to validate this hope. Instead, our findings appear to confirm a broader trajectory of the corporate sustainability agenda, which over the years has become increasingly company-driven (vs. stakeholder-driven) and focused on a narrow ‘business case’ as primary motivator for companies to engage in sustainability issues. This approach is likely to disappoint our collective expectations of business’ contribution to achieving the SDGs.