In 2016 we anticipated that global companies will be exposed to greater public scrutiny due to the Sustainable Development Goals (SDGs). We predict that global companies, many of which have mastered management targets such as carbon or water efficiency, will be mostly pressured by social factors, rising inequality and the quality of access to resources and services. These will require a more nuanced political engagement from business on societal interests.
Our advisory work with companies to develop a strategic approach to the SDGs, has set a rigorous standard by going beyond the headlines of the 17 goals and analysing what each of the 169 SDG targets mean for business risks and blind spots, but also opportunities for innovation. Throughout 2016 we advanced the global business engagement of 75 of the world’s largest multinationals in resource-intensive sectors with an agenda we called “business diplomacy for sustainable development”. We used our data-driven research to show the top 5 societal demands that will figure most prominently for these companies in 2017 in the main developing countries in which they operate, and what they should do to address them.
Three of our recent media articles have provided key insights on how we see this agenda evolving in 2017:
- In GreenBiz: We described why the SDGs should be seen as the new political framework for business. Companies should not just re-cast their existing CSR programmes through the lens of the 17 goals, but rather understand how these political aspirations, endorsed by governments, will fundamentally shape the risks and opportunities for their businesses. Most global sectors now have some form of pre-competitive corporate platform that brings companies together on common concerns. In September, we contributed to the launch of the Global Agri-business Alliance (GAA) in Singapore, an industry where pre-competitive cooperation has lagged behind. The GAA has made the SDGs a centrepiece of its global strategy.
- In Huffington Post: We outlined why growing social inequality poses a major challenge to business plans on sustainability. Over the past decade, companies have rightly focused on mastering sustainability management targets. These they can control, such as improving the efficiency of their water use and reduce their waste and emissions. However, it is social and political pressures that will most threaten their license to operate: unequal access to water and land, food insecurity, and youth unemployment surrounding them in the developing countries in which they operate. The SDGs provide a useful framework to anticipate intensifying social challenges to business.
- In The Guardian: We focused on how materiality is changing for global business, and the greater complexity of pressures means that new material issues are rising to the top of their agenda. For example, environmental pollution, not previously considered a top material issue for global pharmaceuticals, is coming into the spotlight in a big way. Global investors are increasingly worried that pharmaceutical companies and their portfolios may be creating unprecedented levels of pollution in countries like India and China where most antibiotics are produced, which is compromising local drinking water and the health of local communities. As the world goes on a global quest to combat antimicrobial resistance, our analysis shows that public scrutiny on industry pollution will grow significantly in 2017. Similar challenges affect companies in other industries whose global supply chains reach far and deep into developing countries.